How to Accept Payments Over the Phone

How to Accept Credit Cards Over the Phone

Sometimes when selling your crafts or artwork online you are in a situation where it would nice and very convenient to just punch in the credit card number that your customer is telling you over the phone. How can you do that?

When would you need to take a payment over the phone? – There are actually some cases where it is nice to have the option, especially if you put a phone number on your website.

One case is where you are already on the phone with the customer and have all the details ironed out. They often ask, can I give you my credit card number so you can get started? Rather than saying, I’m ready, the usual response is: let me do a Paypal invoice and email it to you in a few minutes. Please let me know if it comes through.

Another case is when checkout does not go correctly for some reason. People like to pay how they are comfortable doing so. If they cannot open your invoice email, view the button to pay on your site, or get their payment to go through on your checkout form, they can get frustrated.

In these cases it is nice to have them on the phone and handle it right there, or at least jot down their info and enter it in when the smartphone is free.

How can you accept payments over the phone? – Right now the cheapest and best way for average person selling their crafts online is to use the Square Card Reader. You can do it other ways with merchant accounts but they usually entail a monthly fee which can be very hard to justify unless you do a huge number of transactions. If you just want to have the option of taking payments over the phone, it is very hard to beat Square.

Pay attention to fees – Swiping fees are higher than entering in card numbers manually. With Square it is the difference between 2.75% and 3.5% + .15.

Marketplace Considerations – How did your customer find you? You may have a personal website, Facebook Page, or could be running ads in addition to selling on a venue like Etsy. If you are on the phone with a customer and they are ready to give you their credit card information you should definitely ask. If you are selling on a marketplace and that is where your customer found your handmade items, you will probably be required to use their online processing.  You do not want to go against their terms of service by taking outside payments and avoiding their selling fees.  

Marketplace protection – Sometimes you will have other sites where you just display your crafts, like a blog or Facebook Page, but do all the actual transactions through a marketplace. If this is the case it can be a good idea to talk the customer into paying through the marketplace checkout, even if they originally found you through Facebook. If you did have an issue and the marketplace and their payment processor offered seller protection, then you are covered as well as you can be.

Personal Experience – The only time I ever had an issue, knock on wood, was as a buyer on Ebay. I used Paypal because they require it so I was protected through them as well as through Ebay. Since Ebay could see all the communications between myself an the buyer they ultimately decided in my favor, awarding my money back on an item that was never actually in the sellers possession come to find out. Up until that point I had never thought that there was much value in buyer and seller protection policies, but there actually is if you are on a good venue.

Selling through your personal website – For the most part if you own your own website and do your transactions there, you will be using Paypal in some form to handle the payments. To have the option of taking payments over the phone you will also probably have a Square Reader. So the question would be, are you safer with Paypal protection or through Square?

Paypal vs Square Seller Protection – The issue is more with the credit card that the customer is using rather than how you are taking the payment. When you accept credit cards in general, you are dealing with customers that have a lot of protection through their cards. Usually their card sides with the buyer unless really proven otherwise.

Here is how Paypal handles chargebacks: Paypal Chargeback Resolution

Here is how Square handles chargebacks: Square Chargeback Resolution

As to which company handles issues better, it is always going to depend on who you ask. Every situation is different and usually the most disgruntled customers are the ones complaining online.

Personal Opinion: My philosophy has been to use the most popular and largest payment processors. The theory being that they have the most experience and have the most things figured out. Both Paypal and Square are leaders in their particular area.

Usually you only really find out how good a company is when you have issues, and fortunately things usually go smoothly. I can say that when I have needed to contact Paypal, not only did they pick up the phone quickly, but they took care of me really well. So far I have not needed to contact Square, but their reader does work really well.




P.S. – I am not getting paid in any way for recommending these services.

What has been your experience using the Square Card Reader?

Richard Walker



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