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What is a Virtual Terminal for processing debit & credit cards?


What is a Virtual Terminal for processing debit & credit cards?

In response to the changing climate, businesses are offering more ways to pay, from face-to-face and online payments to accepting payments over the phone.

A virtual terminal is a secure web page accessible via an online portal which allows you to accept credit and debit card payments in the same way as a physical credit card machine but using virtual software.

Essentially, virtual terminals make it easier for a business to accept payments when customers aren’t present. Accepting payments virtually, over the phone or by link, gives you a simple and secure way to keep your business moving and complete payments with ease.

Designed for businesses who want to accept quick and easy, low-to-medium value, low volume payments such as sole traders, fast-food restaurants, independent retailers, pharmacies and small businesses.

How do Virtual Terminals work

Virtual terminals work in a very similar way to a physical card machine but instead use non-physical software applications. 

With a physical card machine, your customer taps or inserts their card and enters their PIN number to verify the payment. The transaction is then automatically processed.

Conversely, with a virtual terminal, you:

  • Login to your payment providers virtual terminal.

  • Enter the customer’s card details prompted by the form on the secure web page (you can do this whilst they’re on the phone).

  • Click submit and process your order.

As long as you are connected to the internet you can access your virtual terminal from any device such as a computer, laptop, tablet or phone. Other people (members of staff) can also have access and there are different levels of authority. 

For peace of mind, virtual terminal technology processes these payments with the latest financial security mechanisms in place and all data is processed through PCI Compliant procedures. Ensuring your customers’ sensitive information is always safe.

For further information and advice on how to accept payments over the phone using a virtual terminal read our guide here

Advantages of using virtual terminals

There are many advantages of using a virtual terminal, including: 

1. Take faster payments
The virtual terminal allows you to process card payments there and then no matter where you are. They allow you to log on from any device that has access to the internet and also provide multiple logins to allow your staff to be able to take payments as well. 

2. Reach new customers
Not only will this be beneficial to existing customers, virtual terminals will allow you to reach new shoppers by offering more convenient ways to pay. So if you are running an advert or promoting your business on social channels it can help you to reach out to customers, no matter where they are in the world. 

3. Safe and secure transactions
Virtual terminals use AVS security (Address Verification System) to check that the customer using the debit or credit card actually owns it. Essentially, it asks the customer to provide their billing address details and matches that to what is stored with the cardholders’ bank. As long as they match, the payment will be approved and processed. This all helps to protect your customers against card payment fraud, as it checks that the customer is who they say they are. Virtual terminals also use the latest PCI DSS security to ensure payments are secure. PCI compliance is a security standard that makes sure that your business has the correct controls in place when you take card payments, therefore protecting both you and your customers. 

4. Run smarter payment processes
A virtual terminal takes the stress away from queues forming inside your shop as you provide alternative ways to pay aside from paying in store via a physical card machine. A virtual terminal gives you the flexibility to take payments the way you want.

Challenges of using virtual terminals

Despite the list of advantages outlines above of using a virtual terminal there are however a few challenges a business may face accepting payments this way, including: 

  • Increased risk of fraud 
    A virtual terminal is a little more of a risk when it comes to fraud and processing transactions compared to debit or credit card payments made with the actual card. If someone’s paying on a physical terminal, the customer has to enter their personal PIN. On a virtual terminal, anyone could have found the customer’s card payment details and used them to make a purchase. This unfortunately increases your chances of being issued chargebacks – meaning funds are taken right back out of your bank account.

  • More effort
    In store, customers can easily make an impulse purchase by simply tapping their contactless card, or smartphone, at the point of sale. However, payments are a little more timely when using virtual terminals payments as your customer may hunt for their wallet while on the phone or to find the right card and then remember their security questions etc. This also means there’s more time for them to change their mind!

  • Higher fees 
    Payments made using a virtual terminal will usually attract slightly higher fees as will it cost more to process. 

Getting started with a virtual terminal

A virtual terminal is essential if you want to open up your business to the rest of the world. They allow you to accept payments from customers, no matter where they are.

If you operate a bricks and mortar store, such as a restaurant, you might not need a virtual terminal but for the vast majority of businesses the more payment options you give your customers the better! 

At Opayo, we can help you set up a virtual terminal that allows you to improve your cash flow and keep your business moving when you aren’t able to accept payments face to face or in store. 

For more information, please visit our virtual terminal page or call us now on 0800 084 1480.