What is a Virtual Terminal?

Modern businesses require a range of payment channels to support online payments, in-person payments, over-the-phone payments, and more. Business owners exploring their payment options will likely come across the term “virtual terminal.” So, what is a virtual terminal?

In this guide, we explore virtual terminals and how they can help your business. We’ll overview the virtual terminal definition, types of virtual terminals, benefits of virtual terminals, and a range of related topics!

Virtual Terminal Definition               

A virtual terminal is a digital payment terminal that allows you to process credit card transactions when a card is not present. Essentially, a virtual terminal is an online checkout portal on your computer that you can use to process payments on behalf of your customers. 

For example, if a customer calls your business and needs to place an order, you can request their credit card details over the phone. The virtual terminal will allow you to input the credit card number and customer information in real-time. The virtual terminal will then process the payment immediately.

Most virtual terminals are software programs that you can run on a computer or tablet. These are commonplace in businesses that need to accept payments from customers that are not in-store. 

Types of Virtual Terminal Payments

Let’s explore the most popular payment types associated with virtual terminals:

Phone

Over-the-phone payments are extremely popular with virtual terminal users. For example, doctors’ offices, catering companies, wholesalers, and other businesses can all benefit from receiving over-the-phone payments.

Email

If you allow customers to submit order forms via email, a virtual terminal is the best way to enter email-related card-not-present transactions.

Mail-Order

While mail-order payments are declining in popularity, they still play an integral role for many businesses. If your business accepts orders via traditional mail channels, there’s no doubt that a virtual terminal will make your backend payment processing much simpler.

Benefits of Using a Virtual Terminal

Now that you understand virtual terminals and the types of payments they accept, it’s time to decide if this is a tool you need for your business. So, what are the benefits of using a virtual terminal? Let’s find out:

  • Ease of Use: Modern virtual terminals are extremely easy to use. It will only take a matter of seconds to enter details and process payments. 
  • Additional Payment Options: Virtual terminals allow your business to offer multiple payment options to your customers. It’s much more convenient if a customer can provide payments without having to visit your store or office.
  • Security: Modern virtual terminals come equipped with a range of security features that help you protect customer data and process payments securely.

Examples of Virtual Terminals

There are many POS companies, payment processors, and other financial enterprises that now offer virtual terminal services. Let’s check out some top options below:

  1. Square: Square, a company that redefined in-person payments with its easy-to-use magstripe readers, offers virtual terminal payment services.
  • PayPal: PayPal, which is one of the world’s most recognizable digital wallet services, allows its business customers to access virtual terminal solutions. 

Virtual Terminal FAQs

Do you have more questions about virtual terminals and how they can help your business? If so, take a look at some of the questions we receive from our readers:

Are Virtual Terminals Secure?

While there’s no doubt that some fraudsters attempt to use virtual terminals to process transactions, most modern virtual terminals have strong security features built in. Make sure to partner with a virtual terminal provider that prioritizes security, including the safe storage of customer payment information. 

Is There a Difference Between Virtual Merchants and Virtual Terminals?

Yes. A virtual merchant is a business that accepts payments online (such as an online store with full payment capabilities). In contrast, a virtual terminal is a platform that allows for easy card-not-present transactions.

Do Virtual Terminals Accept All Types of Credit Card Payments?

This will depend on your virtual terminal provider. There are many virtual terminals that accept all types of credit card payments, including Visa, Mastercard, American Express, and Discover.

Can You Integrate a Virtual Terminal with POS Software?

Yes. Many leading POS platforms have virtual terminal platforms that make it simple to accept card-not-present transactions. Integrating your virtual terminal with your POS platform can make it much easier to track all types of payments across your business.

Virtual Terminal: Final Thoughts

Now that you know the definition of a virtual terminal, it’s time to decide if you need this payment tool in your small business. At POS USA, you can explore a wide range of point-of-sale products, many of which include virtual terminal solutions. There’s never been a better time to upgrade to a new POS system!

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