Credit Card Processing

Virtual Terminals for Credit Card Processing

by Ben Dwyer

Businesses that accept payments over the phone, by fax, or through mail orders can securely take credit cards using a virtual terminal, or a web-based portal using any computer with an internet connection.

What is a virtual terminal for credit card processing?

A virtual terminal is a method of accepting credit and debit card payments using your computer. Businesses enter the card details on behalf of a customer into a secure online form. You can manually enter (key) card info or swipe it with an optional card swiper.

Virtual terminals are internet-based, meaning there’s no software to download, and the terminal can be accessed from any internet-connected computer. With a virtual terminal, you can log in to your account to process payments and view reports from the terminal “dashboard” or menu.

Virtual terminals are frequently used in one location, such as a home office, but they can be used in different locations. For example, a virtual terminal that is usually used at the office could be brought on the road for a tradeshow.

What’s the difference between a virtual terminal and a payment gateway?

A virtual terminal allows you as the business to enter payment details to process a transaction on behalf of a customer. A payment gateway functions as the “equipment” for processing a card. You can think of it as the credit card machine of electronic card payments. After you enter information about a transaction into the virtual terminal, your processor handles the rest.

Additionally, while virtual terminals are used by the business, a payment gateway can be used by a customer, allowing them to enter payment details themselves. Payment gateways are used on e-commerce shopping websites when a customer pays for items they have put into an online shopping cart.

You can use a payment gateway without a virtual terminal, but you cannot use a virtual terminal without a payment gateway.

What payment types can I accept?

Specific payment types may vary by processor, but most virtual terminals can accept major credit and debit cards (such as Visa, Mastercard, Discover, and American Express) and some can accept additional forms of payment, such as PayPal or electronic checks. Some payment gateways may also support recurring billing for easy processing of scheduled payments. Additionally, many virtual terminals will allow you to process refunds or returns.

What type of businesses could benefit from a virtual terminal?

There are a number of businesses that could benefit from using a virtual terminal for card processing. The most common are businesses that want to accept credit or debit card payments for goods or services purchased by phone, mail, or fax such as catalogue-based businesses, telemarketing businesses, or small businesses that don’t sell through their website.

Additionally, businesses that need to accept payments on-the-go but prefer to use a computer instead of a mobile device could benefit from a virtual terminal. Examples include artists, flea market or craft fair sellers, and businesses who attend tradeshows.

Businesses that take credit cards in office or classroom settings (such as doctor’s offices, dance schools, flight schools, etc.) may also prefer a virtual terminal.

Virtual terminals usually offer the ability to create and view reports for a number of different factors regarding your card transactions. Specific reporting abilities vary by processor/virtual terminal, but may include options such as individual transaction report details, refund reports, sales reports by date or card type, and more.

Are virtual terminals secure?

Yes. Since virtual terminals require processing through a payment gateway, they benefit from security associated with payment gateways. Available security measures may include encryption, to scramble sensitive information so that it can’t be used without decoding it, address verification services, tokenization, card verification value (CVV) and more.

However, all payment methods are subject to breaches, and it’s important to take advantage of security options available.


The only equipment needed for a virtual terminal is an internet-connected computer.  However, virtual terminals are compatible with optional accessories that you can connect. Accessories include card readers and printers.

With an optional card reader, you’ll have the ability to swipe a customer’s card instead of hand-keying it. This option is ideal for businesses who take cards in person, but process them using their existing computer instead of a credit card machine or point-of-sale terminal. Most virtual terminal card readers plug into a USB port, but some are also Bluetooth compatible.

Now that EMV chip cards are becoming standard in the United States, you may find that you need to upgrade to EMV capable card readers. Check out our article Taking EMV Chip Cards with a Smartphone or Virtual Terminal for more information.

Receipt or standard printers may also be compatible with virtual terminals. That allows you to easily print a receipt for a customer, or to print reports.


Costs for virtual terminals vary greatly, depending on your processor and their pricing model. Virtual terminals may have a monthly charge, a per-transaction fee, a percentage markup, or other costs. Some companies will offer a free virtual terminal as part of a package when you pay for a payment gateway. Be sure to carefully review quotes and fees from your processor.

Keep in mind that if you’re entering payment details for a card-not-present transaction with your virtual terminal, you may have higher costs with your processor than for card-present transactions. Any transaction for which you don’t swipe a card will be considered “card-not-present” even if the customer’s card is physically at your location.

Be sure to talk with your processor about how you will be accepting payments and that you’re abiding by the terms of your processing agreement.

How do I get a virtual terminal?

If you are already processing credit cards and need to add a virtual terminal, you can contact your existing credit card processor to ask if they have a virtual terminal option. They will be able to set you up with your gateway and virtual terminal and advise on any costs associated with the setup and use of the terminal.

If you don’t currently process credit cards, you’ll need to find a credit card processor. Many credit card processors offer virtual terminals. If you need help finding a processor, you can sign up for free at CardFellow to get quotes from processors using our processor comparison shopping tools.

Leave a Comment

Your email address will not be published. Required fields are marked *

Credit Card Processing exposed

Use the secrets that credit card processors don't want
you to know to drastically lower your credit card
processing fees.

Read Now!

You might also like…

View all articles..