A virtual terminal is a secure payment processing tool that allows businesses to manually key in credit card information and process transactions. Unlike a physical point-of-sale (POS) system, virtual terminal transactions take place within a payment gateway that may include end-to-end encryption and other security features to help protect customer data within the payments system and during transaction transmission. Additionally, a virtual terminal may enable tokenization technology to replace a customer’s personal account number (PAN) with an encrypted ID known as a token, which helps reduce PCI scope and liability.
Virtual terminals are often used by mail-order or telemarketing businesses, and small or non-ecommerce businesses that offer services over the phone or through email or post. Additionally, some professional services businesses that work with customers outside of their offices — such as doctors’ or accountants’ offices, dance or flight schools, or legal firms — may also benefit from a virtual terminal to easily accept credit cards for payments over the phone or through mailed invoices.
After a customer inputs their payment information into the virtual terminal, the payment gateway will then send this information to the acquiring bank for verification. Depending on the customer’s bank, they may then approve or decline the request. Once the payment is approved, the virtual terminal will return a status to the customer’s card. If they’ve set up recurring payments, the virtual terminal will then automatically bill the customer on a weekly, monthly, or annual basis, simplifying cash flow for the business and providing convenience and flexibility to customers. virtual terminal payment gateway