A virtual terminal payment gateway is used by businesses that sell products or services to customers remotely and without a physical card reader. This includes online retailers, mail order/telephone order (MOTO) businesses, and service-based industries like home repair, landscapers, or freelancers who work from their homes. Virtual terminals also provide a convenient and secure way for customers to pay off an invoice or purchase goods over the phone.
How Does It Work?
When a customer pays using a virtual terminal, the business employee must manually enter their payment information into the system. This typically involves entering the credit or debit card number and expiration date, plus other transaction details. Some virtual terminals allow for the scanning of a physical card with a USB or other device-mounted card reader for faster data entry. Upon submission, the transaction is sent to your payment processor for authorization. The processor communicates with the card-issuing bank to verify that the card is valid and in good standing, and then processes the payment as approved or declined.
Once the transaction is complete, the virtual terminal generates a digital receipt that can be sent to the customer via email or text. The receipt can include transaction details, payment amounts, and the merchant’s contact information.
Some virtual terminals offer the ability to set up recurring payments for customers, which can increase cash flow and improve customer retention. This feature is often a must for subscription-based services and software-as-a-service companies, who need to automate the billing process and ensure that their customers are always receiving the best value. virtual terminal payment gateway