Accepting credit cards and debit cards is a prerequisite for businesses in the modern day. So, you must ensure you can process any card payments in any potential scenario. Besides just running transactions at a physical POS, you need to account for situations where a customer wants to pay WITHOUT having the physical card in hand. This usually entails physically inputting the card data either in person or over the phone, referred to as card-not-present payments. Commonly utilized in phone orders employed in restaurants or retailers, it’s an extremely popular method, with the provided convenience meeting the lofty expectations of the modern-day consumer.
If your business competes in any of the following industries, implementing card-not-present payments could be an extremely lucrative opportunity for your operations moving forward…
- Construction/Renovation
- Freelancing
- Consulting
- Restaurant
- Retailers
- Home Maintenance
Guide on Processing Card Not Present Payments
You’ll run into multiple potential scenarios in running potential card-not-present payments, so it’s important to familiarize yourself with the different options…
- Keying in cardholder data physically into the credit card terminal
- Keying in cardholder data utilizing mobile phone credit card processing application
- Keying in cardholder data utilizing a virtual terminal: While this may seem no different than utilizing a mobile phone application, employing the use of a web-based proccing application can help reduce some processing costs in comparison to running transactions in a phone terminal. Exercising the use of Level 2 or Level 3 processing requires the intake of additional transaction information, which in turns lowers your processing rates. This form of deal often comes packaged with an added monthly charge to your account, so you’ll have to determine if it’s an affordable option for your business.
Despite its apparent convivence, card-not-present payments are not very secure, in contrast to running a card-present counterpart. This has defined card-not-present payments as a risky type of transaction for any processor to facilitate. To offset this risk, processors will charge higher processing rates and transaction fees when accepting card-not-present payments.
The Cost
For card present payments, businesses face somewhere around a 2% to 4% charge per transaction. This percentage is likely significantly higher when processing card-not-present transactions. Again, processors offset the risk posed by processing these transactions by putting more money in their pockets.
The Security
Beyond the risk of leaked data, fraudsters utilizing the anonymity of card not present payments to commit identity theft is another risk posed against processors. So, you need to take extra care when verifying these types of transactions. This can be done through…
- Utilizing POS System: Beyond the convenience and security of digital data collection, the capabilities for advanced identity verification make using a POS system a no-brainer when taking payments over the phone.
- Confirming Product Delivery: Ensuring your customer actually received the product is an incredibly efficient method of weeding out any potential fraudsters trying to take advantage of you.
- Providing Fully Detailed Customer Data: While a transaction may initially be able to go through with a limited amount of customer information, providing additional details such as a customer’s billing address, shipping address, and phone number can prevent any potential issues in processing or identity verification down the line.
Why Even Bother?
The added fees and complications in processing card-not-present transactions can intimidate business owners to the point of avoiding the concept altogether. Why not utilize mobile or online payment services like Square or PayPal instead, and simply accept payments exclusively online or in-store? In the end, customers expect to always be catered to in any situation, so it’s all about preparing for any potential scenario. Losing a sale simply because you don’t provide a particular method of payment can be incredibly demoralizing, so unless you know for certain that your business has no need for it, you should always offer it in some way. For example, despite the advent of food delivery apps, certain restaurants will never stop receiving requests to pay over the phone. The same goes for certain retail stores, local businesses, or even the most high-profile companies, customers will always prefer taking their business elsewhere over comprising with you.
If processing card-not-present payments is a must for your business, then you need to verify your intaking these transactions properly. Implement specified data collection procedures detailing the exact info needed for each transaction. In addition to instating a set of fraud prevention measures, that fully lays out how to combat each potential scenario where you may be targeted. As well as investing in state-of-the-art POS tech, that can securely protect your customer’s information. If you ensure you’re protected on all fronts, processing card-not-present transactions in any scenario shouldn’t be a problem.
If you’re sold on the idea but unsure how to get started, contact us at Revitpay. We’re a merchant services provider equipped with the tools and knowledge to manage any problem you may have in processing card-not-present transactions.