What is a Virtual Terminal? Definition, Pro's and Con's.
A Virtual Terminal, simply put, is web based portal, designed to allow a business to process MOTO (mail order/telephone payments.)
It is called 'virtual' because it functions like a credit card terminal, via a software application rather than physical terminal, which requires hardware. The web based portal can usually be accessed through a desktop, tablet or mobile device, where you can process card payments online.
The process for taking payments over the phone will vary, depending on your provider. You’ll need to:
Log in to your Virtual Terminal with the account details your provider has given you.
Follow the on-screen prompts to enter the customer’s details. Usually, you’ll need their long card number, the card’s expiry date, and the card security code.
You might be required to ask for further information for security purposes, such as the name on the card, or the billing address.
Submit the transaction and keep the customer on the phone while it is being processed
Once the payment has been approved, your can dispatch the goods to the customers postal address.
Advantages of Virtual Terminals:
You can take payments quickly and easily without your customer being present.
You don’t need to invest in expensive point-of-sale (POS) software
If you don’t sell anything in person (Card present), you don’t even need to invest in physical credit card machines on long term contracts
There is more freedom and flexibility – transactions can be carried out anywhere, from any device and at any time, as long as you have an internet connection.
Disadvantages of Virtual Terminals
Whilst Virtual Terminals are normally branded a 'secure' by the provider, you need extra security measures in place to take card-not-present payments to avoid chargeback fees.
Fees (Merchant Service Charges) are typically higher for transactions where the card/cardholder is not present, than for card machine payments, that process a contactless or chip and PIN card.
The business may trigger additional PCI DSS compliance regulations
Businesses need to be aware that these are often promoted as a 'secure' way to process MOTO transactions.
In our opinion, this is a little misleading as transactions processed through a Virtual Terminal, may be processed as and charged at a 'non-secure' transaction rate, by your merchant account provider. Again, the cardholder needs to provide their sensitive card data, typically their long card number, expiry date and the 3 digits on the reserve of the card, to which the business will key in to Virtual Terminal. Additional checks such as 'Address Verification Services' (AVS), are often commonplace, however if you use a Virtual Terminal, your business is liable for fraud related chargebacks, should the cardholder challenge the transaction, claiming that they never authenticated the payment. It is therefore suggested that you should only deliver goods or service to the 'registered cardholders address'. PCI DSS requirements are also triggered, causing additional time, effort and cost.
What are the other options to take MOTO (mail order/telephone) payments?
Whilst some organisations might use their physical card machine to process MOTO transactions, this again carries all the risk and expense highlighted above.
Another option, is to use our multi-award winning, SOTpay technology.
How does our innovation help?
Our cloud-based technology does not require any additional hardware or amendments to existing telephony ornetwork set up and is Acquirer and Payment gateway agnostic. Totally eliminating the need for capital expenditure, SOTpay can support businesses of all shapes and sizes in any sector.
SOTpay eliminates the risk of fraud related chargebacks for businesses, by authenticating MOTO andOmni channel CNP transactions and processes the payment in a PCI compliant manner, converting a risky ‘non-secure’ transaction into a ‘secure, authenticated, compliant’transaction in the eyes of the acquiring partner, the merchant can see significant savings in theirMerchant Service Charge's. We have seen businesses save in excess of £40,000 per annum,following the deployment of SOTpay.
SOTpay enables you to send out an electronic payment request in real time, via email, SMS, web chat or electronic invoices.
The flexibility of the SOTpay technology enables the merchant to accept secure and compliant transactions across numerous channels, boosting business by allowing cardholders to complete transactions in their desired channel of engagement. For example, if someone is engaging with the business on Facebook, SOTpay allows the business to take payment within the Facebook Messenger environment.
By preventing cardholder data in its entirety from entering the merchant environment, SOTpay makes achieving andmaintaining PCI DSS compliance easier and more manageable for your business. With liability for fraud related chargebacks eliminated the merchant can also deliver to an alternative delivery address, instead of just to the registered cardholder’s address.
As a disruptive payment technology, the PCI SSC updated their Global ‘Protecting Telephone Payments’ guidelines to include our innovative approach, which gave us tremendous credibility within the acquiring industry. We have subsequently become partners to some of the largest payment organisations in the world, helping to protect and support their merchants against the challenges that business face.