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Virtual Terminals for Online Payment Processing

Welcome to Part III of Choosing Credit Card Processing Terminals. This article will provide a high-level overview of Virtual Terminals.

Virtual Terminal cardAs you might imagine, a virtual terminal is used in the virtual world, aka cyber space. Unlike the stationary and wireless terminals discussed in the 1st two parts of this series, where credit cards are swiped through physically present card readers, virtual terminals are able to process debit and credit cards as card-not-present transactions.

A virtual terminal is simply a piece of software that, when paired with a payment gateway from a merchant account provider, enables a business owner to key-in a customer’s credit card information and process the transaction.

Setting Up a Virtual Terminal

When setting up the credit card payment gateway through the credit card processor, there is usually an option to add a virtual terminal. While virtual terminals are sometimes offered at no additional cost, companies like PayPal charge as much as $30/month for this service.

Keying-in transactions through a virtual terminal is very similar to a customer entering their own information when purchasing though a website’s secure shopping cart checkout page. The credit card processing fees are the same for the merchant, although slightly higher than swiped transactions.

The main benefit of using a virtual terminal is the convenience it provides for the merchant. Virtual terminals allow businesses to accept credit cards over the phone, from mail orders or online, efficiently and securely processing transactions from their personal computer, and actually, from any computer with Internet access throughout the world.

Who Should Use a Virtual Terminal?

Due to the fact that the customer and card are not present during the sale, many mail order/ telephone order (MOTO) businesses use a virtual terminal to process customer transactions. Sometimes these businesses are subscription type services.

Virtual terminals work well for subscription type services in which recurring payments can easily be processed on a specified date. In addition to automatically billing a card on schedule, some virtual terminal programs have the ability to ACH (Automated Clearing House) customer funds directly from a checking account.

Using a virtual terminal can be ideal in situations where a custom pricing comes into play for goods or services sold online. For example, professional services of an interior designer or home building inspector can vary based on the size of the home. A merchant can determine price based on square footage, contact the customer for approval, collect credit card data, and process the transaction via the virtual terminal over the phone. Declines and approvals take place almost instantly.

Also, a business owner with a brick-and-mortar location can take credit card payments face-to-face from customers in the store without a stationary terminal by manually inputting the card data into the virtual terminal. Due to the higher rates for keyed-in transactions, this method is only recommended when it is not possible for a business to use a stationary terminal.

Using A Virtual Terminal

virtual terminalUsing a virtual terminal is simple. The merchant logs into a secure page on the payment gateway provider’s site, accessing their account. Once logged in, the merchant can fill out form fields, entering the customer information including the credit card data and then processes the order. The merchant has the ability to email receipts directly to customers. The merchant can also quickly process refunds through the virtual terminal.

Determining whether or not your business should incorporate a virtual credit card processing terminal is relatively straightforward. Hopefully the information above will help clear up any confusion, rather than further confuse you. If you have any questions regarding virtual terminals, reach out to us. We’d be happy to put you in touch with one of our processing partners that can answer any of your questions.

Learn about complete POS (point of sale) systems in this article…

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