Get the inside scoop on virtual credit card terminals
Using a virtual terminal lets you run a card payment wherever you have an Internet connection—without using a terminal or card reader. The “virtual” part comes from the fact that all processing occurs online in the application, not on a traditional stand-alone terminal or POS system.
You can use virtual terminals to accept credit cards, debit cards and recurring payments. Some virtual terminals even enable you to process electronic checks, a payment option that some shoppers still prefer. With a virtual terminal, you won’t have to worry about losing business because you can’t accept card payments or you’re at a remote location away from your POS terminal. A virtual terminal enables you to accept card payments away from your primary place of business.
Using a virtual terminal will allow you to process payments anytime, anywhere. Have you ever had to write down payment information, and then process it later when you are back to your brick-and-mortar location? Doing so is both inefficient and potentially risky from a security standpoint.
Some of the main benefits of using a virtual terminal include:
- Processing platform accessible from any computer with an Internet connection
- No need to buy or lease equipment
- Real-time processing
- Easy access to tracking and reporting functions
- Easily set up recurring payments (more about those later)
How a virtual terminal works, step-by-step
Using a virtual terminal to accept card payments is as easy as completing these five simple steps.
- Open the virtual terminal portal on a web browser. The page to initiate a new card transaction will ask for details including the sale amount, card number with expiration date and the card’s security (CVV) code.
- Enter payment data. Key enter or swipe (if the plastic card is physically present) the card information.
- Submit the payment for authorization. The virtual terminal transfers the payment information through the authorization network and returns a response – such as approved or declined – to your web browser.
- Settle the transaction. You’ll likely need to also settle your transaction, which is when the funds actually leave your customer’s account and you get paid. At this point, you can choose to print or email a receipt to your customer (or you can set up your virtual terminal to automatically send out a receipt).
- View reporting details. If needed, you can view reports and transaction details about the payments you and your staff have processed through your virtual terminal. This information is usually available in real-time, so you have an up-to-date view of how much money you’re processing online.
Virtual terminal credit card readers
One of the main benefits of processing transactions using a virtual terminal is that the card doesn’t have to be physically present at your location to run the purchase. However, swiping or dipping the plastic card – when available – can help reduce your interchange fees and processing costs.
Credit card readers come in a variety of styles and have some differences in functionality depending on which one your select. Some readers even have a PIN pad for entering card PINs, which adds to card security. Typically, a card reader connects to your computer via the USB drive and are small, which adds to the convenience of a virtual terminal. You can easily carry a card reader with you in your laptop case or briefcase to accept card payments on the go, at a card-present processing rate.
Using a virtual terminal to process online payments
If you sell goods or services online, a virtual terminal may be a good option for you to process credit cards. Some virtual terminal solutions provide a hosted webpage for online sales that you can seamlessly integrate into your eCommerce website. This payments webpage has the same look-and-feel as your business website, but is hosted by your payment processor’s virtual terminal. (This means that the burden of protecting sensitive data also shifts to your processor – one less thing for you to stress about.)
If you accept payments online, we recommend using the following tools to bolster your security:
- Secure socket layer (SSL) – establishes an encrypted link between the web server and your customer’s internet browser, protecting sensitive data from would-be fraudsters
- Digital security certificate – qualifying for – and prominently displaying – one of these on your eCommerce site will give your shoppers peace-of-mind knowing that your company takes security seriously
Speak with your merchant services provider about your unique situation and if a virtual terminal is the right solution for your online payments processing needs.
Set up recurring payments within virtual terminal
In addition to accepting online and phone orders, a virtual terminal payment application can enable your business to set up recurring billing for your customers. Recurring billing is useful for businesses that bill the same customers with the same payments information time after time, such as for subscription services like newspapers, online subscription boxes, gym memberships or ongoing professional services. To set up recurring payments using your virtual terminal, you will enter the customer and payment details, select the billing frequency (such as daily, weekly or monthly), the number of payments or desired duration and your customers will be automatically billed.
Customers appreciate the following benefits of recurring payments:
- Ability to update their payment method(s) and amounts, as they budgeting needs shift
- More payment options, including ACH transfer from a checking account
- Receipts emailed to them automatically
As a merchant, using recurring billing through your virtual terminal platform can provide your business with the following benefits:
- Streamline your accounting processes and reduce clerical errors
- Fewer late customer payments
- Improve your cash flow through more predictable A/R cycle
- Boost customer loyalty by making your payments straightforward and worry-free
- Customize your billing schedule
- Reduce your liability for storing sensitive payment data since your processor handles it on your behalf
- Access secure transactional reporting, 24/7
- Comply with PCI-DSS requirements (more on that below)
Virtual terminals protect your customers’ payments data
Today’s consumers are increasingly aware of payments fraud and large-scale data breaches. In fact, Vantiv research found that 45% of consumers are aware of recent merchant data breaches that have occurred in the past six months. What’s more, that same study found that 29% of shoppers think it is likely that their card data will be stolen as a result of a data breach within the next 2 to 3 years. As a merchant, it's important to be mindful and take the necessary steps to secure your customers’ data and uphold your reputation – and the card processing system you choose plays a factor.
Reducing your fraud risk
If your business is using a virtual terminal to accept card-not-present payments, you may experience a higher risk for fraud than businesses who mostly accept card-present payments. However, there are measures you and your staff can take to identify and stop criminal activity. You should look for the following signs of suspicious behavior:
- Shipping address of a country or region with a high fraud risk
- Unusually big orders, especially large quantities of the same item
- Multiple orders to the same shipping address
- Orders shipped to an obscure commercial address or PO box
To help reduce the fraud risk associated with key-entered transactions, you should collect the following data from your customers:
- CVV code – three- or four-digit security code on the front or back of the card
- Billing address, including ZIP code – using Address Verification Service (AVS) to confirm the address your customer provides matches what the card network has on file
Simplify compliance with PCI-DSS requirements
As with all types of card processing, keeping security top-of-mind when you’re processing payments is important to your business reputation. All merchants who accept card payments have a responsibility to adhere to PCI-DSS requirements, which ensure you are maintaining secure systems and storing and transmitting cardholder data safely.
Visa and MasterCard have defined four levels of PCI compliance, based on yearly processing volume. It’s important that you understand how your business is classified, so that you can meet the requirements specific to these levels:
- PCI Compliance Level 1: 6+ million Visa and/or MasterCard transactions each year
- PCI Compliance Level 2: 1 million to 6 million Visa and/or MasterCard transactions each year
- PCI Compliance Level 3: 20,000 to 1 million Visa and/or MasterCard eCommerce (online) transactions each year
- PCI Compliance Level 4: Less than 20,000 Visa and/or MasterCard eCommerce transactions each year, plus all other companies that process up to 1 million Visa transactions each year
Most modern virtual terminal platform will help your business meet PCI requirements. Consult the PCI Security Standards Council for more information, or speak with your payments processor.
Access reporting on your virtual terminal transactions
Comprehensive reporting that’s typically built right into the virtual terminal capability allows you to easily review transactions and even track trend data. You can see, at a glance, how much money you’ve made, which employees have processed those transactions and a wide variety of other helpful data.
Other features of virtual terminals
There are many other helpful features of using a virtual terminal to accept card payments, including:
- Accessible by multiple users at your company with unique sign-ons so you can easily track who has processed which transactions
- Accessible via all popular web browsers
- User-friendly web interface that makes learning and using a breeze for everyone at your company, regardless of their level of tech savvy
- Batch settlement automatically initiated at the end of each business day
- Customizable email settings and greeting for users logging into your virtual terminal system
- Email receipt automatically generated to customer and you for your records
- Capture additional details with transactions, as needed, with customizable data fields
Shopping for a virtual terminal
Decided it’s time for your business to take the virtual terminal plunge? Great! Here are some important features to look for when you’re shopping for your virtual terminal:
- Support for multiple users and locations
- Access from all popular internet browsers
- User-friendly interface
- Secure data storage, as well as the option to add extra security with data encryption
- The ability to implement recurring payments and generate refunds
- Customize the transaction details captured based on your business’s needs
- Search customer data and transaction details
- Automatically generate end-of-day batch settlement reports
Easy, secure processing right when you need it
A virtual terminal can let you accept credit and debit card payments easily, affordably and quickly wherever your business takes you. If you ever handle payments away from a traditional POS terminal, consider the many benefits of a virtual terminal. Speak with your payments processor today to see if a virtual terminal might be a good solution for your business.