If you’re a business, you know there’s more than one way to take a payment. Virtual terminals are a seamless payment method that most businesses should opt to include in their arsenals. Whether you’re a small business owner looking to streamline operations or an enterprise seeking to expand payment capabilities, understanding how virtual terminals work and their benefits can revolutionize your approach to sales. In this blog, we’ll explore the ins and outs of virtual terminals, their step-by-step usage process, and how they seamlessly integrate with existing payment systems to enhance your business’s efficiency and security.
What is a virtual terminal?
A virtual terminal is a software application that enables merchants to accept payments without needing the physical card, unlike a traditional POS terminal. Known as “card-not-present” (CNP) transactions, these virtual terminals turn computers, smartphones, and tablets into POS systems, allowing both brick-and-mortar and eCommerce businesses to process credit card payments over the phone, through the mail, or online. With just an internet connection and a data connection, you can start accepting payments—no POS hardware needed.
How a virtual terminal enables online payment processing
Physical POS terminals require direct interaction between the customer and the merchant to accept transactions via magnetic stripe, chip, or contactless payment. In contrast, virtual terminals eliminate the need for this exchange.
A virtual terminal powers online payment processing through an internet-connected device, allowing merchants to manually enter customer payment details into a web-based interface. The virtual terminal then securely transmits this information to a payment gateway, which processes and authorizes the transaction. This seamless and secure method of handling transactions not only enhances convenience for both merchants and customers but also expands the business’s ability to accept payments from anywhere, supporting diverse sales channels and improving overall operational efficiency.
Virtual terminals, powered by companies like Payanywhere’s Payments Hub, facilitate payment processing and authorization through an online platform. The merchant simply accesses the Payments Hub, enters the customer’s information (card number, expiry date, security code, and address), and completes the payment. An electronic receipt is then sent to the buyer, finalizing the transaction. Payments are typically received the same day or the next. It’s that simple.
How does a virtual terminal work?
Using a virtual terminal is a straightforward process that can be broken down into a few simple steps.
First, the merchant logs into the virtual terminal via a secure online platform, which is usually provided by their payment gateway service. Once logged in, the merchant accesses the payment processing interface, where they can manually enter the customer’s payment information. This includes details such as the card number, expiry date, security code, and billing address.
After inputting the required information, the merchant verifies the details for accuracy before submitting the transaction for processing. The payment gateway then securely transmits the payment data for authorization. During this step, the gateway checks the card’s validity, the availability of funds, and other security parameters to prevent fraud. If the transaction is approved, the gateway sends a confirmation back to the merchant, who can then finalize the sale. An electronic receipt is typically generated and sent to the customer via email, completing the transaction. The entire process is designed to be quick and efficient, ensuring that payments are processed smoothly and securely.
Benefits of using a virtual terminal for businesses
One of the primary benefits is the convenience they provide. Unlike traditional POS systems that require physical hardware, virtual terminals can be accessed from any internet-enabled device, including computers, smartphones, and tablets. This means merchants can process payments from virtually anywhere, whether they are in a brick-and-mortar store, at a trade show, or working remotely. The ability to accept payments without being tied to a specific location or device greatly enhances operational flexibility and can lead to increased sales opportunities.
Costs
Another significant advantage of virtual terminals is its low upfront and ongoing costs. Traditional POS systems often involve substantial investments in hardware, installation, and maintenance. In contrast, virtual terminals require no special equipment.
Maintenance
Additionally, because virtual terminals are software-based, they can be easily updated and maintained by the service provider, ensuring that businesses always have access to the latest features and security enhancements without incurring additional costs.
Security measures and fraud prevention
Security is also a key benefit of using virtual terminals. These systems are designed to handle “card-not-present” (CNP) transactions, which are inherently more susceptible to fraud. To mitigate this risk, virtual terminals typically incorporate robust security measures, such as encryption, tokenization, and compliance with PCI DSS standards. These protections help safeguard sensitive customer information and reduce the likelihood of fraud and data breaches. Moreover, by using a reputable payment gateway, merchants can leverage advanced fraud detection and prevention tools, providing an additional layer of security and peace of mind.
Speed and ease of use
Virtual terminals streamline the payment process and improve the customer experience. Transactions can be completed quickly and easily, without the need for physical interaction or the presence of a card. This is particularly beneficial for businesses that handle orders over the phone, through mail, or online, as it simplifies the checkout process for customers. The ability to send electronic receipts and provide prompt payment confirmations further enhances customer satisfaction and builds trust.
Overall, the efficiency, cost savings, security, and convenience offered by virtual terminals make them an attractive option for modern businesses looking to optimize their payment processing systems.
Integration with payment processing systems
Integration with existing payment systems is another key aspect of how virtual terminals work. Many businesses already use various payment processing tools and systems, and a virtual terminal can often be seamlessly incorporated into these existing frameworks. Most virtual terminals are designed to be compatible with popular accounting and inventory management software, enabling automatic updates and synchronization of sales data. This integration helps streamline operations by reducing manual data entry and minimizing the risk of errors.
Furthermore, virtual terminals can be used alongside traditional POS systems, allowing businesses to maintain a comprehensive and flexible payment processing setup.
For instance, a retail store with a physical POS terminal can also use a virtual terminal for phone orders or remote sales. This dual capability ensures that businesses can cater to different customer preferences and sales channels without needing separate systems for each. The ease of integration and the ability to work in tandem with existing payment infrastructure make virtual terminals a versatile and valuable tool for modern businesses.
Does your business need a virtual terminal?
Virtual terminals offer numerous advantages for businesses of all sizes, particularly those seeking flexibility and efficiency in their payment processing systems. As is the case with any merchant solution, it ultimately depends on your business needs. If you are just starting up your business and need to accept payments immediately, a virtual terminal is handy because it doesn’t require any hardware and you can start processing transactions immediately. Likewise, if you don’t need a physical POS terminal, or if telephone or mail orders comprise the bulk of your business, a virtual terminal is a good choice.
Finally, many consumers aren’t comfortable submitting payment information online and prefer handing over their credit card information to a real person. A virtual terminal helps limit missed sales and provides yet another payment avenue.
Find the best virtual terminal with Sekure Payment Experts
Virtual terminals can be an extremely useful payment tool regardless of your business type. In today’s retail environment, where ecommerce is booming and telephone orders and curbside pickup are more popular than ever, a virtual terminal can significantly enhance your business by enabling seamless contactless shopping. Ultimately a virtual terminal doesn’t replace the need for a point of sale or payment processing platform, but it offers an additional medium to take payments and keep customers happy.
As a merchant ally, we’re always looking for ways to help businesses like yours save on processing costs. Reach out to a Sekure Payment Expert today, and we’ll assist you in finding the optimal virtual payment solution for your business and help you save.
Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.