Virtual terminals explained - heartland register and terminal on a counter

Virtual terminals explained

Thursday, November 27, 2014

As businesses transform and integrate new technology solutions, a virtual terminal has become a more popular payment processing solution choice. Point of sale (POS) systems include virtual terminals where payments can be processed without a credit card or debit card present. Virtual terminals are creating quick, seamless, and secure transactions for the benefit of customers and business owners alike.

There are three important factors to consider when considering the best virtual terminal processing option for your business.

  • The unique needs of your business
  • The priorities that are important for you to offer customers 
  • What would be helpful for you as a business 

What is a virtual terminal? 

A credit card virtual terminal utilizes payment gateway and merchant account technology to expedite transactions without a physical card payment. Virtual terminals are critical for online or ecommerce transactions in that credit card information can be accessed with merchant keys for automatic approval for payment.


Your business will need a merchant account and an existing payment processor to start processing with a virtual terminal. The merchant account indicates where business funds should go during a transaction, while the payment processor enables the overall process of payment transactions.
The best virtual terminals require no hardware, can be completed through a web browser (operating as a web-based payment platform), and accept all major debit or credit cards for credit card payments. Essentially, your computer or device acts as a payment processor as long as you have access to a merchant account, internet connection, and web browser. Orders can be completed online, or as an alternative, can be accepted over the phone. Once orders are completed, the cardholder and business owner receive digital confirmation that the card transaction went through and the order is processed and ready for fulfillment. 

Are virtual terminals secure? 

Whether included in a POS system or payment gateway, virtual terminals offer several security features to protect bank account information and customers' card information. 

One layer of security is tokenization. Bank account numbers are stored and, during the transaction process, are given a randomized number series. This way, the identifying information is kept private. Additionally, virtual terminals, especially online payments, may require other security measures when credit card numbers are needed. This could include password information or personal information to ensure the user is the identified customer. Business owners should train employees on strategies to verify cardholder information and the identity of the customer. 

Pros and cons of virtual terminal credit card processing

The pros of integrating a virtual terminal and virtual terminal credit card processing at your business include:

  • No set-up requirements. As a web-based payment gateway, your business is not required to purchase additional hardware. Without this requirement, payment solutions become easier to adopt at your business without the hassle of installing physical hardware. 
  • Options for recurring payments. For businesses that desire recurring billing options for their services, such as monthly fees for products and other types of services, virtual terminals allow for this level of customization for payment. Refunds can also be more easily issued through data tracking with virtual terminals.
  • Quick check-out. From start to finish, the integration of transactions with merchant services enables the completion of transactions very quickly. Small businesses can market their process as smooth and seamless, which is desirable for many consumers and customers in this modern age. 
  • PCI compliance. Many virtual terminals offered to businesses meet the standards and compliance requirements of the Payment Card Industry (PCI) data security standard. 

The cons of integrating a virtual terminal and virtual terminal credit card processing at your business include:

  • Manual input. Instead of using a card reader, employees may need to input credit card information manually when taking orders over the phone. This can result in more time needed for present transactions. When you require employees to manually input sensitive data and cardholder information, you should integrate training practices that promote the protection of this information, particularly when financial information is exchanged over the phone. 
  • Processing fees. Card not present fees tend to be higher for businesses to cover when using a virtual terminal. Transaction fees, interchange rates, and overall pricing for virtual terminals should be considered when adopting this payment processing method at your large or small business. Different virtual terminals offer different payment packages, including a percentage processing fee or a monthly fee. Small business owners will need to consider their business needs and what an average business day looks like for a larger understanding of virtual terminal options. The overall cost for using a virtual terminal at your business will depend on how many transactions your business makes.

Ready to get a virtual terminal integrated into your business? 

Heartland helps nearly 1,000,000 entrepreneurs make and move money, manage employees and engage customers with human-centered technology solutions that allow them to rise above the daily grind and lead their businesses into a brighter future. Learn more at