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Is a virtual terminal right for your business?

You might have heard of a virtual terminal. Now see if you need one.

Customers love convenience these days. In fact, they expect to be able to order more and more products and services remotely for delivery or in-store pick up, and they expect to be able to pay whenever and wherever they’re ready. This means small businesses need a way to accept card payments without customers being present and when card readers are not available. The solution? A virtual terminal.

What is a virtual terminal?

Virtual terminals offers a way to accept payments through a web portal, which is essentially a private, password-protected webpage. Businesses can hand-key card payments from any Internet-connected device.

What are the key benefits? Virtual terminals have minimal setup, need almost no maintenance and usually come standard with point-of-sale hardware or a payment gateway (which is used to process eCommerce payments). They also allow you to take payment from customers who are not physically at a place of business or when you do not have a card reader present.

One huge downside of virtual terminals is that card numbers must be keyed in manually. This is more prone to human error than a normal swiped, dipped or tapped card payment, and it can make it nearly impossible for businesses to verify the identity of the cardholder to prevent fraudulent transactions. Fraudulent transactions can expose businesses to greater risk of chargebacks, which can eat into profits.  Because the risk is significantly higher, hand-keyed, or card not present (CNP), transactions typically have higher processing and interchange fees, which can eat into profits.

When using a virtual terminal, you must be careful to not store or write down customer card numbers anywhere at the risk of compromising card security. Employees must enter the numbers into the designated form field to ensure the numbers are encrypted and tokenized like any other eCommerce payment gateway or payment processing system.

Some merchant service providers may charge a fee to access a virtual terminal, while others will offer access for free. Be sure to ask before signing up for service.

Which type of businesses benefit from a virtual terminal?

Almost every small business that typically processes via swiping, dipping or tapping may need to take payment over the phone once in a while. If they already have a credit card processor, chances are there is a virtual terminal somewhere on the dashboard with which they can manually enter credit card details through a web-based form.

Catalog retailers
For small businesses that receive the majority of their orders by mail, email or telephone, a virtual terminal may be a smart option. Instead of invoicing customers and waiting for payments, the virtual terminal can help speed up cash flow by accepting card payments as orders are placed.
On-site service providers
Companies with roving representatives, like home repair workers or sales agents, may use a virtual terminal to take card payments on-site. In this case, a virtual terminal must be combined with an Internet-enabled tablet or laptop, which would allow on-site employees to log into the web portal and input customer card data wherever they happen to be working.
While the majority of restaurants payments are typically accepted in-store through point-of-sale equipment, a virtual terminal may allow business owners to accept payment for phone-in orders. This can facilitate a small delivery, catering or pick-up service.
Brick-and-mortar stores
A brick-and-mortar retailer can benefit from using a virtual terminals to accept occasional telephone orders. For instance, if a customer browses in-store, leaves, and then decides they want to purchase a product without driving back to the store, they can place their order over the phone. Virtual terminal can also act as a backup in case of point-of-sale equipment failure.
eCommerce businesses
In most cases, any business with a website that enables customers to place orders and pay online will not typically need a virtual terminal. They already have an established way to accept payments from customers that are not physically present at their place of business. But a virtual terminal will allow an eCommerce business to take orders in-person or over the phone, should the need arise.

Depending on the type of business you run, a virtual terminal may be a valuable tool for making sales. When you have payment processing through Bank of America Merchant Services, whether with POS equipment or an eCommerce gateway, you have access to a virtual terminal, which helps ensure you can accept card payments whenever, wherever your customers are ready to pay.

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