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How to Take Credit Card Payments by Phone

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It's such a common practice that we scarcely think about the mechanics of the process or the complexity of the regulations that govern it.

The Rise of the Credit Card

Introduced to the UK in 1966 by Barclays, credit cards were originally only used in person. The customer would present their card in a shop, restaurant, or another establishment, sign the sales slip (usually in duplicate thanks to a carbon-copy machine) and the seller would check the signature against the one that appeared on the card itself. That's what passed for security in the early days, but by and large, it worked.

However, as the use of credit cards grew rapidly in popularity, retailers saw the profit potential of remote sales from catalogs and travel brochures. Initially, this was managed by manually entering your card details onto a form you'd cut out of the magazine or catalog and post off to the seller, but this ponderous and highly insecure method was soon replaced by a facility to give your card number over the phone, in what is known as a 'card not present transaction' (CNP). This all seemed wonderfully modern and easy. What could go wrong?

You've probably already answered that question. The fact is that, as quaint as the old practice of payment in person may have been, it was far less susceptible to fraud than CNP transactions, largely because of the requirement of a signature given in real-time. With CNP transactions, stolen cards can be used far more easily because thieves simply need the number and expiry date. Merchants began to ask for the card billing address too, which was harder - although not impossible - for thieves to get hold of.

Fraud and Cyber-Security

Much-publicized stories of credit card fraud have made many consumers wary of giving their details over the phone. Payment handlers are given strict instructions never to read the card number back for verification so that they cannot be overheard. For the same reason, if the handlers' calls are being recorded for training or customer service purposes, they are obliged to mute the recording while the caller gives the card details. Nevertheless, a level of distrust persists which a great deal of national and international regulation is trying to allay, with some success.

Ultimately the advantages and convenience for both parties in being able to transact by credit card over the phone are enormous. If you're in conversation with a customer, it makes practical sense for the payment itself to be part of that conversation, rather than sending them away to make payment online. In fact, many people - particularly from the older generation - feel much more comfortable dealing with a human being than entering sensitive financial information on a website. Everyone has heard about the security breaches at British Airways, EasyJet, Uber, and even the NHS.

Even the payment of business-to-business invoices is moving in this direction. Studies suggest that if an invoice offers a credit card payment option it will be paid twice as quickly as one which simply asks for a cheque or BACS payment.

Different card companies charge merchants different commissions, which is something to factor into your budgeting. There are also compliance issues of course - as soon as you record a customer's data, even on a notepad, you assume the legal responsibility to protect it.

Simple and Secure

With Paytia's Secure Virtual Terminal, processing credit card payments over the phone is a simple operation and often attracts the lowest commission. Whatever card the customer wishes to use, Paytia can recognize and accept it. For the customer's peace of mind, they can be transferred to the automated payment service which lets them enter their details using their phone's keypad so that no other individual has to be involved. As for data protection compliance, Paytia meets all the requirements and enables you to store records legally and securely. Paytia is compliant with PCI-DSS and GDPR regulations.