Credit card liability

Me and my brother are starting a local business. The product/service will be sold online, then we will carry it out.

It's sort of a delivery business- they order a product to be delivered in, say, 3 months, and we deliver it to them. However, we only want them to be charged when it is delivered, not when they sign up.

I have yet to find a way to do this, until I stumbled about PayPal's Virtual Terminal. It allows you to charge the customer if you have their credit card information.

However, another issue is raised: liability. We need a way to get the credit card information from the customer very securely. Phone, obviously, is the best choice, but we would not be around to answer the phone all day. We would also have to store the credit card information to charge them when the time comes.

So, I have a few questions:
1. What is a good way to approach this? Is there a good way to receive CC info?
2. What are some laws or regulations surrounding this?

But I think the phone is not a better alternative at all if you want to provide the full security of your customers.

It is always better to ask an expert. You can consult the specialist on Identity Theft or call Credit Report Advisors. They can give you even more professional and helpful information.

As far as I am aware most small businesses use some secure payment service to handle card transactions, that way you don't need to get involved in the details of the customers, cards. There are a number of these services available, such as this one , so it is worth looking around to find one you like.

You can actually do this using any payment gateway (e.g. Authorize.net) and a normal merchant account. Here is what you do:

a. Someone signs up for say to buy a $100 something
b. You pre-authorize their credit card for $100. Then you continue to renew the pre-authorization until delivery date
c. If the client cancels before delivery, you can release the pre-authorization
d. If the client accepts delivery, you can 'capture the preauthorization' and transfer the money into your merchant account, then your bank account

Pre-auths are great because they hold the funds in the clients account -- so they can't spend them and not pay you later by NSF or whatever. When you capture payment, that is when the money is moved.

A few words of caution: You are messing with peoples money. You have to explain what a preauth is and how it works or people will become confused and angry.

Dan