Credit Cards by Phone – An Alternative To Dedicated Terminals

The cell phone has become ubiquitous in American society. Everyone has one, and it has surpasses cable TV as a luxury that cannot be lived without. With card-by-phone processing schemes, the cell phone can replace the need for a dedicated card processing terminal. For some merchants, this is a dream come true, but for others, the drawbacks outweigh the benefits. When conducting a review of the various programs out there, a merchant should take both the pros and cons into consideration.

One the most important factor governing whether or not phone transactions is appropriate for your business is the frequency with which you process credit cards. Phone transaction programs are ideal for companies which do not conduct credit card transactions in great volume, as the process of dialing in transactions can be tedious if there is a large volume of credit transactions. If you're paying an employee by the hour, you're paying for the time it takes them to dial in this transaction. If you're doing it yourself, you might simply not have the patience.

Another factor to consider is the increased cost per transaction. Credit and debit card by phone program cost is typically higher than standard methods of processing, as cards are not swiped- leading to riskier transactions and higher rates. The processing company also has to pay for and secure additional layers of transaction gateways and these costs are built into the program rates.

Spotty cell phone coverage can also be an issue, so if your do go with a program like this; make sure you get a cheap backup knucklebuster. This can increase chargeback protection and provide capability of a receipt in addition to covering the coverage area issue.

One of the benefits of credit and debit by phone programs is the small business owner does not need to worry about carrying a special service or the expensive equipment related to standard processing methods. The low cost for entry involved in these systems takes into account the existing cell phone equipment and contract, so the costs are absorbed into an already existing fixed operating budget. The cost of a wireless, next generation terminal can be expensive, so the card by phone programs can lessen this initial hit. When there are multiple agents running transactions, the cost of additional terminals can add up as well, so when evaluating solutions make sure to take this into account.

Card by phone systems are very easy to use. Employee training should not be much of an issue, as the system works with a series of IVR prompts to guide the user through the transaction.

The important thing to keep in mind with this and any other business decision is that there is no all-encompassing right answer. Processing credit and debit cards by cellular phone may allow businesses that otherwise may not be able to accept credit cards to use this technology and grow their business at a previously unachievable rate. On the other hand, it may become tedious during daily use, and the merchant may want to switch to another system once the company expands past the point where it's convenient to use cellular phone processing. Weigh all factors and make the choice that is best for your business.