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 options 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 is a means of processing credit cards virtually, through an online interface, 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 already taken care of. 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?
Virtual terminals aren’t a one-size-fits-all tool, but they’re perfect for any business that doesn’t take most payments face to face. If you rely on email orders, phone calls, or remote clients, a virtual terminal can simplify the entire payment process. Here are the types of businesses that usually get the most value out of this setup.
Service-based businesses
If you’re a consultant, designer, copywriter, contractor, or any type of service provider who invoices after delivering work, a virtual terminal makes it easier to collect payment as soon as the client gives the green light. Instead of waiting on a check or chasing someone through email, you can key in their card details and confirm payment right away. It helps with cash flow, cuts down on late invoices, and keeps your admin work to a minimum.
Professional services and remote offices
Accountants, legal offices, medical practices, and other professionals who work with clients remotely often rely on phone or email communication. A virtual terminal lets your front office staff process payments quickly while staying compliant. It’s also useful during busy periods when clients want to pay over the phone and don’t have time to come into the office.
Trades and home services
Many home service businesses schedule jobs through phone calls or online bookings. If you run a plumbing, HVAC, electrical, or cleaning company, a virtual terminal makes it easy to take deposits, secure bookings, or accept full payment before you dispatch a technician. You give customers a convenient way to pay while reducing cancellations or no-shows.
Food, catering, and delivery services
Caterers, meal prep services, and specialty food businesses that operate on preorders can process payments as soon as the order comes in. A virtual terminal also works well for small bakeries or local food entrepreneurs who often take custom orders over text or direct message. It removes friction and helps lock in orders earlier.
B2B companies
If you sell products or services to other businesses and receive orders through email or over the phone, a virtual terminal helps you collect payments without setting up a full ecommerce system. It’s especially helpful for recurring orders, custom invoices, or any situation where the buyer needs to pay before fulfillment.
Freelancers and independent creators
Whether you’re a photographer booking shoots, a coach selling sessions, or a maker taking custom orders, a virtual terminal gives you a simple way to collect payment from clients who prefer to pay by card. You don’t need a storefront or a checkout page. You just log in and run the payment.
Nonprofits and community groups
Nonprofits often receive donations during events, over the phone, or in response to direct mail campaigns. A virtual terminal makes it easy for staff or volunteers to process a donation in real time. It’s simple, secure, and reliable, which matters when you’re managing a high volume of different types of donors.
Seasonal and pop-up businesses
If your business runs part-time or only during certain seasons, a virtual terminal saves you from investing in hardware that will sit unused most of the year. You can accept payments wherever you have internet access. It’s ideal for event-based businesses, holiday-only services, or side hustles that need a professional way to take payment without the added cost.
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.
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Pros of virtual terminals
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, just 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.
Recurring payments
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.
Cons of virtual terminals
Virtual terminal credit card processing solutions aren’t going to meet all business needs, and it’s important to get a balanced look at how 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 these fees and factors and decide which best suits your business. Low processing fees, for example, may mean high per-transaction costs or visa versa.
How to find the right virtual terminal provider
Choosing a virtual terminal provider can feel overwhelming at first, especially when every option promises simple setup, low fees, and tight security. The truth is that not all virtual terminals work the same way, and the right one depends on how your business operates, how you accept payments, and what you want the experience to feel like for your customers. Here are the things to look for as you evaluate your options.
Look for a provider that makes setup easy
Most virtual terminals should work with just your computer, phone, or tablet. You shouldn’t need extra software or special equipment to get started. A good provider lets you log in through your internet browser, enter card details, and process payments without friction. If the platform requires complicated onboarding or pushes paid hardware right away, that’s usually a sign it’s not designed for small businesses that want flexibility.
Make sure it supports the way your business accepts payments
Some businesses only need to run one-time payments. Others rely on recurring billing, deposits or virtual terminal transactions that include both credit and debit cards. Check that the provider supports the payment types you use most. If you plan to accept credit, debit, or even digital wallets, confirm that these payment options are built into the virtual terminal credit card processing flow. The fewer workarounds you need, the better.
Confirm that the payment processor integrates with your existing tools
If you use invoicing software, a CRM, or a scheduling platform, your virtual credit card terminal should connect to it. When a virtual terminal can seamlessly integrate with your favorite industry software, the process becomes smoother for you and your clients. You avoid manual data entry, reduce mistakes, and keep your customer information consistent across systems.
Review the provider’s security and compliance standards
Payment security is the backbone of virtual terminals. You’ll be handling sensitive card data, including card number, billing address, and other customer details. Make sure the provider uses tokenization and encrypts card information from the moment you manually key it in. PCI compliance should be standard. If security feels like an afterthought or hard to find on the provider’s website, keep looking.
Check how the provider handles fees
Every payment processor charges something to run card payments. Some use flat rates, others use tiered pricing, and a few offer custom plans for merchants who process a lot of transactions. Review the fees for credit card processing, debit card payments, and any extra charges for virtual terminal use. Look at settlement times too. You want to know when you’ll actually get paid.
Make sure customer support is actually helpful
If a customer’s card doesn’t go through or you can’t access your account, you’ll want support that responds fast. Look for a provider with real people available by phone or chat. Read reviews to see how they handle downtime or payment issues. When you rely on a virtual terminal instead of in person payments, support becomes part of the product.
Look for features that fit how you work
Some providers offer powerful integrations, recurring transactions, saved payment details, or the ability to securely file customer information for future purchases. Others focus on simple, no-frills payment acceptance. Think about what will make your day-to-day life easier. Do you run sales from your laptop while traveling? Do you take orders by mail? Do you need a simple setup that lets staff accept payments from any device with an internet connection? These questions help filter out providers that aren’t built for your workflow.
Test the experience from your customer’s point of view
Even though a virtual terminal happens on your side, the experience still affects your customers. Look at the receipt format, the confirmation emails, and how refunds or voids are handled. A clean, reliable process builds trust and encourages repeat business. When a provider supports secure, smooth payments, everyone wins.
How is a 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. Here are the steps involved:
- 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.It also helps keep your chargeback fees low. What you need for this is similar to what customers would have to input when making an ecommerce 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
- Currency
- 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 professional 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 electronic receipts automatically sent 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?
The cost of 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?
Business 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.
