What are Virtual Credit Card Terminals?

N. Madison

A virtual credit card terminal is an alternative to a physical terminal for processing credit card payments. Unlike physical credit card terminals, virtual terminals process credit card information entered via a computer screen and a web-based form. The transaction is then sent over a web server without further input from the merchant. As with traditional credit card terminals, a virtual terminal can be used to process payments, secure authorizations, and issue credit card payment refunds. Virtual credit card terminals are typically used by business people who accept payments over the phone, by fax, or via email; some mail order companies, service businesses, or traveling businesses that do not have a need for a physical terminal may use them as well.

Credit card being swiped through a terminal.
Credit card being swiped through a terminal.

Virtual credit card terminals typically allow business people to handle credit card payments via the Internet instead of a physical credit card terminal. When a business opts for a virtual credit card terminal, transaction and billing information are transmitted over a secure Internet connection to the cardholder’s bank, and approvals or denials are transmitted back to the business owner. With virtual credit card terminals, a business can obtain authorizations for credit cards and process transactions. If he needs to issue a refund of a credit card payment, he can usually do that as well.

Credit card logos.
Credit card logos.

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When a businessperson uses a virtual credit card terminal, he must obtain some basic information from his customer. For example, he typically needs the cardholder’s full name as it appears on the card as well as his credit card numbers, billing address, and phone number. In order to secure authorizations and make transactions, a business owner typically needs to enter the expiration date for the credit card and the card verification value (CVV) number, which is found on the back of a credit card, as well. Often, businesses process debit cards via virtual credit card terminals as well.

Virtual credit card terminals are often the processing option of choice for businesses that process a good deal of their transactions by phone, via mail or email, or even by fax. These terminals may also prove helpful for businesses that may not always have access to landlines, which are often necessary for traditional processing. For example, traveling businesses such as flea markets and carnivals may use them, as they only need access to the Internet, such as through a computer or a personal digital assistant (PDA), to process payments.

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