A virtual terminal is a web-based application that allows businesses to process credit card payments from anywhere with an internet connection. A virtual terminal can be used through a web browser on any device, including a desktop computer, laptop, tablet or smartphone.
Businesses can access a virtual terminal through their merchant services provider’s website to manually enter customer credit card information and complete transactions. Virtual terminals are ideal for businesses that need to accept payment information over the phone or by mail.
How Does a Virtual Terminal Work?
Virtual terminals work similarly to other point-of-sale (POS) systems: A customer pays by entering their credit card information into a secure form on your website.
Merchant account providers typically offer them as part of their ecommerce solutions, or you can purchase standalone software from another provider.
Businesses can use virtual terminals in two main ways:
- To accept payments by phone
- To accept payments through their websites.
In both cases, the business owner enters the customer’s credit card information into the software and the transaction is processed immediately.
Virtual terminals are usually hosted on secure servers and come with other security features such as identity verification. They also offer tracking and reporting so you can see your sales numbers and product performance at a glance.
In many cases, you’ll be able to download this data for your records or for integration with other accounting software programs
What Are the Pros of Using a Virtual terminal?
A virtual terminal (VT) allows merchants to accept credit card payments through any telephone or web-enabled device. It works for mail order, telephone order (MO/TO), and e-commerce businesses.
With a VT, you can manually enter your customer’s credit card information into the terminal, as you have a computer with an internet connection.
So what are the pros of using a virtual terminal?
- Payment processing is faster and easier than waiting for checks to arrive.
- No need to handle cash or checks.
- You can process transactions anywhere in the world as long as you have an internet connection.
- Offers more security than traditional payments because all payment details are encrypted.
- You don’t need special software or equipment to process orders.
- Customers can use their preferred payment method, such as Visa, MasterCard, American Express, etc.
- Eliminates the chance of human error when entering card numbers manually at a point of sale (POS) system or terminal.
- Get paid faster than ever before with next-day funding options that let you access funds immediately after the money clears directly into your account — at no extra charge!
Lastly, you save money on processing fees compared to traditional terminals because there are no hardware costs or ongoing maintenance fees needed for operation.
Types of Virtual Terminals
There are two types of virtual terminals: hosted and non-hosted.
Hosted Virtual Terminal
A hosted virtual terminal is an online payment form that routes transactions through a payment gateway but looks like it’s part of your website. When a customer fills out the form and submits payment, the transaction details are sent from your site to the gateway for processing.
Non-hosted Virtual terminal
A non-hosted (or “standalone”) virtual terminal looks more like its physical cousin, with a login page that requires username and password credentials. Even though it’s accessed via your browser, it has no connection with your website.
Virtual Terminals & PCI Compliance
Another thing you need to know is that virtual terminals are covered by PCI compliance standards. That means you need to protect the data of your customers.
Most people don’t take this seriously enough, but it’s a huge deal. Hackers love to go after small businesses because they’re easier to hack and have a harder time dealing with the aftermath of a security breach.
You can read more about PCI compliance, but in short, you need to make sure that no one is stealing your customer’s credit card information. A big part of that is encrypting their data and making sure it stays secure.
A lot of virtual terminal providers will help you with this or offer encryption services, so make sure your provider has these features before you sign up for anything.
Important Considerations When Choosing a Virtual terminal Provider
An important step in setting up a virtual terminal is choosing the provider that will host your virtual terminal service. There are many options to consider, but you should definitely think about cost. Some providers charge on a “per transaction” basis, while others charge monthly fees. Figure out how much transactions cost, and determine whether that fits into your budget.
Also look at other factors like customer service and support options. Some providers offer 24-hour phone support, while others only offer email or online chat support during business hours. You may want to consider these options when deciding which provider is best for you.
You’ll also need to think about security and the types of transactions you want the virtual terminal to accept.
Here’s how to set up a virtual terminal:
- Sign up for a merchant account.
You’ll need a merchant account in order to accept credit cards. A merchant account is a sort of bank account that holds funds collected from your customers’ transactions until they’re deposited into your business bank account.
- Set up an online payment gateway (if you don’t already have one).
A payment gateway is the service that processes transactions between your customer’s bank and yours, then deposits the funds into your merchant account.
Most of the largest merchant services companies also offer their own payment gateways, so it’s easy to get both at once. Some merchant services companies will charge an additional fee for setup and/or monthly use of their payment gateway, so make sure to ask about any charges before signing up.
- Choose a virtual terminal.
The next step in setting up a virtual terminal is choosing a provider that will host your virtual terminal service. Spend quality time comparing terminal providers before committing to a service. You want to work with reliable service providers because payment convenience is central to any business.
- Test your virtual terminal.
Your processor should provide instructions on how to do this — it may involve submitting a test transaction and then voiding it or issuing yourself a refund. If you have any questions during the testing process, contact helpdesk support at your payment processing company.
Set Up Your Virtual Terminal Today
Ready to take your business to the next level? Set up a virtual terminal now and start enjoying convenient credit card payments.