What is a credit card terminal? A credit card terminal is a small piece of equipment that is used to swipe credit cards (through). The terminal reads card holder’s information off the magnetic stripe (of the credit card) and sends it through a phone line to a credit card processing gateway which talks to the credit card issuing bank to verify the card holder’s information. A “virtual terminal” means a terminal that is not “tangible.”
A credit card virtual terminal refers to a web form that is placed on a webpage that accept credit card holder’s information to complete a credit card transaction. Obviously the web form is more than just a form. It connects to back-end processing. The web form can either be filled out by the credit card merchant (i.e., the website owner), or a customer (i.e., credit card holder). When a “submit” or “confirm” button is clicked, the information is sent to the credit card processing gateway through the Internet.
If the customer is physically present with a credit card, obviously a physical terminal is more convenient because it only takes a “swipe.” A virtual terminal though can also be used, it is primarily for the purpose of “remote processing,” meaning when the customer is not physically present with the card. When a customer is on the phone, the advantage of a virtual terminal is apparently that you do not need 2 phone lines.
Take it one step further, the credit card virtual terminal has a lot of advantages over the conventional terminal. It can be used with a shopping cart software to accept credit card payment on your website obviously even when you are not present. That is the beauty of the Internet e-commerce.
The disadvantage of accepting credit card on your website is the risk is higher compared to when customers are physically present with the cards. It is up to you to make the judgment to avoid risky transactions.
Either virtual terminal or not, you need a merchant account to be able to accept credit card payment.
You can certainly operate an e-commerce site without a virtual terminal or credit card merchant account. You can use Paypal, Google Checkout, or Amazon payment among others. So why do you want to use a credit card virtual terminal (i.e., getting a credit card merchant account)? According to our experience, accepting credit card directly (as opposed to using Paypal/Google checkout/Amazon Payment) increased our website sales by more than 50%.
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