Shutterstock 1389930986Virtual terminals are similar to traditional credit card processing terminals, but instead of being tied down to a brick-and-mortar location, they allow you to accept and process payments anywhere! With no required hardware and no ongoing upkeep, you can get paid faster and more conveniently, while still accepting credit cards, debit cards, and electronic check payments.

All you need is an internet browser to securely accept payments over the phone, through the mail, or when your customer’s credit or debit card isn’t present. By logging into your payment system through a computer or smartphone, you can enter payment information into a form and with the click of a button, the system processes the payment. Virtual credit card terminals also verify the purchase, issue customer receipts, and report all transactions.

Let’s take a deeper look at virtual terminals and how they can benefit your business.

How virtual terminals work.

To have a virtual terminal, you need the following three items: a virtual merchant account, an internet connection, and a computer or smartphone. Once you have these items in place, you can process recurring digital transactions, echecks (also known as ACH payments), telephone orders, or mail-order purchases. 

Virtual terminal processing is ideal for service-oriented businesses, such as lawn or pest control, as well as salespeople who travel. With a virtual terminal, you can process payments anytime, anywhere. No more waiting to get back to the office or your brick-and-mortar store to process a purchase.

Additionally, virtual terminals can serve as a much-needed backup to your point of sale (POS) system. With no hardware and no on-going maintenance, virtual credit card processing terminals add flexibility and simplicity to your business.

About merchant accounts.

If you currently have a credit card processing system, you are probably familiar with a merchant account. A merchant account is a type of bank account that allows you to accept credit or debit card payments. When a customer purchases a product, the available funds from the credit or debit card are routed to your merchant account. Next, the funds are transferred to your business account through a payment gateway.

A payment gateway enables communication of the card information to the credit card network, such as Visa, Mastercard, or American Express. Over the gateway, the system transfers messages, such as authorization or denial codes as well as the details of the processed transaction. If the customer uses a debit card, then the payment gateway transfers the payment information to the bank that holds the customer’s account.

Shutterstock 367136834Virtual merchant accounts vs. payment gateways.

Although similar to traditional merchant accounts, virtual merchant accounts differ from conventional processing methods. A virtual terminal is an internet-based coordinator of digital payments, such as credit cards. With a virtual terminal, you can accept and process electronic payments through your computer or smartphone with the help of an internet connection.

For example, to key in a customer’s payment information, you would simply log you’re your account and key in the payment information into a standard form. In this case, you do not have to swipe a credit or debit card; thus, no additional equipment is needed.

Virtual terminals are often used for purchases made over the phone, in-person, through the mail, and on-the-go. They are not used for online store purchases. You must have an internet merchant account even if they already have a “regular” merchant account for in-store purchases.

An online payment gateway, on the other hand, is used primarily for online purchases, where the customer initiates the sale. For example, when a customer buys an item through your online store, the payment information is submitted through the website’s shopping cart, which also serves as a checkout solution. In this instance, an online payment gateway is required, allowing you to process any online sales.

Depending on your business, you may require both a virtual terminal and an online payment gateway. If so, you may consider purchasing an all-in-one system, where the payment gateway and the virtual processing terminal are integrated, enabling you to process various types of transactions.

What a virtual terminal does.

Once you have your virtual credit card terminal, you can perform various tasks, such as: swiping credit cards, manually entering payment information, generating receipts for the customer, issuing refunds, establishing automatic recurring billing, conducting research on previous transactions, and creating and saving customizable reports. By accessing these tasks through your virtual terminal, you simplify your administrative tasks, giving you time to focus on customer facing and income-producing functions.

Are virtual terminals secure?

Offering a secure payment processing platform is paramount to the success of your business. With more consumers making purchases online, fraud naturally increases. For example, in 2018, approximately 0.9% of web purchases were subject to fraud, versus 0.8% for mobile and 0.3% for mail or telephone order purchases. Although these percentages seem low, these statistics represent fraudulent transactions based on gross revenue. If a store, however, operates at a 20% profit margin, 1% of total revenue transactions translates to approximately 5% of the profit.

Virtual credit card processing terminals provide several up-to-the-minute security features, keeping your customers’ financial information safe. For example, when any merchant accepts and processes card payments, the business owner must be PCI-compliant. That means your processing systems, such as your POS solution, card readers, online shopping carts, and virtual terminals, must all comply with PCI standards. When settling on a payment device, make sure that it’s PCI-compliant and offers other security measures, such as the encryption of financial data.

Additionally, you should adopt best practices for securing your customers’ sensitive data. For example, only give access to a virtual terminal to those employees who truly need it. Never stay signed into your system and then walk away from the computer. As a business owner, you must guard payment information. Failure to do so could create distrust among your customers and seriously impact your business.

Choosing a virtual terminal.

When choosing a virtual terminal for your business, make sure you do your homework. Here are some questions you may want to ask the vendor:

  • What is the cost of the virtual terminal?
  • Are there any processing fees or monthly fees?
  • What are the features of the terminal?
  • How easy is it to use?
  • Is there any training offered?
  • Is customer service available day and night?
  • Is the terminal PCI-compliant? 
  • Does it encrypt data?
  • Is there a lengthy contract I have to sign?

Businesses today are more mobile and versatile than even ten years ago. With laptops, tablets, and smartphones, you can conduct business from home, a coffee shop, or on-the-go. Adding a virtual terminal to your business allows you to keep payments flowing. The benefits of integrating a virtual terminal into your business will help you increase your revenue and decrease your administrative time, allowing you and your team to focus on high-level issues.

At NAB, we can help guide you through the setup of your virtual terminal through our industry-leading virtual merchant services, providing you with seamless integration and ongoing support, day or night. We have the technology you need to adapt to consumer behaviors by accepting payments in the modern world. We’ll even help you tailor your virtual terminal processing to your specific business, giving you peace of mind and helping you grow your business. To set up a consultation, contact us here or give us a call at 877.840.1952.

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