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Is this illegal?

by Kunle Olomofe
11 replies
I wonder if it's illegal to process credit/debit cards for your clients/customers over the phone if they want your product or service but are not internet-savvy/friendly. You call or they call and you take their card details and add the details yourself on your site--I'm talking about doing this without an official "merchant account". Anyone know of any legal restrictions to doing this?

Cheers
#illegal
  • Profile picture of the author KirkMcD
    Read the terms to whatever processor that you are using for whether or not that you are allowed to do this.
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    • Profile picture of the author Kunle Olomofe
      Originally Posted by KirkMcD View Post

      Read the terms to whatever processor that you are using for whether or not that you are allowed to do this.
      No mention of this in the terms. At least not that I can find. Have contacted support. Thanks for the suggestion.
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  • Profile picture of the author DianaHeuser
    Hi Kunle,

    Take a look at this South African site. I am not sure if your bank is listed there but this could possibly help you.

    http://www.payfast.co.za/c/std/supported-banks

    Di
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    • Profile picture of the author Kunle Olomofe
      Originally Posted by DianaHeuser View Post

      Hi Kunle,

      Take a look at this South African site. I am not sure if your bank is listed there but this could possibly help you.

      http://www.payfast.co.za/c/std/supported-banks

      Di
      Hi Di,

      Sorry I didn't make that clear but I meant doing this with online payment processors not local banks. Also since I'm not in SA I don't think that list of banks will help me. I'm in Nigeria.

      By the way will email you re: our ongoing off forum discussion.

      Cheers,

      Kunle
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      • Profile picture of the author Kay King
        I think you could have a big problem. As I understand what you are saying you want to take the customer information by phone and then enter it into a payment account as if the customer is doing it.

        If you want to take payments directly - set up a mechanism to do that.
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  • Profile picture of the author sbucciarel
    Banned
    This was allowed on Merchant Accounts that I have had.
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    • Profile picture of the author Kunle Olomofe
      Originally Posted by sbucciarel View Post

      This was allowed on Merchant Accounts that I have had.
      Yes I know merchant accounts allow this. I'm looking to do this with local clients using 3rd party online payment processors.
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  • Profile picture of the author agc
    The issue is mostly one of chargebacks. Any of your customers can easily challenge / charge back any charges, simply by claiming they have never heard of you.

    How do you protect yourself against charge backs? Mostly by making the customer deal directly with the payment processor and then documenting delivery of product.
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  • Profile picture of the author Kunle Olomofe
    Thanks guys,

    First off, to the best of my knowledge, setting up merchant accounts in my country that will allow this easily isn't doable at least not easily. Have tried with no luck, our banks are really behind on internet stuff like this in many cases.

    Second, I don't see charge backs being an issue as the people I will be doing this with are close associates or clients that know me well. There's only a handful of them at the moment but that may change. A lot of people locally here don't really use their cards online yet, others do, but many are not used to that and would be happy to have me do it. I just want to know if there are any legal restrictions, as for getting in trouble because of the client that is not likely to happen, many are clients from many years back. Just looking for a way to get them integrated to my online marketing and later they will get used to doing it themselves. It's a way to get their feet wet as it were

    I know the idea is a little unusual which is why I'm asking publicly in case anyone has any experience or info on this.

    Thanks for your input.

    Kunle
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  • Profile picture of the author agc
    From what you have described, try classifying this as a PHONE transaction for your card processor. Because that's a lot closer to what you are actually doing, and they (probably) already have ways of dealing with it. Be prepared to tell them that it's only existing customers and/or that you know your customers personally.
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    • Profile picture of the author Kunle Olomofe
      Originally Posted by agc View Post

      From what you have described, try classifying this as a PHONE transaction for your card processor. Because that's a lot closer to what you are actually doing, and they (probably) already have ways of dealing with it. Be prepared to tell them that it's only existing customers and/or that you know your customers personally.
      Thanks agc, that sounds like a good fit. Have emailed my payment processor and waiting to see what they have to say about it. Cheers.
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