Virtual terminal: what is it and how can it help your business?

Accepting payments from anywhere at any time is crucial when looking to stay competitive. 

Whether you're running an ecommerce site, managing a service-based business, or handling B2B transactions, having a reliable and flexible payment solution is key. 

This is where virtual terminals come into play. 

Offering the convenience of processing payments without the need for a physical card reader, virtual terminals are an essential tool, regardless of your business size.

In this article, you’ll learn what virtual terminals are, how they work, and how they can benefit your business, especially if you’re looking to streamline operations and improve cash flow

• What is a virtual terminal?
• How does a virtual terminal work?
• What types of businesses use virtual terminals?
• What features does MONEI's virtual terminal offer?
• How much does MONEI’s virtual terminal cost?

What is a virtual terminal?

A virtual terminal is a software-based payment solution used to process credit and debit card payments without the need for a physical card reader. Unlike traditional point-of-sale (POS) systems, a virtual terminal (or virtual POS) operates through a web browser or a dedicated software application, making it a versatile option if you need to accept online payments. 

These terminals are especially useful if you have an ecommerce business, provide services online, or if you take orders over the phone and need a flexible payment solution to accommodate various transaction types. 

With a virtual terminal, you can accept payments from anywhere, at any time, without the need for specialized hardware. All that is required is an internet-connected device, such as a computer, tablet, or smartphone, and the necessary credentials to access the terminal.

How does a virtual terminal work?

Virtual terminals are a secure way to process card-not-present transactions thanks to data encryption and PCI-DSS compliance, ensuring that sensitive information is protected during the payment process. Here’s how it works: 

1. Access the virtual terminal. Log in to the virtual terminal through a secure web portal or a dedicated software application provided by your payment service provider (PSP).
2. Enter payment details. Enter the customer’s payment details, including the card number, expiration date, card verification code (CVC), and the amount to be charged. Additional information like the customer’s billing address, may also be required for verification purposes.
3. Authorize the payment. Then submit the transaction for processing to securely transmit the payment information to the acquiring bank, which then routes it to the card network (such as Visa, Mastercard, or American Express) for authorization.
4. Receive payment confirmation. If the payment is approved, you’ll receive an instant confirmation. The funds are typically deposited into your bank account within a few business days. At this point, you can issue a receipt to the customer via email. 
5. Transaction management. Most virtual terminals offer a dashboard where you can view and manage transactions, issue refunds, and generate reports. This functionality provides valuable insights into payment activity and helps with financial record-keeping.

What types of businesses use virtual terminals?

Virtual terminals are versatile payment solutions that cater to a wide range of businesses, especially those that need to process payments remotely or without a physical point-of-sale system.

1. ecommerce and online retailers. Most online retailers use integrated payment gateways on their websites, but some also use virtual terminals to process phone orders or handle payments when their primary system is down. This offers flexibility if you need a backup payment solution or want to accommodate customers who prefer to pay over the phone.
2. Service providers. Service based businesses, such as consulting, freelancing, or home repair, often use use a virtual POS to accept payments remotely. Whether it’s to collect payments after completing a job or to set up recurring billing for ongoing services, you can manage transactions without the need for in-person payments.
3. Nonprofit organizations. Charities and nonprofit organizations frequently use virtual terminals to accept donations quickly and securely from anywhere to raise funds efficiently.
4. Healthcare providers. Medical practices, dental offices, and other healthcare providers use these terminals to process payments for appointments, treatments, and other services. Patients can pay their bills over the phone or online, making it easier to manage payments and reduce the need for in-office transactions.
5. Travel and hospitality. Travel agencies, hotels, restaurants, and event planners use virtual terminals to process payments for bookings, reservations, and deposits. This is particularly useful for handling payments over the phone or through email, where customers might be finalizing travel plans or securing event services remotely.
6. Subscription-based businesses. Companies that offer subscription services, such as magazines, streaming platforms, or membership organizations, use virtual terminals to manage recurring payments. You can automate billing cycles and ensure consistent revenue without requiring customers to manually process payments each time.
7. B2B sales. Businesses that sell products or services to other businesses often use virtual terminals to handle large orders or customized transactions. B2B sales can involve complex payment arrangements, and a virtual terminal offers the flexibility to process payments according to the specific terms agreed upon with clients.

📚Further reading: 

• What is a Payment Gateway? (+ Compare Options)
• What’s the Difference Between a Payment Gateway and Virtual POS?

What features does MONEI's virtual terminal offer?

MONEI’s virtual terminal is designed to help meet your diverse payment needs. Here are some of the key features offered by MONEI’s virtual terminal:

1. Multi-channel payment acceptance. Accept payments across multiple channels, including over the phone, via email, through mail orders, or via your ecommerce website.
2. Easy ecommerce integration. Integrate with all the most popular ecommerce platforms to add more alternative and local payment methods to your checkout.
3. Accept more payment methods. Accept all major and alternative payment methods from a single platform including credit and debit cards, digital wallets, bank transfers, and local options like Bizum. 
4. Secure payment processing. Security is a top priority for MONEI. We use tokenization technology, advanced encryption, and comply with PCI-DSS standards, ensuring that all payment data is handled securely. This protection reduces the risk of fraud and enhances customer trust.
5. Comprehensive transaction management. With a centralized dashboard, you can manage all your transactions in one place. Stay organized and on top of your financial records by viewing transaction history, issuing refunds, and generating detailed reports all from one place. 
6. Customizable receipts. Personalize your payment receipts with your logo and company name to enhance the customer experience and reinforces brand identity.
7. Multi-currency support. If you’re operating in international markets or need to accept cross-border payments, you can use MONEI to accept transactions in various currencies.
8. Recurring payments. Streamline billing for recurring payments and let customers pay via their preferred payment methods including credit card, Apple Pay, Google Pay, and Click to Pay.
9. Email paymet links. Send unique payment links to customers to process transactions with or without a website using Pay By Link.

How much does MONEI’s virtual terminal cost?

The cost of using a virtual terminal varies depending on the payment service provider (PSP) and the specific features offered. MONEI’s virtual terminal offers dynamic pricing options depending on sales volume. So as you sell more, you’ll save more money that you can reinvest in growing your business. You can add additional seats for a small daily fee and regardless of the plan you choose, you can accept all the payment methods supported by MONEI and track your sales from a robust user dashboard.

Alexis Damen

Alexis Damen is a former Shopify merchant turned content marketer. Here, she breaks down complex topics about payments, e-commerce, and retail to help you succeed (with MONEI as your payments partner, of course).