What is a Virtual Terminal?

Aug 15, 2022

If you’ve ever had anything to do with a retail or service business, there’s a good chance you’ve heard the term ‘virtual terminal’ thrown around a time or two. But what does it mean? How do virtual terminals work and is this modern payment processing solution actually necessary when it comes to running your online business?

Virtual Terminals Explained

Virtual terminals are secure web pages that enable merchants to enter credit card or debit card details manually on behalf of an authorized cardholder. They work as an alternative to chip, tap, and swipe machines.

What You Need to Know About Virtual Terminals

Virtual terminals are only for business use, meaning they don’t have a separate terminal that enables customers to enter their pins. Instead, the interface is similar to that of an e-commerce checkout page, with spaces to enter the cardholder name, card number, expiry date and CVV.

Virtual terminals are meant to be used primarily for transactions where the cardholder is present. That said, they can also be used for card-not-present transactions when clients place an order over the phone or via mail.

In some cases, you might be able to preauthorize cards using a virtual terminal but this functionality varies depending on the payment processing provider.

What To Look For in a Virtual Terminal

A virtual terminal is an important part of your business operations so it’s crucial to find a payment processor that can host a reliable and secure virtual terminal. When exploring your options, look for companies that are known for issuing high-risk products for small businesses, and ensure they’ve got a great reputation to back them.

Additionally, you should make sure the processor you choose offers features such as:

Encryption for transactions/logins and high-level data security that protects you and your customers from credit fraud
Chargeback protection and payment dispute management
A simplified and user-friendly online refund process that you can navigate directly from your virtual terminal
Round-the-clock support via phone, email or chat to ensure you have access to urgent help anytime you need it

With the right virtual terminal setup, you can easily and securely process payments for your business without worrying about fraud or frequent outages.

Frequently Asked Questions

What does a virtual terminal do?

A virtual terminal lets you charge customers using a credit or Visa/Mastercard/American Express debit card. You can also use your virtual terminal to create sales reports and access payments history.

Is there risk associated with using a virtual terminal?

Because virtual terminal payments are typically keyed-in, card-not-present transactions, you can usually expect that your payment processor is going to consider it a high-risk transaction. Because of this, you might find that you’re faced with higher processing fees, which help your processor cover costs that are associated with issuing high-risk products, such as fraud and chargebacks.