How to take card payments over the phone: a step-by-step guide

Taking card payments over the phone is a straightforward process that allows businesses to securely process transactions without the need for physical card readers – and involves capturing payment information verbally, then processing it through a payment gateway, paying a card processing fee along the way.

And if you’re not already using this method for your small business, it’s easy to start, using a virtual terminal and your preferred credit card machine or reader. In this article we’re going to take you through the process of how it all actually works, including how to set it all up for yourself.

Just want a quick understanding of how much it could cost you to take payments over the phone? We’ve got your back on that, too – simply fill out the quick form below and you can compare quotes from virtual terminal providers in moments. It’s worth getting right, as the varying setup and transaction fees can make a big difference on your bottom line:

The process of taking a payment over the phone is relatively simple, provided you have all the constituent parts up and running.

These include getting a payment gateway or merchant service set up so you can accept the customer’s funds before they’re deposited into your business accounts. Here’s a simple overview of the process:

The process of taking card payments over the phone

With key brands such as WorldPay, Square and SumUp offering terrific features and competitive fee structures, we’re here for you with this guide to help you choose the best value provider. We’ve gathered some top choices for your small business to get started below:

What is a virtual terminal?

A virtual terminal is a web-based portal that enables your business to accept card payments remotely. It’s a quick, handy alternative to a physical card machine – and you don’t even need a business website to use it.

A virtual terminal is essentially a secure webpage into which you enter your customer’s card details. There’s nothing to download or install, and nothing complicated about the process. All you’ll need is a phone, an internet connection, and a merchant account to accept the funds.

This may seem like it will be a lot to set up and a lot of new terms to learn, but we promise it’ll all be easy and smooth sailing once you know how and will be simpler than you think.

According to Statista, 11.8 million people were mobile payment users in 2023 – and in fact, mobile overtook cash as the most popular way to pay in the UK for the first time ever.

We’d say ensuring your business gets a slice of that pie is worth it.

How do you get a virtual terminal?

Step one: get yourself a merchant account if you don’t already have one.

A merchant account is mandatory for any and all businesses accepting card payments. It’s not the same as a business bank account; it’s more like a kind of virtual holding pen, where funds go to be authorised and cleared before they are accessible.

You can get a merchant account through a traditional merchant services provider, such as Clover, takepayments or Worldpay, or directly through an acquiring bank (we recommend Barclaycard). Payment facilitators such as Square and SumUp offer cheaper, simpler alternatives for lower-volume businesses.

Virtual terminals are either included as standard within the cost of your merchant account, or offered as an optional add-on service. Sometimes, they’re bundled together with other ecommerce services, such as one of the best payment gateways available currently, or ‘pay by link’ tool.

How to take card payments over the phone

Taking a card payment over the phone is actually pretty simple. Here’s a step-by-step guide to a typical transaction:

1. Open the virtual terminal interface from your web browser, and log in.
2. Enter the price of the sale, and hit ‘manual card entry’ (or your terminal’s variation of this).
3. Have the customer read out their card details, and enter them straight into the portal (this is important – see our FAQ about PCI compliance below for more information).
4. Key in the address associated with the card (this is also crucial, as virtual terminals use AVS (Address Verification Service) to verify transactions).
5. Hit ‘confirm’, and hey, presto! You’ve just made some money.

How much does it cost to take phone payments?

Virtual terminal fee structures and exact pricing varies across different suppliers. Some merchant services providers offer their virtual terminal service at no monthly cost, with just a flat percentage-based fee applied to each transaction you accept through it. This pricing style is more common with payment facilitators such as SumUp and Square.

Other suppliers – typically traditional merchant account providers – charge a monthly fee, with transaction fees on top of that: Worldpay service, for instance.

Sometimes, that monthly charge includes a set amount of ‘free’ transactions, or operate a noticeably different ‘sliding’ pricing scale based on your business’ overall sales volume.

With many options to choose from, it’s a good idea to figure out what would be best for your business based on your overall needs. Using our 🔍simple cost comparison tool, all you need to do is simply select the features you need to get your quotes.

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BEST OVERALL
Worldpay	PayPal	Stripe	Amazon Pay	Shopify Payments	Opayo	Cardstream
Cheapest paid-for plan: £19.95 per month 1.5% transaction fee for Mastercard and Visa Card transactions	Cheapest paid-for plan: 2.9%+ £0.30 per transaction (no monthly fee)	Cheapest paid-for plan: 1.5% + 20p (no monthly fee)	Cheapest paid-for plan: 2.7% + £0.30 (no monthly fee)	Cheapest paid-for plan: £19 per month	Cheapest paid-for plan: £27 per month for 350 transactions	Cheapest paid-for plan: £18 per month for 350 transactions
Best for: Businesses selling personalised goods	Best for: Businesses selling internationally	Best for: Online clothing stores	Best for: Businesses younger than one year	Best for: Shopify stores	Best for: Creative sectors	Best for: Service industries

Want to find the best provider for your business? Compare

What are the best virtual terminals in the UK?

We found that the best virtual terminals in the UK come from Square, Handepay, and SumUp.

Square: best for low volume, low value transactions

4.3 out of 5

• Price
  3.3
• Features
  4.6
• Customer Support
  5
• Customer Score
  4

Startups recommends Square for merchants accepting low volume, low value transactions because of its flat rate pricing structure and lack of monthly fees.

For a slick, savvy virtual terminal solution that’s as easy on the eye as it is on the wallet, look no further than Square. It’s simple to set up, and even more simple to use – making it ideal for businesses new to accepting payments over the phone.

With a transaction fee of just 2.5% and no monthly, setup, or PCI compliance fees, Square is also one of the cheapest options around. But that doesn’t mean you’ll have to sacrifice features – Square’s reporting capabilities are excellent, and the ability to save card details helps streamline the process of charging returning customers.

Handepay: best for small UK businesses

4.8 out of 5

• Price
  4.2
• Taking Payments
  5
• Features
  5
• Customer Support
  3.8
• Customer Score
  4.4

Handepay’s virtual terminal also comes with an online dashboard, allowing you to track your sales and manage your business in real time. Oh, and you’ll get Handepay’s ‘Pay by Link’ feature – plus the ability to send e-invoices to your customers – included as standard. Handy, indeed!

takepayments: best for tailored costs

4.8 out of 5

• Price
  4.2
• Taking Payments
  5
• Features
  5
• Customer Support
  3.8
• Customer Score
  4.4

takepayments’ virtual terminal is a versatile and user-friendly payment solution designed to streamline transactions for businesses of all sizes. With its intuitive interface and secure processing capabilities, it is one of the best merchant services around, allowing merchants to accept payments from customers conveniently whether in-store, over the phone, or online.

What sets takepayments apart is its ability to customise costs according to specific industry needs. For example, a boutique online fashion retailer can easily offer a personalised shopping experience and ensure secure payment processing with takepayments’ reliable services. Similarly, in the hospitality sector, hotels and restaurants can benefit from takepayments by allowing guests to settle bills and make reservations effortlessly via phone, enhancing customer satisfaction.

Overall, takepayments’ virtual terminal is a reliable tool that simplifies payment processing and enhances the customer experience.

Worldpay: best for set monthly fees and regular payouts

4.7 out of 5

• Pricing
  3.7
• Features
  4.5
• Customer Support
  5
• Customer Score
  3.8

Worldpay virtual terminal is a versatile payment solution that enables businesses to accept payments easily and securely, and excels in facilitating regular payouts.

Consider a subscription-based streaming service that pays royalties to content creators each month. Worldpay’s automated recurring payment system allows the streaming service to easily process these payments without manual intervention. The service can set up specific schedules for payouts, ensuring that content creators receive their earnings promptly and consistently.

This reliability not only fosters good relationships with content providers but also streamlines financial operations for the business.

In summary, Worldpay’s capabilities in phone payments and regular payouts make it a robust choice for businesses seeking secure, efficient, and convenient solutions. Its virtual terminal empowers businesses to expand their payment options and streamline their operations for improved customer satisfaction and increased sales.

SumUp: best for micro-merchants

4.1 out of 5

• Price
  3.7
• Features
  3.9
• Customer Support
  3.2
• Customer Score
  4.7

Startups recommends SumUp for micro-merchants because of its low, fixed fees, simplicity, PCI compliance, and the wide range of card types it can accept.

Whether you’re a market stall operator, a taxi driver taking payments from the back of your cab, or simply a merchant in need of a straightforward way of getting paid on the go, SumUp is a tried and tested solution. And as it happens, its virtual terminal is excellent, too.

At 2.95% + 25p, it’s still a little pricier than Square. But your PCI compliance is handled for you, and there are no setup or recurring fees, which still makes SumUp decent value for money in the long run.