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Credit Control, Retail

Why you shouldn’t take credit card payments over the phone

Making phone-calls to customers to collect payment is sometimes necessary, but it’s also costly and inefficient, taking up valuable staff time and increasing the risk of chargebacks.

Collecting card payments over the phone is a necessary task for many businesses, large and small. For some it’s an everyday occurrence and part of their normal business process. Indeed, depending on the size of the business, it may be one of the main tasks undertaken by their call-centre. For others it’s a fallback when a debt runs overdue or a direct debit fails. And for millions of small businesses, alongside cash and cheques it’s one of the primary means of collecting payment from their customers.

But here’s 5 reasons why taking card details over the phone should be avoided where possible:


1. PCI Compliance

The Payment Card Industry Data Security Standard (PCI DSS) is the payment industry’s security standards that all companies involved in accepting, transmitting or storing debit and credit card data needs to comply with. Adhering to these standards when taking phone payments is extremely challenging and likely to be impractical for many smaller companies.

2. Chargeback Risk

Most chargebacks are due to fraudulent transactions (i.e stolen cards) and occur through card-not-present environments such as payments taken over the phone. 3-D Secure is the primary way to eliminate chargebacks as it shifts the liability away from the business but implementing 3-D Secure over the phone is not possible because it requires the customer to have an internet connection as part of the identification process.

3. Time to Process Payment

Whether it’s your own time, or your staff’s time, there is most likely something far more productive you could be doing than taking down your customers private credit card details over the phone, one customer at a time – and that’s assuming you can reach the customer in the first place.

4. Inconvenience for Customers

To many of us who have grown up in the age of the Internet the idea of talking to somebody on the phone is a somewhat old-fashioned concept – communication is much more convenient by text and over the web especially if it’s of a transactional nature. Besides which, we expect to be able to transact with companies at a time that suits us and fits with our busy lifestyles – which is not always the time that most suits a company to call us.

5. Cost and Effectiveness

Once you take into account the impact on staff time, the call costs, the risk of chargebacks and the inconvenience to customers, it turns out that collecting payments over the phone is not just costly but inefficient and ultimately, ineffective.