How to Take Credit Card Payments on Your Phone (and Over the Phone)

Today's smartphones are much more than just communication tools—they’re powerful enough to run your business from the palm of your hand. That’s great news for retailers who want to process credit card payments using their smartphone without investing in expensive hardware. 

But there are special considerations to keep in mind if you want to accept mobile credit card payments, whether in-person or over the phone. Your card reader needs to be compliant, and the data you're transferring must be encrypted to protect sensitive payment information. 

Whether you’re selling at a permanent store or attending local craft fairs on the weekend, this guide walks you through accepting credit card payments on a smartphone, with or without a physical card reader.

Can you accept credit card payments on a phone?

Any business owner can accept credit card payments from their smartphone if they have a card reader and a payment-processing provider. Shopify merchants, in particular, can ring up orders on the Shopify POS mobile app and sync their card reader to process mobile payments from their devices. Any revenue you earn goes towards your Shopify payout. 

Tools to accept card payments from your smartphone

Mobile POS systems

A mobile point-of-sale (mPOS) system lets retailers process payments using a smartphone or tablet. Some systems require you to use their own devices, while others use software that you can download to your smartphone or tablet. They replace a traditional cash register or fixed countertop terminal, giving you the flexibility to take payments anywhere. 

An complete mPOS system typically includes a portable device, the vendor’s POS software, and a mobile card reader. 

Tap-to-pay technology, however, skips the card reader entirely, turning your smartphone into a credit card reader that can accept payments directly. This technology, coupled with the Shopify POS app, allows you to run your entire retail business right from your smartphone—no extra hardware required.

“Tap to Pay on iPhone enables everyone on our team of five to walk around and accept payments on the spot,” says Mike Esiobu, marketing manager at Unfinished Legacy. “Payment is the last touchpoint we have with customers, and we wanted their experience at our popups to end on a positive note.”

Virtual terminals

A virtual terminal is a web application or other software that allows you to process payments online (including on a phone) when a customer’s card isn’t physically present. Using this method, you log into the application to securely enter the customer’s information and process a card-not-present (CNP) transaction.

Payment links

A payment link is a secure URL you create to request payment. When clicked, the link takes the customer to a simple, hosted checkout page where they can input payment information and complete the transaction To reduce the potential for fraud, these links generally expire within a given window of time, and can only be used once. 

How to choose the right mobile payment method

Each mobile payment method has its pros and cons. Here’s how to decide which is best for your retail business:

• Transaction fees and pricing models: Payment processing fees shouldn’t take a huge chunk out of your profits. Before choosing a mobile payment method, evaluate each option’s costs carefully. In-person transactions tend to cost less, while CNP transactions usually cost more because of higher fraud risks. 
• Security: If you prefer to avoid handling sensitive payment details yourself, consider using payment links or mobile point-of-sale systems with native payment-processing capabilities. 
• Integrations: Select a mobile payment method that integrates seamlessly with your existing retail toolset. Shopify POS, for example, offers a secure payment gateway that supports CNP transactions. This technology also powers secure contactless payments through Tap to Pay or integrated mobile card readers.

Keep in mind, your choice doesn’t have to be one or the other. You can mix methods depending on your needs. For example, you might use Tap to Pay for popup shops and payment links for customers who want to place large orders using your phone.

How to take credit card payments on your phone in person

If you’re processing payments in person, here’s how to accept credit card payments right from your smartphone. 

1. Find a compatible credit card processor and mobile POS app

Start by selecting a credit card processor compatible with your POS software. Some ecommerce platforms have payment processing built in. Shopify Payments, for example, can easily process transactions from most credit card issuers, including American Express, Visa, and Mastercard. 

Pay attention to mobile payment processing fees when evaluating your options. Most processors charge different rates depending on the credit card a customer uses, so check your order history to identify your customers’ preferred cards. Look for a processor with low fees for these transactions.

“The ideal experience is one that saves guests time,” says Tiffany Spiteri, regional manager at Kit and Ace. “Shopify’s fully integrated POS software and hardware help our staff serve guests more efficiently thanks to visibility into inventory levels, flexible fulfillment options, and its built-in card reader. With Shopify powering our website and stores, we have a true omnichannel model.”

2. Choose a mobile credit card reader

Some smartphones already include secure technology for accepting contactless payments. 

Shopify POS offers built-in contactless payment technology, Tap to Pay, which converts compatible iPhones into card readers, eliminating the need for extra equipment to process payments. 

If your device or payment app doesn’t support this functionality, or if you prefer accepting a broader range of credit card payments (such as chip and PIN), select a card reader that integrates directly into your smartphone. Customers can then tap, swipe, or insert their card into a physical reader when paying in person. 

Verify that your card reader is PCI compliant and meets EMV standards for chip cards. Compliance ensures data encryption, protecting both your customers’ sensitive information and your revenue. 

3. Set up and sync your ecommerce software

Before choosing a particular card reader, make sure it integrates with your point of sale software. 

Shopify POS, for example, offers easy-to-use dedicated hardware designed specifically to help you process in-person payments through your smartphone. The app is compatible with Android and iOS devices, and syncs the following data directly with your Shopify admin to process orders more efficiently:

• Product prices and taxes 
• Inventory levels
• Discounts or bundles 

Having all of that data right in your hand where you can find it saves time, and offers a more convenient checkout experience for you and your customers.

4. Process the mobile payment securely

Before you invite customers to pay on your smartphone:

• Conduct a trial run to confirm the mobile system is functioning properly.
• Use your mobile app to process a mock order (you can create a discount code so the demo transaction totals only one cent). Then, use your credit card to pay.
• Wait for the transaction to be approved.

5. Send a receipt

Receipts come in handy when a customer needs to request a return or exchange. They’re documented evidence of what was purchased, when the payment occurred, and how much was paid. 

Once you’ve accepted a credit card payment on your smartphone, either:

• Email or text a digital receipt using the Shopify POS app
• Connect a receipt printer to generate a physical copy 

How to take credit card payments over the phone (card-not-present)

You can accept payments over the phone if a customer can’t use their card in person. Here’s how to do it securely. 

1. Understand CNP risks and the resulting higher fees

Card-not-present (CNP) transactions happen when the cardholder and card are not physically present. The retailer must rely on the card data entered manually by either themselves or the customer. 

This poses multiple risks that card-present transactions don't have: 

• Higher fraud potential: It’s easier for fraudsters to use stolen card information over the phone because there's no physical card verification (chip, tap, or PIN). Mitigate this by asking for the customer’s billing address when processing the payment—it should match the address registered to the cardholder. 
• Chargebacks: With CNP transactions, the burden of proof lies with the retailer to demonstrate that the transaction was legitimate. If a cardholder claims fraud and you can’t prove the transaction was genuine, you may lose the sale and incur chargeback fees. Maintain accurate records, such as invoices and delivery tracking, to support dispute resolution.
• Lack of customer authentication. In person, card-present transactions typically involve EMV chips or contactless taps, offering more secure authentication. CNP lacks these protections unless the system includes 3D Secure or additional verification steps. 

Most payment processors charge more for CNP transactions because they’re taking on more risk to accept the payment. Be sure to factor these increased fees into your pricing strategy before accepting phone payments. 

2. Choose a secure payment gateway or virtual terminal 

A payment gateway is a secure service for accepting payments from customers. If the technology is PCI DSS compliant, it encrypts credit card data, allowing you to debit a customer's bank account and transfer the funds to your account securely.

Popular payment gateways that support manual entry of card information include:

• Shopify Payments
• Stripe 
• WorldPay 
• Authorize.net
• PayPal 

Some payment gateways require a virtual terminal to process payments, while others let you manually enter a customer's card details directly in your online account. 

3. Integrate CNP payments with your ecommerce platform

By processing payments through your ecommerce platform, you can take advantage of built-in, advanced security measures and safeguard against fraud or data breaches.

Integrations also ensure seamless data flow between your ecommerce platform and the payment gateway. This saves you the trouble of manually reconciling payments, updating inventory, or tracking sales separately when taking payments over the phone. 

💡Tip: Shopify is the only platform that natively unifies POS and ecommerce. You’ll get one centralized business “brain”—an approach proven to reduce total cost of ownership by 22% on average.

4. Securely gather customer credit card details

Once you’ve configured your payment system, you’re ready to accept credit card transactions over the phone. When someone calls to make a purchase, gather their credit card details, including their:

• Credit card number
• Expiration date
• Security code (CVV)
• Billing address 
• Postal code

As a business owner, it’s your responsibility to make sure customer payment information is protected. Avoid repeating sensitive numbers out loud, and never store payment details in unsecured locations. You can also prompt customers to key in the numbers on their keypads, further reducing the risk of eavesdropping or data theft. 

5. Authorize the payment and provide confirmation

Once you’ve entered the payment details, initiate a secure phone payment through your payment gateway. The platform securely transmits your customer’s credit card information to the appropriate card network for authorization. 

You’ll receive confirmation when the transaction is authorized. At this point, the payment is considered successful, and you can send the customer a receipt or confirmation of their purchase.

Benefits of processing mobile payments 

Processing mobile payments offers significant advantages for retail businesses, helping to streamline operations and enhance customer experience.

Use equipment you already own for cost savings

Running a retail business is expensive enough as it is—and cash registers can cost hundreds of dollars each, some as much as $1,000 or more. You can avoid these sizable equipment costs by using the smartphone you already own to accept card payments.

Aside from the obvious advantage of saving money, accepting card payments on your phone with Tap to Pay reduces the pieces of equipment you’ll need to carry. If you sell in-person at craft fairs and popup shops, for example, you won’t need extra hardware to accept payments. Imagine: Your popup is looking like a massive success, and you’ve got customers lining up to pay—and that’s when you realize you left your attachable card reader in the office. Since you use your phone for everything, you’re much less likely to leave it behind. 

Customer convenience and speed

If you’ve got a long queue of customers waiting to make a purchase, the last thing you want is to make them wait. The longer they spend in line, the more opportunity they have to second-guess their purchase.

Processing payments from your mobile phone speeds up checkout because you’re not tied to a stationary POS. Your smartphone is portable—if someone in your store wants to pay quickly or you have an unexpected surge of customers, you can move around freely and help people pay without queuing up.

Accept a wider range of payment methods

Depending on the card reader you’re using, processing payments through your smartphone allows customers greater payment flexibility. 

With Shopify card readers, you can accept the following payment methods on your phone:

• Chip and PIN
• Contactless 
• Mobile wallets, such as Shop Pay, Apple Pay, Samsung Pay, and Google Pay

Strengthen payment security (vs. cash)

Cash can cause headaches for most retail store owners. Not only are you at greater risk of misplacing cash, but there’s always a risk of fraud or theft. Anyone—employees included—can access checkout desks and take cash from transactions.

Credit card payments are more secure because nobody can intercept the payment. Funds transfer directly from your payment processor to your merchant bank account. 

Increased flexibility for diverse business models

Accepting payments with your phone offers greater flexibility for retailers, making it easy to process orders outside of typical in-person or online checkout scenarios—and giving consumers additional opportunities to become loyal customers. 

For example, a home furnishings store might supplement product sales with interior design consultations. The customer can schedule appointments and submit a deposit over the phone, then complete their order as usual in-store. Or if the consultation is taking place in the customer’s home, you can accept payment there with Tap to Pay on your phone.

Plus, if a customer is ready to buy during a call, processing the payment immediately prevents cart abandonment or delays. If you receive a call from a customer inquiring about stock, your staff, for example, can quickly check inventory, confirm availability, and take payment to reserve the item.

💡Tip: Because Shopify unifies inventory data across all sales channels in real time, you can offer the omnichannel experiences that modern customers expect. Allow customers to reserve, buy, collect, return, and exchange products wherever they are, without the complex middleware that usually inflates platform costs and causes operational drag. 

Essential security measures for mobile payments

Accepting card payments over the phone or in person through your mobile device involves its own set of risks. Here’s how to protect your customers’ data and keep payment information safe. 

PCI DSS compliance for mobile payments

PCI DSS compliance refers to a set of security standards designed to ensure any business handling credit or debit card data does so securely—the Payment Card Industry Data Security Standard. If you accept, transmit, or store cardholder data—even only once—you must comply with PCI DSS.

Compliance is essential for retailers who accept payments via phone—these transactions often involve CNP transactions, which are riskier and subject to stricter scrutiny.

To stay compliant:

• Use a PCI-compliant payment gateway.
• Don't record calls that include card numbers.
• Never record or store card numbers in unsecured places (for example, on paper, in spreadsheets, or in email). To help your customers stay safe, if they offer to send you payment information by text or email, politely decline as well as inform them of the risks.

EMV standards and chip card security

EMV stands for Europay, Mastercard, and Visa—the companies that developed the global standard for smart chip card technology. EMV cards contain microprocessor chips, which securely store and process payment data, making it significantly harder for criminals to steal customers’ payment information via skimming. 

Skimming is when thieves insert a small device into a payment-accepting device like a card swiper, that captures and stores the information. The perpetrators can then use the info to make purchases online or over the phone, or even make a new card, called a clone, which they can use to make purchases anywhere.

An mPOS system like Shopify helps your customers steer clear of this form of fraud by allowing you to accept EMV chip cards securely, either through:

• Contact cards, which the customer “dips” into a mobile card reader 
• Contactless payments, which use near-field communication (NFC) to wirelessly transmit payment details through a contactless card or digital wallet 

Tokenization and encryption for data protection

Encryption protects payment data (like credit card numbers) by scrambling it during transmission, making it unreadable to unauthorized parties. 

Tokenization works similarly—it replaces sensitive card data with a random, unique string of characters. These tokens themselves are worthless if intercepted, which allows you to safely store cards on file. This allows you to securely process future mobile payments without repeatedly asking for card details (with customer consent)—so you can offer security and convenience at the same time. 

Fraud prevention best practices for CNP transactions

Accepting payments over the phone increases your chargeback risk, since fraudsters or problematic customers may report transactions as unauthorized to their banks to try to get a refund.

Alongside the obvious loss of revenue (since purchasers rarely return items for which they issue a chargeback), Mastercard reports that chargeback disputes cost retailers an average of $110 each in fees.

When a customer files a chargeback request, their bank will contact you to provide evidence of transaction authorization. This is why it’s important to keep detailed records, such as:

• Phone call recordings (with customer consent and excluding payment details) 
• Order confirmation emails or SMS
• Shipping and tracking confirmation, or proof of pickup if the customer placed an order for in-store collection

Tip: Chargebacks don’t only happen for CNP transactions. Shopify Protect’s sophisticated fraud detection algorithm flags suspicious online orders before they are fulfilled. Combine this with the free Fraud Control app to fully understand your fraud exposure with detailed analytics, blocked user lists, and automations. 

Employee training and a secure environment

While you have the technological tools to protect your retail business from fraud, some opportunists still slip through the cracks by targeting the people processing mobile payments. 

As part of your retail training program, educate staff on how to safely accept payments over the phone or through their device:

• Emphasize that customer card data should never be written down, saved, or shared.
• Create a specific script for collecting essential information when taking payment over the phone (card number, expiration date, CVV, and billing ZIP code).
• Remind staff never to repeat card numbers aloud.
• Train staff to spot suspicious behavior—for example, rushing through payments, inconsistent information, and mismatched addresses—and explain what to do if they're concerned. 
• If staff are using an mPOS system to process mobile payments in person, remind them to keep their device and software updated. 
• Familiarize your staff with all of the common theft and fraud techniques, so they know what to look out for.

Take card payments from your smartphone with Shopify

If you don't want to carry around POS hardware when selling in person, turning your mobile phone into a credit card reader is a smart way to go. These transactions are more secure than cash, and if you're using a card machine to process payments through your phone, customers can choose their preferred payment method. 

Shopify’s unified commerce platform has everything you need to start selling directly through your smartphone. Accept payments with or without a card reader with Shopify Payments—the native gateway that secures your customers' payment details and gives them flexibility to pay however they prefer. This combination of security and convenience can elevate the customer experience, and help you grow your business.

“Before, we had to fly our IT specialist in from Germany to set up the POS,” says Lennard Plotnicki, retail and commercial manager at Merz b. Schwanen. “With Shopify, we can just bring our hardware, or even just our phone, and start selling.”