What is a virtual terminal? A virtual terminal is a web-based application that allows businesses to process credit and debit card payments without needing a physical card reader. It’s commonly used by companies that take orders over the phone, by mail, via email, and by those needing to process payments remotely.
Learn how a virtual terminal takes credit and debit cards and the benefits of this type of system.
What You Need to Know About Virtual Terminals
- A virtual terminal is a web-based application that enables businesses to process credit and debit card payments without a physical card reader. It is ideal for phone, mail, and remote transactions.
- The process involves logging into a secure portal, entering customer payment details, submitting the transaction, obtaining bank authorization, and receiving confirmation. Funds are transferred to the merchant’s account within a few days.
- Virtual terminals allow remote payment acceptance, require no additional hardware, offer flexibility across devices, ensure security through encryption, and provide detailed transaction histories for bookkeeping and customer service.
- It is suitable for various business models, including phone and email orders, remote services, event registrations, and recurring payments, making it a comprehensive solution for businesses without physical storefronts.
How Does a Virtual Terminal Work?
Unlike point-of-sale systems, virtual terminals are used for “card not present” transactions. Here are the steps for how a virtual terminal works.
Step 1: The business logs in to access the virtual terminal
The payment processing company provides a secure online portal for transactions.
Step 2: The business enters the customer’s payment information
The merchant manually enters the customer’s card details, including:
- Debit or credit card number
- Expiration date
- Card Verification Value (CVV)
- Customer’s billing address (optional for added security)
Step 3: Submit the payment
After entering the payment information, the merchant submits the transaction for processing.
Step 4: Authorization
The payment processor contacts the customer’s bank to authorize the transaction. This step verifies that the card is valid and that sufficient funds are available.
Step 5: Confirmation
Once authorized, the transaction is completed, and a confirmation is sent to the merchant. The funds are transferred to the merchant’s account within a few business days.
Benefits of Virtual Terminals
Why do many businesses choose virtual terminals? Here are some of the benefits of this type of system.
- Enables a business to accept credit and debit cards remotely. This is ideal for companies that operate without physical storefronts.
- Virtual terminals require no hardware. This eliminates the need for a physical credit card reader or point-of-sale system.
- It offers a flexible payment gateway. Virtual terminals can be used on any device with internet connection, including computers, tablets, and any mobile device.
- Virtual terminals are secure. The process is encrypted and uses security measures to protect sensitive card information during transmission.
- Most virtual terminals offer transaction histories. These detailed records help with bookkeeping and customer service.
- It can be used for phone, email, or online orders. Details are manually entered into the virtual terminal. Professionals such as consultants, freelancers, and repair services can accept client payments without meeting in person. Event organizers can process registration fees via a virtual terminal. You can even use virtual terminals for recurring payments.
A virtual terminal is a versatile and secure solution for processing payments without needing physical card-reading equipment, making it an excellent option for various business models requiring remote payment capabilities. However, don’t trust any merchant services partner to provide secure payment processing. Protect your customer information with CardConnect. CardConnect helps small and medium businesses accept remote and in-person payments with some of the lowest processing fees. In fact, we offer a lower rate guarantee. Start accepting payments over the phone today with CardConnect.
