Virtual Terminal Credit Card Processing: What It Is, How Much It Costs, and How to Set It Up
If you own a small business where orders come in via email, over the phone, or even through traditional mail, deciding which payment processing options to use can be a little tricky. Receiving checks or waiting for bank transfers can hold you up, delaying work to make sure that payments are processed.
Small business operations are changing and need to be more agile and quick to react to customer needs. Thankfully, the options now available for small businesses to process payments are many, and virtual terminal credit card processing is one of the simplest for small businesses that don’t physically meet their customers, but need to process payments quickly, easily, and securely.
What is virtual terminal credit card processing?
Virtual terminal credit card processing, as the name suggests, is a means of processing credit cards virtually, through an online program, without requiring the use of a physical credit card terminal, such as you would have in a retail store.
Virtual terminal credit card processing essentially turns your computer, smartphone, and other devices, into a credit card terminal. All you need is an internet connection, a device, your web browser, and a merchant account.
There is no traditional credit card terminal and no additional app or software to be purchased. It’s simply a web-based payment platform that opens on your browser and instantly allows you to submit your customer’s credit card information and process the payment on the spot.
With a virtual terminal, much of the technical stuff that usually comes with payment processing is mitigated. All that’s required from you is to open the browser, log into the platform, and fill in the credit card information. Once the payment is processed, both you and your customer receive an email to confirm the transaction, and you’re ready to deliver on their order.
Which businesses work best with virtual terminals?
Different payment processing options suit different business operations. Those who have a physical storefront or welcome customers on-site may favor a physical POS solution. If you’ve got the customers there, it makes more sense to secure their payment while they are on the premises.
Small businesses that operate online, on the other hand, may find it more practical to install an online payment processing gateway through an e-commerce platform that allows their customers to submit their payment information and make purchases without anyone from the business having to put it through manually.
If neither of those scenarios fit your business, or you’ve weighed up the costs of a physical POS and an e-commerce platform and can’t reconcile the need for these in your business, then a virtual terminal for credit card processing is the best solution to ensure fast, secure payments. Without needing to install systems, software, and other expensive payment hardware gadgets.
Business profiles that benefit from virtual terminal credit card processing:
- Those who accept credit cards over the phone or via mail order
- Home run organizations and those who work remotely
- Traveling salespeople
- Service-oriented businesses such as pet grooming and childminding
- Professional services from visual arts and copywriting, through to legal and accounting
Pros and cons of virtual terminal credit card processing
As with all payment solutions, there are pros and cons to using a virtual terminal for credit card processing. With these in mind, you can best assess if a virtual terminal meets your business needs.
Virtual terminal credit card processing at its best
No setup required
With a virtual terminal, there is no setup required to get you up and running. All you need to do is open the virtual terminal URL on your web browser, log in, and you’re ready to process your payment.
No hardware required
As an online, web-based solution, there is no hardware needed to make your virtual terminal work. Your existing computer, phone, or iPad is instantly transformed into a payment portal.
Speed up checkout
Adopting a virtual terminal allows you to process your payments in an instant; as soon as you have your customers’ credit card details. This cuts down on waiting for transfers and time consuming back and forth, giving payment instructions.
Electronically issued receipts
When you process a payment through your virtual terminal, your customer and yourself are automatically emailed with the payment receipt. This can also be set up to send via text, reducing the need for posting such records.
Most virtual terminal solutions will allow you to set up recurring payments for customers that you work with regularly, saving you time manually processing payments each new billing cycle.
Quick transfer times
When processing payments through a virtual terminal, the transaction happens immediately and reaches your bank faster than if you were previously having invoices paid by bank transfer.
The downsides of virtual terminal credit card processing
Virtual terminal credit card processing solutions aren’t going to meet all business needs, and it’s important to get a balanced look at what the virtual terminal differs from other solutions, to assess if it’s right for you.
Payment processing is manual
Virtual terminals require you to input the credit or debit card information into the system manually in order to process the payment. If you have an extremely high volume of payments coming through each day, this may not be a solution that works for your business.
Card-not-present fees can be higher
All systems which do not require customers to be present to make payments will often have slightly higher fees or require extra security measures to avoid chargeback fees. If you see customers face to face, a virtual terminal may not be the most economical option for you.
What’s the cost of a virtual terminal?
It’s not possible to give a set price for a virtual terminal as there are a variety of factors that come into play. Which provider, what kind of plan, your transaction volume, and if you have other solutions with that provider can all alter the cost.
While there are plenty of varying factors, most do work on a similar model: you pay a percentage processing fee and a per typed-in transaction fee, and some will have monthly fees. Those with monthly fees will typically offer lower processing fees and more features.
Analyzing a range of providers, the average processing fee is between 2.9% and 3.5%, and the average per typed-in transaction is 15-30¢.
When you’re assessing which provider to use, it’s important you analyze why the variations are in place and which best suite your business. Low processing fees, for example, may mean high per-transaction costs or visa versa.
How to find the right virtual terminal provider?
Which is the best virtual terminal credit card processing provider is a question that can only be answered by you, based on the unique needs of your business. Every provider has slightly different plans and fee structures. These need to be compared to how your business operates to qualify which provider and plan are going to best meet your needs and offer the most value. Ask yourself:
Do I need software and hardware plans?
If you see some customers in person, you may want a duel plan that allows you to take payments with the customer present, as well as a virtual terminal for cases where the customer is not there. Card-present-payments have lower interchange fees, so a combination plan may be something that could help you save on payment processing costs.
How many transactions do I make?
Often when the processing percentage fee is low, the per typed-in transaction fee will be higher. If you’re processing a significant number of transactions, it may work out better for you to go with the higher processing fee and the lower per typed-in transaction fee.
What extras do I need?
Don’t just compare fees. Be sure to look at the services offered by the virtual terminal provider to get an idea of what services you really need and what you don’t. This way, you can compare on a number of factors and narrow down based on the one that best fits all of your requirements.
How is virtual terminal credit card processing setup and operated
As is the case with all payment processing solutions, you do need to be set up with a merchant account and a payment processor before you can start using a virtual terminal for credit card processing. It is the merchant account that tells the banks where the money needs to go, and the payment processor that enables that transaction.
Once you have these, all you need to do is set up an account with a provider, get login information, and you’re ready to start processing payments. All you do is:
- Log in
- Enter your customers’ credit card details
- Submit and relax.
To process those payments, of course, you will need to acquire your customers’ credit card information, and you may also need to gather extra security information, which helps ensure that you don’t submit any fraudulent payments, and it helps keep your chargeback fees low. What you need for this is similar to what customers would have to input when making an e-commerce purchase, so most will be used to providing this information.
The types of information your virtual terminal could request, include:
- Credit card network (MasterCard, Visa, American Express, Discover, etc.)
- Amount to be charged
- Credit card number
- Credit card expiration date
- CVV code
- Customer name
- Customer address
- Customer email (to send receipt)
- Customer phone number
- Shipping information (if applicable)
With all of this information entered and submitted, the virtual terminal then sends the credit card information to an integrated payment gateway. This is done securely through an encrypted connection for the highest standards of security.
The payment gateway forwards your payment information to the processor used by your bank, who will then contact the issuing bank of the credit card being processed to make sure the funds are available and the card belongs to your customer.
Once confirmed, your processor will connect with your merchant account to set up the payment deposit. All of the above is done within a matter of seconds. You will be able to see this completion on the virtual terminal and the customer will be notified by email (or text, if they have opted for text) along with a receipt.
Ready to virtually process payments in an instant?
If virtual terminal credit card processing sounds right for you, Payment Depot can help you to assess the best solutions to fit your business needs. Payment Depot offers virtual terminals and has a friendly team ready to answer all of your virtual terminal credit card processing questions.
FAQs about Virtual Terminal Credit Card
Q: What is virtual terminal credit card processing?
Virtual terminal credit card processing is a method that facilitates credit card processing virtually through an online program. It transforms your device into a credit card terminal and requires only an internet connection, a device, your web browser, and a merchant account.
Q: How does a virtual terminal credit card processing system work?
Virtual terminal credit card processing requires you to input customers’ credit card details manually into the system for processing the payment. In terms of security, it uses an integrated payment gateway through an encrypted connection to transmit and process the payment. Once a payment is processed, both the merchant and customer receive an email confirmation.
Q: What are some benefits of using a virtual terminal for credit card processing?
The advantages of using virtual terminals for credit card processing include no setup or hardware needs, faster transactions process, ability to set up recurring payments, quick transfer times, and automatically sent electronic receipts to both parties.
Q: Are there any drawbacks to using a virtual terminal for credit card processing?
Drawbacks include the manual aspect of payment processing which may not be ideal for businesses with high transaction volumes. There’s also the potential for higher card-not-present fees for businesses that do not require customers to be physically present to make payments.
Q: What factors influence the cost of a virtual terminal?
Costing for a virtual terminal depends on a range of variables such as the provider you select, the type of plan, your transaction volume, and whether you have other solutions with the same provider. Generally, costs involve a percentage processing fee, a per typed-in transaction fee, and potentially monthly fees.
Q: What types of businesses can benefit from virtual terminal credit card processing?
Businesses types that can benefit from virtual terminal credit card processing include companies that need to process payments over the phone or via mail order, home-run organizations, remote workers, traveling salespeople, service-oriented businesses, and professional service providers.
Q: How do I set up a virtual terminal for credit card processing?
To initiate a virtual terminal for credit card processing, first, you need to have a merchant account and a payment processor. Then, create an account with a provider to get login details. To process payments, you need to gather some customer information which includes credit card details and a few more security-related information.
Q: Which is the best virtual terminal credit card processing provider?
Determining the best virtual terminal credit card processing provider depends on the individual needs of a business because each provider offers slightly different plans and fee structures. So, the best provider is determined by evaluating what aligns best with how your business operates.
Q: What types of information is required to process payments on a virtual terminal?
Information required for processing payments in a virtual terminal usually includes credit card network, amount to be charged, credit card number, expiry date, currency, CVV code, customer name, address, email for sending receipt, phone number, and shipping information, if applicable.
Q: Does virtual terminal credit card processing ensure secure transactions?
Yes, virtual terminal credit card processing ensures secure transactions by sending the credit card information to an integrated payment gateway using an encrypted connection. This high standard of security helps to protect against fraudulent payments and keeps chargeback fees low.