What is a Virtual Terminal? Our Comprehensive Guide

What is a Virtual Terminal? Our Comprehensive Guide

The old phrase “cash is king” is uttered less often these days as coins and notes are increasingly replaced by plastic and digital payment methods. As a business owner, it’s vital to be able to accept payments in any and every form that your customers might prefer, whether it’s in person, online or over the phone.

If you’re unable to take card payments over the phone, you risk not only losing individual sales; you give the impression that your business isn’t properly equipped for contemporary commerce. The solution is a simple one – get a virtual terminal, which is a system enabling you to process card payments online, instantly, while talking to your customers over the phone.

What is a Virtual Terminal?

A virtual terminal is a credit card processing system that requires no equipment other than a computer or mobile device with an Internet connection. After setting up an account with a merchant services provider (such as Square) you use your account name and password to log in to your online account whenever you need to process a credit or debit card payment.

While you have your customer on the phone, log in, enter the customer’s name, card number, expiration date, CVV/CVV2 number and ppostcode and click “submit”. You might have the option to add other information as well, such as an invoice number and email address. Upon submitting the payment, you get instant confirmation that it was accepted (or declined) along with a printable receipt.

Some virtual terminals, including SumUp, allow for card payments via SMS. You enter the customer’s mobile number into your account, along with the amount to be charged. The customer receives a secure payment link via SMS, into which they enter their card details and submit the payment.

Funds are transferred into your linked bank account, generally within a day or two. If you’re using PayPal‘s virtual terminal, the money is transferred to your PayPal account instantly.
Virtual terminals also allow you to store card information for repeat customers. This means you can charge their card at any authorised time without having to ask for the card number again.

What are the benefits of a virtual terminal?

Whether a virtual terminal is your only method for accepting card payments or an additional option along with POS (point of sale) devices and/or a payment gateway (for online transactions), it has numerous benefits for both customer and business owner. These include:

No new devices: Virtual terminals require only a web browser and Internet connection, so you don’t need to get, or pay for, any new hardware or software. If you have an existing POS system or payment gateway, a virtual terminal should be compatible with those, meaning you can give your customers a full range of payment acceptance options.

Take payments anywhere: With a virtual terminal ,you can process card payments wherever you are, as long as you have a safe Internet connection. This means you and any employees with access to the virtual terminal don’t need to be tied to the shop or office.

Quick and easy setup: Signing up for a virtual terminal is generally quick and easy, requiring you to fill out a few forms online and/or talk to a merchant service provider over the phone. You should, however, spend some time comparing the fees and rates to ensure you’re getting the best deal.

Streamlined records: Virtual terminals generate a receipt and digital record of every transaction the second it’s processed, which makes record-keeping easy. You can access real-time reports at any time for bookkeeping and analytics.

Are virtual terminals safe?

Virtual terminals are set up to be a safe way to accept credit and debit cards, presenting a low risk to both customer and business owner. Of course, they require common sense security measures, such as only allowing trusted employees access to the terminal, keeping the account password secure, only using safe Internet connections and never storing customers’ card data outside the terminal.

Merchant services providers do consider virtual terminals slightly less safe than EPOS systems, such as chip-and-PIN terminals, because you’re not face to face with the customer nor their card. Because of this, providers usually charge slightly higher processing fees for virtual terminal users than POS users. Those fees go towards built-in fraud protection measures, such as instantly verifying the address and card information entered.

As part of a virtual terminal setup process (and once a year thereafter) you will be required to complete a PCI compliance questionnaire, either online or over the phone. This is a series of questions about your business’s security systems and practises concerning card processing and the handling of customers’ confidential data. The PCI compliance requirement ensures that your virtual terminal is as secure as possible.

Be aware of your merchant services provider’s systems for handling charge-back disputes. They should always work with you to handle such disputes properly and protect you and your customers against fraud.

How can I get a virtual terminal for my business?

If you already have a merchant services account, call your provider and ask about their virtual terminals. Otherwise, shop around to find a provider and system you think will work best for your business. Consider rates (monthly, flat-rate for every charge, or both?), ease of use, system features and customer service options.

Virtual Terminal Comparison


When you’re ready to sign up, call or go online or call and follow the steps required. Be sure to have all your business information, including your bank account details, at the ready. Most business owners can get their virtual terminal up and running within 24 hours.

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