What Is Virtual Terminal Credit Card Processing?

What Is Virtual Terminal Credit Card Processing?

There are more ways to process credit card payments than ever. You can swipe a credit card using a traditional credit card reader, process mobile payments through a cell phone app, and even accept contactless payments.But what happens when the customer’s card isn’t present, such as when they place an order over the phone? For that, you’ll need a virtual terminal.A virtual terminal is a web app that allows you or your customer to enter credit card details manually, charging the card just like you would if the customer was making a purchase in person. It’s a great choice for businesses that don’t rely on face-to-face interactions with customers.Here’s what you need to know about virtual terminal credit card processing, including what it costs and how to set it up for your business.

What Is Virtual Terminal Credit Card Processing?

According to the U.S. Federal Reserve, there were 86.1 billion in-person card payments in 2018 and 33.5 billion remote payments. Although remote payments make up a smaller percentage of sales, they’re growing at a faster rate — 20.5% compared to 5.8%.For businesses that rely primarily on remote credit card transactions — from call centers to home-based businesses — that gap can be even larger.In order to accept credit card payments without the cardholder present, you’ll need to use a virtual terminal for payment processing. If you’ve ever bought anything from an online store, then you already have an idea of what a virtual terminal looks like.A virtual terminal lets you or your customer enter in their credit card information during the checkout process using an online form — just like you do when shopping on an e-commerce platform like Amazon.All you need is a web browser and a good internet connection. Your payment processor or merchant services provider will verify that the credit card details are correct and will charge you a processing fee for each transaction.

How Does a Virtual Terminal Work?

Even if you’ve only accepted payments for card-present transactions,using a virtual terminal won’t be that much of a learning curve for you and your employees. The main difference is that there’s more room for error, since you or your customer will be typing in the credit card number by hand.If you or your employees are the ones entering the credit card details, it’s important to make sure the info is entered accurately to avoid complaints or chargebacks.Here’s what you need to know about how a virtual terminal works and how much it will cost to start using one for your business.


The best thing about a virtual terminal is that you don’t need any expensive equipment to start accepting credit cards. Some POS systems require you to install premium software or wait for a credit card reader to arrive in the mail. But not virtual terminals.If you work from home, you can simply log in to a virtual terminal from your web browser when it’s time to bill clients. If you run a store, you can access your virtual terminal from your company’s tablet or any other mobile device.You can even cut down on having to buy paper, since you can send your customers a receipt by email instead of printing it out.


The best virtual terminals are PCI-compliant and use a high level of security to protect your customers’ credit card details. This includes technologies like tokenization and end-to-end encryption to ensure payment details aren’t intercepted by hackers.Of course, you’ll want to take precautions of your own to prevent unauthorized charges, such as not logging into your virtual terminal on a shared computer and verifying the following information for every transaction:

  • Name
  • Credit card number
  • Three- or four-digit CVV number
  • Expiration date
  • ZIP code


One of the biggest things to consider when using a virtual terminal is the cost. While the virtual terminal itself may be free, it may have higher transaction fees than other types of transactions. For example, Square charges 2.6% plus 10 cents for in-person transactions but 3.5% plus 15 cents for remote transactions.There’s a reason payment processors do this: It’s because keyed-in transactions have a higher risk of fraud. Still, it can seriously eat into your profit margins.If you use Nadapayments as your virtual terminal credit card processor, you’ll pay $0 on all credit card payments, and your customer will be charged a flat 3.5% surcharge. The customer can choose to avoid the surcharge by using a debit card, in which case you’ll only pay 1% plus 25 cents for processing.

Who Is Virtual Terminal Credit Card Processing Best For?

Virtual terminal credit card processing: entrepreneur holding a credit card while typing on a laptop

Virtual terminal credit card processing can be used for nearly any type of business, but it may be a better fit for some businesses than others. These include:

  • Small businesses: Do you own a bookstore that accepts payments online or over the phone?. Or does your restaurant charge customers a reservation fee when booking a table over the phone or through your website? You can benefit from a virtual terminal. Plus, your employees can type in a customer’s credit card details immediately, instead of writing it down and processing it later — which increases the risk of fraud or identity theft.
  • Call centers and mail-order companies: Using a PCI-compliant virtual terminal is a must for businesses that primarily rely on card-not-present sales. Not only will it protect payment details from hackers, but by sending out a receipt right away, you’ll reassure customers that your business is trustworthy.
  • Creative professionals and online service-based businesses: Instead of waiting for clients to send an ACH transfer to your bank account, you can charge their credit card directly and send them a receipt. Or, you can send them a link to a payment gateway via email that they can use to pay an invoice. Not only is this safer and more secure, but it can make your business appear more professional and trustworthy.

Some businesses may not benefit from a virtual terminal, especially if you process most of your transactions in-person using a credit card machine. That said, it’s good to have a backup option if your primary payment processing method goes down.Plus, it’s possible you already have access to a virtual terminal through your merchant services provider. For example, Nadapayments will provide you with a credit card reader and access to a virtual terminal for a flat monthly fee of $35.

Pros and Cons of Virtual Terminals

As with any type of payment method, virtual terminal credit card processing has its pros and cons. One benefit is that you’ll have access to a wide range of payment processing options — including online, over the phone, and even via email. This can make it easier for small business owners to accept credit card payments at the moment of sale and see the money in their bank account in just a few business days — instead of waiting for a bank transfer to arrive or a check to clear.As we mentioned earlier, you may end up paying more in transaction fees, since your payment processor may charge higher fees when the card isn’t present.The best virtual terminals address this by providing a transparent pricing structure so you don’t have to keep track of different processing fees for different payment methods. For example, Nadapayments charges the same rate for in-person payments and virtual terminal credit card processing.

Set Up a Virtual Terminal With Nadapayments

Person holding a credit card while typing on a laptop

Nadapayments makes it easy for businesses to accept credit card payments anywhere — online, in-person, and even on the go. The Nadapayments app and virtual terminal are free, and if you need a physical credit card terminal for your business, you’ll pay a flat monthly fee of $35 per month for a Wi-Fi-enabled EMV card reader.Plus, by setting up a surcharge program, you can get rid of fees for in-person payments and virtual terminal credit card processing. Your customers will be charged a 3.5% fee if they pay with a credit card, and you’ll pay only 1% plus $0.25 if they use a debit card.Nadapayments takes care of the paperwork and provides the signage, so you can keep accepting payments like you always have, just without the cost.Sign up with Nadapayments to get access to an all-in-one payment solution today!

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Aleksey Nugid
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