A virtual terminal is a software application (often a

web application A web application (or web app) is application software that is created with web technologies and runs via a web browser. Web applications emerged during the late 1990s and allowed for the server to dynamically build a response to the request, ...

) for

merchant A merchant is a person who trades in goods produced by other people, especially one who trades with foreign countries. Merchants have been known for as long as humans have engaged in trade and commerce. Merchants and merchant networks operated i ...

s which allows them to accept payment with a

payment card Payment cards are part of a payment system issued by financial institutions, such as a bank, to a customer that enables its owner (the cardholder) to access the funds in the customer's designated bank accounts, or through a credit account and ...

, specifically a credit card, without requiring the physical presence of the card (“card not present transaction”). They are called “virtual” terminals in contrast to the physical

payment terminal A payment terminal, also known as a point of sale (POS) terminal, credit card machine, card reader, PIN pad, EFTPOS terminal (or by the older term as PDQ terminal which stands for "Process Data Quickly"), is a device which interfaces with payme ...

s used to process card payments when the payment card is present.

Use of virtual terminals

When a customer wants to pay with a card over the phone, a virtual terminal allows the person accepting payment (such as a call center agent) to enter the customer's credit card details to process the payment. Unlike when using a regular payment terminal, the presence of the payment card is not required. The payment data is then automatically sent to the

payment processor A payment processor is a system that enables financial transactions, commonly employed by a merchant, to handle transactions with customers from various channels such as credit cards and debit cards or bank accounts. They are usually broken do ...

to handle the transaction. While the physical card does not need to be presented to the merchant (which would be impossible over the phone), the customer authorising the payment should still be possess the card. To verify this, the virtual terminal often requires the card security code to be entered, which the customer must provide. One alternative for merchants is to utilise a credit card vault, allowing repeat customers to avoid providing this information over the phone. Some processors offer their merchants the option to securely store their customers' card information in a credit card vault. Virtual POS facilitates MO/TO payments, also called Mail request/Phone request transactions. MO/TO are suitable for organizations whose customers are far away and therefore, are unable to present a credit or debit card physically. The process is also known as card non-present transaction and includes entering the customer's card details into the virtual terminal to handle the exchange.

References

{{reflist Payment cards