Many businesses require flexible and efficient payment solutions to serve their customers better and address common industry challenges. Additionally, newer, more personalized businesses seek payment systems that are both flexible and user-friendly.
Virtual terminals provide a simplified payment processing experience without cumbersome hardware or complex setups. This blog will explore how a virtual payment terminal functions, its advantages, and why Payment Nerds is the ideal partner for implementing this cutting-edge solution.
A virtual terminal is a web or cloud-based tool that enables businesses to securely process credit card payments without a physical card reader. Merchants can manually input customer payment information through a secure online portal, making it a perfect solution for remote transactions or businesses without a physical storefront[1].
Virtual terminals are especially beneficial for businesses that take orders over the phone, through email, or via invoices. They provide a seamless connection between eCommerce and in-person payments and offer a flexible transaction management option.
The Difference Between a Virtual Terminal & a Payment Gateway
Virtual terminals and payment gateways play a role in online transactions but have distinct functions.
Virtual Terminals are mainly used for card-not-present (CNP) transactions, where customer information is entered manually. They are ideal for businesses seeking a flexible, hardware-free method for processing payments[2].
Payment Gateways work with eCommerce platforms to streamline online payment processing, typically when a customer makes a purchase through a website or mobile app. Payment processors often help businesses with accepting payments online[2].
Whether you need a virtual terminal, payment gateway, or other payment processing tools, Payment Nerds can help fulfill your business’s needs with our tailored payment solutions, advanced security, and seamless customer support services.
Benefits of Using a Virtual Payment Terminal
There are many reasons why business owners would want to implement a virtual payment terminal into their sales system. Here are a few:
Less Setup & Hardware Costs
Virtual terminals eliminate the necessity for expensive point-of-sale systems. You can start accepting payments immediately with just a computer or smartphone and an internet connection. This affordable entry point makes virtual terminals a fantastic option for startups and small businesses.
Accessibility Anywhere
One of the most significant benefits of virtual terminals is their accessibility. Whether you’re working from a home office, on the go, or running a pop-up shop, you can process payments from almost anywhere. This flexibility ensures you never miss an opportunity to make a sale.
Business-Enhancing Analytics & Reporting
Virtual terminals typically come with built-in reporting tools that offer insights into transaction history, customer preferences, and overall sales performance. With real-time analytics, businesses can make informed decisions to enhance their operations.
Better Customer Experiences
Customers appreciate convenience and speed at checkout, and virtual terminals provide just that. Businesses can also boost customer satisfaction by offering various payment methods. Standard features in virtual terminal systems, like emailed receipts and secure transactions, further contribute to a positive experience.
Secure Payment Details & Customer Information
Security is crucial in payment processing. Virtual terminal payment processing systems must adhere to PCI-DSS (Payment Card Industry Data Security Standards), ensuring that sensitive information is encrypted and safeguarded. This minimizes the risk of data breaches and builds trust with customers.
Backup Support for Fraud & Chargebacks
Payment processors like Payment Nerds offer strong fraud monitoring tools to reduce fraudulent purchases and effectively manage chargebacks. With features like address verification systems (AVS) and real-time transaction monitoring, virtual terminals provide multiple layers of protection.
To fully enjoy these benefits, get the right terminal hardware payment solutions from Payment Nerds, a reliable virtual payment processing provider.
Learn about our virtual terminal offerings and other merchant services by signing up with Payment Nerds today.
How to Accept Payments With a Virtual Terminal
Accepting payments with a virtual terminal is a simple and user-friendly process. Here’s a step-by-step guide to help you navigate the workflow and maximize the benefits of this powerful tool:
Step 1: Log in to Your Virtual Terminal Platform
Start by accessing your virtual terminal through a secure online portal provided by your payment processor. Most platforms only require a device with internet access and your login credentials. Enabling two-factor authentication (2FA) is recommended, as it adds an extra layer of security, ensuring your account remains protected.
Step 2: Enter the Customer’s Payment Details
Once you’re logged in, go to the payment input screen. Here, you will need to manually enter the customer’s payment details, including[3]:
- The cardholder’s name
- Credit or debit card number
- Card expiration date
- CVV security code (usually found on the back of the card)
- Billing address (if needed for additional security)
If the customer’s preferred payment method is ACH or bank transfer, you may enter the customer’s bank account and routing numbers instead. Other alternative payment methods, like digital wallets, may require slightly different payment details.
Step 3: Verify the Payment Amount and Details
Make sure to double-check all the information for accuracy before you process the transaction. Errors in data entry can lead to declined payments or unnecessary delays. Confirm the payment amount and any related details, such as taxes or discounts, to ensure they meet customers’ expectations.
Step 4: Submit the Payment for Processing
After verifying all the details, simply submit the payment details. The virtual terminal will encrypt the data and send it to the payment processor for authorization.
You will receive real-time notifications about the transaction status — whether it’s approved or declined. If it’s declined, you’ll typically get an error code or message explaining the reason, such as insufficient funds or an invalid card number.
Step 5: Generate and Send a Receipt
Once the payment is approved, the virtual terminal will create a receipt for the transaction. Most platforms let you customize this receipt with your business branding. You can then either email the receipt directly to the customer or print a copy for their records.
Step 6: Record the Transaction in Your System
Many virtual terminal platforms use accounting and customer relationship management (CRM) tools. These integrations can automatically log the transaction in your bookkeeping system. If your platform doesn’t support these integrations, you may need to manually record the payment for your records.
Examples of Merchants That Could Use Virtual Terminal Payments
Virtual terminals serve a diverse range of businesses. Here’s a quick list of examples:
- Freelancing: Writers, graphic designers, and consultants can accept payments remotely, making it easier for clients worldwide.
- Food & Beverage: Caterers and meal prep services can securely handle deposits and final payments over the phone or online.
- Beauty Salons: Stylists and beauticians can simplify bookings and deposits by accepting payments without needing in-person visits.
- Home Services: Plumbers, electricians, and cleaners can collect payments on-site or after completing their work.
- Automotive Repair: Mechanics can receive payments directly from customers when they call to authorize repairs.
- Retail Boutiques: Small retail shops can broaden their payment options to accommodate remote orders.
Businesses gain numerous advantages from processing transactions using a virtual terminal. From faster checkouts to enabling multi-channel payments for hybrid businesses, virtual terminals have helped transform the business landscape and can take companies like yours to new heights.
Conclusion
Virtual terminals are the future of payment processing. They enable companies of all sizes to accept payments from anywhere, improve customer experiences, and optimize operations.
At Payment Nerds, we work to provide innovative virtual terminals customized to meet your needs, among a variety of other payment solutions. Contact us today to discover how we can simplify your payment processing with a custom payment solution.
Source
- PSI Security Standards Council. “Virtual Payment Terminal.”https://www.pcisecuritystandards.org/glossary/virtual-payment-terminal/. Accessed January 15, 2025.
- Forbes. “Best Credit Card Processing Companies for 2025.”https://www.forbes.com/advisor/l/best-credit-card-processing-companies/. Accessed January 15, 2025.
- NerdWallet. “7 Best Virtual Terminals of January 2025.”https://www.nerdwallet.com/best/small-business/virtual-terminal#how_to_choose_a_virtual_terminal. Accessed January 15, 2025.