A virtual terminal is a software application (often a

web application A web application (or web app) is application software that is accessed using a web browser. Web applications are delivered on the World Wide Web to users with an active network connection. History In earlier computing models like client-serve ...

) for

merchant A merchant is a person who trades in commodities produced by other people, especially one who trades with foreign countries. Historically, a merchant is anyone who is involved in business or trade. Merchants have operated for as long as indust ...

s which allows them to accept payment with a

payment card Payment cards are part of a payment system issued by financial institutions, such as a bank, to a customer that enables its owner (the cardholder) to access the funds in the customer's designated bank accounts, or through a credit account and ma ...

, specifically a

credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...

, without requiring the physical presence of the card (“card not present transaction”). They are called “virtual” terminals in contrast to the physical

payment terminal A payment terminal, also known as a point of sale (POS) terminal, credit card terminal, EFTPOS terminal (or by the older term as PDQ terminal which stands for "Process Data Quickly"), is a device which interfaces with payment cards to make electro ...

s used to process card payments when the payment card is present.

Use of virtual terminals

When a customer wants to pay with a card over the phone, a virtual terminal allows the person accepting payment (such as a call center agent) to enter the customer's credit card details to take a payment. Unlike when accepting payment with a regular payment terminal, the presence of the payment card is not required. The payment data is then automatically sent to the

payment processor A payment processor is a system that enables financial transactions, commonly employed by a merchant, to handle transactions with customers from various channels such as credit cards and debit cards or bank accounts. They are usually broken dow ...

to handle the payment. While the physical card need not be presented to the merchant (which would be impossible over the phone), the customer authorising the payment should still be in possession of the card. To verify this, the virtual terminal will often require the card security code to be entered, which the customer must supply. One alternative for merchants to having a repeat customer supply this information over the phone is to utilise a credit card vault. Some processors offer their merchants the use of a credit card vault to securely store their customers' card information. Furthermore, Virtual POS allows for MO/TO payments, also called Mail request/Phone request transactions. MO/TO are suitable for organizations whose customers are far away and therefore, are unable to present a credit or debit card physically. The process is also known as card non-present transaction and includes entering the customer's card details into the virtual terminal to handle the exchange.

Some Companies offering virtual terminal services

PayPal PayPal Holdings, Inc. is an American multinational financial technology company operating an online payments system in the majority of countries that support online money transfers, and serves as an electronic alternative to traditional paper ...

* myPOS *

Block,_Inc. Block, Inc. (formerly Square, Inc.) is an American multinational technology conglomerate founded in 2009 by Jack Dorsey and Jim McKelvey and launched its first platform in 2010. It has been traded as a public company on the New York Stock Exch ...

* SumUp * Worldpay * Paytia

References

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