At the simplest level, a virtual terminal is a website or page on the internet that is secure and gives you the capability to process payments. Unlike a card reader, you can make the payment any time as long as you have the payee’s information, and don’t need their card to make the transaction. This is what makes the system’ virtual’, as nothing physical is needed to make a payment.
In general, when you set up a virtual terminal with a provider such as Payment Cloud, you will be given a log-in to the secure page or app where the terminal itself is embedded. This will be secure and will require a username and password to enter. From the terminal on the web page, you will be able to input the card details of the customer whose details you are processing. Once the details have been added, the money will transfer over into your bank account, and any fees will be taken in the process as needed.
The most common situation where this is used is when the customer is not physically with you to make the payment with a card machine. This may be when you make a booking over the phone and need to leave a deposit, for example. A transaction done like this is called a manual transaction, and all that you need is a computer, access to a virtual terminal, and connection to the internet.
Virtual terminal advantages
A virtual terminal comes with several unique advantages over other payment methods:
1. Virtual terminals give you the ability to receive payment for an item or service without the person having to be there. This is useful if someone is trying to make a payment over the phone or cannot be present for any other reason. Note that if the customer is there, then you will need to have a chip and pin machine available to ensure the payment is verified and secure.
2. The second advantage is flexibility – as transactions can be made anywhere at any time, you don’t need to worry about having customers coming to your store or office to make a payment. This is an advantage for your customers as well as for yourself and can help to ensure good business.
Virtual terminal disadvantages
Although virtual terminals have several advantages, there are several cons that you should consider.
1. To avoid chargeback fees, you need additional security measures to take a transaction when the customer is not present with you.
2. Taking payment when a customer is with you is as simple as keying in a PIN number to a machine, or even just tapping a contactless machine for smaller transactions. To take payment through a virtual terminal, you need to type in all of the card details, which can take time and lead to mistakes if a number is entered incorrectly.
3. When compared to card payments, when the customer is present, the fees when taking virtual payments are generally higher for the added security and protection that the third-party provides to provide the service.