Simplifying Transactions with Virtual Terminals

Aug 1, 2023 by Kelsey Banerjee

Are virtual terminals significantly better than other payment processing systems? For most merchants, yes. It's an efficient, flexible, and organized way for a business owner to process and monitor payment details. And when looking for a payment solution, these factors are critical.

The end goal of any payment processing system is to offer a convenient way to transfer economic value securely. This is a crucial step in any business, as customers must trust the system to buy services or products. And companies don't just need to build trust with their customers but also with business and tax authorities. The detailed records of virtual terminal transactions facilitate relationship-building behind the scenes. And make filing and reviewing processing issues easy for the merchant.

In other words, Virtual Terminals provide better overall value than traditional Point of Sale (POS) systems. They are easier to use and understand and involve easy setup while maintaining flexibility and providing better value for merchants and customers.


Virtual Terminals in a Nutshell

A Virtual Terminal is an online payment platform to process and facilitate electronic payments. It facilitates Card Not Present (CNP) transactions, allowing merchants to enter payment card details without physically examining the debit or credit card. Depending on your solution, you can also accept ACH or digital payments. As a remote payment tool, virtual terminal transactions don't need the buyer and seller to be physically present to make the payment. This gives both the merchant and the customer flexibility and convenience.

Virtual Terminals are a cost-effective and less resource-intensive alternative than traditional POS terminals. Business owners now have a convenient method for processing transactions while delivering an easy user experience for customers. In addition, this solution streamlines the Customer Support experience, as the Support Team can view and filter payment details from an organized dashboard.

Virtual Terminals aren't the future of transactions anymore--they are already here. And they are more affordable than ever.


How does it work?

A Virtual Terminal works similarly to a physical Point of Sale (POS) framework.

These systems usually accept Automated Clearing House (ACH) translations and credit or debit card payments. Merchants use the virtual terminal to enter transaction details using the data provided by the customer, eliminating the need to swipe a card and enter a PIN or to enter card details online. With many virtual terminals, the customer shares their card details via phone or the web without additional processing from the merchant.


Virtual Terminals vs. Payment Gateways

An Online Payment Gateway is a link between the customer and the merchant. An online transaction begins with the customer entering card details on a payment portal. The system encrypts the entered card details to ensure they stay in the right hands. This encrypted data is then forwarded to the gateway. The Payment Gateway sends this data to the bank to verify and authorize the transaction. The credit card network then authorizes and processes the transaction.

Virtual Terminals are very similar to Payment Gateways -- with only a few key differences:

  • They don't require extra hardware or programming, such as a physical terminal.
  • The merchant involved in the transaction handles most of the work, with the customer passing on payment details to the merchant via phone.
  • The merchant logs onto the Virtual Terminal to enter card details to process the payment.
  • The Virtual Terminal then contacts the credit card network to authorize the payment.

In short, virtual terminals are used primarily by the merchant. The customer uses Payment gateways, such as for an eCommerce online payment.

A key benefit is that transactions via Virtual Terminal could be handled without needing an Electronic Funds Transfer at Point Of Sale (EFTOPS) machine.

While Payment Gateways are used in eCommerce or other customer-facing scenarios, Virtual Terminals are generally used by merchants.


How to use a Virtual Terminal?

Processing payments with a virtual terminal is fairly straightforward:

  • Log onto the Virtual Terminal Dashboard
  • Enter the customer's credit card details in the required fields
  • Wait for the Virtual Terminal contacts the Credit Card Network to authorize the transaction
  • Get notified about the approval of the transaction, usually within seconds
  • Receive the details of the transaction
  • Get the payout, usually within 1-3 days.


Why Use This Payment System: Features and Benefits

The advantages of using virtual terminals are many:

  • Businesses can use them in addition to their current payment infrastructure. Smaller businesses with a low volume of transactions can also use virtual terminals, as it isn't resource intensive and needs no new equipment.
  • The payment process is instantaneous, easy to use, and directly made from the browser. The Virtual Terminal dashboard tends to be simple and intuitive, so the cashier handling the transaction doesn't need advanced computer skills.
  • Unlike physical terminals, Virtual Terminals do not need additional hardware components. This allows any business to embrace the benefits without worrying about the setup cost.
  • Recurring billing can be scheduled and accessed from the secure dashboard, which contains a history of previous transaction details. As a result, business owners or their AR teams can better follow up on processed and pending payments.
  • The customer doesn't need to be there physically. Payment details are exchanged over the phone, from partner agreements, or existing contracts.
  • Virtual Terminals ease the payment process for sales through mail orders, telephone orders, and off-site sales events.


Selecting Your Solution

There are three main considerations when choosing your Virtual Terminal system:

  • How easy is it for you to use?
  • How well does it integrate into current systems, like your physical terminal or ERP?
  • How secure is it?

The Virtual Terminal built into the Paystand platform seamlessly integrates with others. As a result, you generally have two options to view payments. You can use your ERP or accounting software. Or you can use Paystand's intuitive dashboard. We charge nothing for this integration, but other processors charge for this service.

Furthermore, Paystand uses blockchain technology and tokenization to protect sensitive data. What makes these technologies unique? Here's the gist:

Once a transaction is added to the blockchain, it can't be altered. A new transaction or record must be submitted to make any modification. As a result, this process is incredibly secure and auditable. Not only does blockchain technology bar external bad actors from changing records, but it makes internal fraud significantly more difficult to pull off. One of the top reasons businesses are adopting blockchain technology is to leverage its security mechanisms.

Then there's tokenization. This is a process similar to encryption. But while encryption scrambles the data, tokenization replaces sensitive data with a token. And only that token can retrieve the original information.

What else should you look for besides usability, adaptability, and security?


Next Steps

Virtual Terminals allow merchants to process transactions easily when the client can't be physically present. It's cost-effective, convenient, and secure. As a result, they are a very attractive proposition for merchants who operate via mail and telephone orders. The technology behind the Virtual Terminal is robust and thoroughly tested, supplying enterprise-grade security and speed.

But where can you go from here?

If you're in the market for a payments solution, why not check out what makes the Paystand Virtual Terminal one of the best platforms for B2B payments?