Feel free to add virtual terminal to an ever-expanding list of merchant services terms that get tossed around with minimal explanation. In a world where most business owners are more concerned with their products and their customers than knowing how credit card authorization codes work, it can be difficult to keep up. Thankfully, virtual terminals are easy to understand and easy to use through reputable credit card processors. Today, we will be defining virtual terminals, identifying some key benefits of virtual terminals as well as some associated security risks, and answer a few commonly asked questions.
What Exactly is a Virtual Terminal?
To define a virtual terminal, let us first define the component words.
Virtual: “being on or simulated on a computer or computer network.”
Terminal: “(a) system for processing card payments at retail locations.” Generally, point of sale (POS) terminals include hardware and software for processing credit card and debit card payments for in-person purchases.
When you put these two definitions together, we get the concept of a virtual terminal. Virtual terminals are payment processing web applications that allow for manually entered credit card details. Think of any time you have ordered Chinese food on a local restaurant’s web page or purchased a t-shirt online. These are examples of virtual terminals.
The Benefits of Virtual Terminals
While there are certainly some concerns that crop up from utilizing virtual terminals, there are a great many benefits that make them desirable for online businesses and small companies alike. Some of the benefits of virtual terminals include:
Virtual terminals allow customers to prepay for delivery orders. This is particularly beneficial for restaurant orders and other delivery services like flowers, etc.
Independent contractors can bill for their services over the phone or online. While mobile payment processing is a great solution for many business models, many of us do work for clients who we might rarely, if ever, meet in person. Virtual terminals allow for quick and easy payments from afar.
Virtual terminals are convenient for customers. The flexibility of virtual terminal payment processing makes it a great choice for industries such as doctor’s offices, mechanics, and the aforementioned restaurant industry because it is easy to use from the customer perspective.
Virtual terminals are generally bundled with merchant service packages. If you have a merchant service agreement or are looking to enter into one, odds are that virtual terminal features will be included and integrated.
Risks of Accepting Credit Card Payments Through Virtual Terminals
One of the biggest risks of e-commerce transactions including virtual terminal transactions is data transfer. Where in-person credit card purchases utilize EMV chip technology for encryption, virtual terminal transactions must run through a payment gateway to send and receive sensitive customer data. The good news for customers and business owners alike is that payment gateways do utilize encryption and/or tokenization to protect data during and after the transaction. The bad news is that virtual terminal transactions still carry a higher risk than in-person purchases.
The primary risk of over the phone and other manually transferred purchases lies with human error. A chip reader will never mistype a number. A human being listening to numbers over the phone certainly might. With each layer of human interaction comes another opportunity to make a mistake. Incorrectly entered data can easily lead to penalties including chargebacks.
Virtual Terminal FAQs
Are virtual terminal payments secure?
Yes, virtual terminal payments are secure and they carry the same PCI Compliance benefits as other credit card processing methods. All e-commerce transactions carry an inherently greater risk than chip card transactions, but the fact remains that they are very secure overall.
Can I use mobile payment processing hardware for virtual terminal transactions?
If you have a mobile payment processing solution, it is generally recommended to make that your first option. As mentioned previously, taking as many human elements out of the equation as possible is the best way to keep your business safe from fraud and honest mistakes. Using a chip reader or swiping a card is almost always preferable to manually keying in card information.
What information do I need to gather to process virtual terminal payments?
Credit card numbers are not enough to properly process an online or over the phone payment. Businesses should always collect the following information:
Credit or debit card number
CVV security code
Expiration date
Billing Address Zip Code
Can virtual terminal solutions be used to store customer data?
An integrated virtual terminal solution will often allow businesses to store customer data including names, phone numbers, addresses, and relevant credit card information. Speak to a reputable merchant service provider to learn more about how their software capabilities can allow your business to streamline the virtual terminal payment process.
True Merchant Offers Virtual Terminal and Other Payment Processing Solutions for Small Businesses
The payment processing experts at True Merchant understand that accepting virtual terminal payments is vital for many small businesses. This is why we take the time to explore options with our clients, finding the right fit for their budget and individual needs. We are proud to offer a large suite of products including wireless credit card machines, online payment solutions, mobile payment solutions, and much more!
If you are considering mobile credit card payment or simply have any questions about how we might be able to help, do not hesitate to call or email us today! A qualified professional will be ready to help you with the next steps toward taking your business mobile.
