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Cash has been king for a long time, but its reign might end. The average American now has three credit cards and 2.3 retail store cards, on average. There are just too many benefits to using a credit card that consumers can’t afford to pass up.
Every business will have to establish how to accept credit card payments. The first part is deciding whether to create a merchant account with a bank or hire a processing payment service provider. The next step will be setting up point-of-sale software and hardware to read credit cards.
One of the easiest ways to achieve both goals is to use a virtual terminal.
What is a virtual terminal?
Virtual terminals are web-based software that allows credit card processing on any device with an internet connection. Installing the software essentially converts any desktop, laptop, tablet, or mobile device into a point-of-sale system. You’ll have the option of connecting a credit card reader via USB, or you can manually key in the credit card information, including card details like your card number, security key, and expiration date.
How does a virtual terminal work?
Using a virtual terminal is a simple process with the right software. You’ll have to log into your account, enter the purchase price and hard key, use a card reader to provide the customer’s credit card information and submit the transaction for processing. After paying a small processing fee, the funding should be deposited into your bank account between 24 hours and three days.
Who should use a virtual terminal?
Every small business can benefit from using a virtual credit card terminal. The ability to turn any device into a payment gateway shouldn’t be discounted.
In general, these are a few of the businesses that experience the most benefits from using virtual terminals:
- Retailers may or may not have a brick-and-mortar store but aren’t large enough to demand a full-scale point-of-sale system.
- Freelancers such as writers, editors, SEO specialists, translators, artists, graphic designers, or other remote workers rarely interact with their clients face to face, making card-not-present transactions suitable.
- Restaurants that take orders over the phone for delivery or takeout offer curbside pickup for contactless customer service.
- Delivery-based businesses rarely take orders from in-person customers and might not be delivering the product to the customers that are paying.
- Professionals such as doctors, attorneys, mechanics, landscapers, and accountants want to take payments over the phone to book clients, settle balances, or provide services without meeting in person.
What are the best virtual terminals available?
There is no shortage of options to choose from when it comes to payment processing. You have plenty to pick from, but not all offer virtual terminal software. Here is a list of the six best virtual terminals currently available in 2023:
Square has been a popular payment processing option among small-business owners for a long time. Typically, Square in-person payment processing is why merchants have stood by their services. However, their virtual terminal has severely stepped up its game over the years. It’s improved so much that Square starts off this list.
The best features of the Square virtual terminal include:
- Pay as-you-go billing with no monthly or annual fees
- Free card swiper whenever you create your account
- Flat rate pricing options (3.5% plus 15 cents for manually keyed in transactions, 2.6% plus 10 cents for physically present transactions)
- Can process credit/debit payments, ACH transfers, split transactions, payment links, and BNPL financing
- Free POS software that can help handle inventory and manage customers’ card information
- Seamless integration with QuickBooks and other accounting software
- Chargeback protection of up to $250 each month
The biggest downside to using Square is that it can be pricey for businesses with a high sales volume. Square is a pay-as-you-go billing that can save you money if you aren’t processing too many payments. But if you’re using Square a few dozen times a day, it might be less expensive to look elsewhere.
Helcim just narrowly misses out on the top spot on this list. However, it’s the perfect alternative to Square. The Helcim virtual terminal is best for growing retailers with a high volume of transactions. The reason is that Helcim doesn’t charge a monthly fee and offers automatic volume discounts.
The software for Helcim includes the following features:
- Month-to-month billing with no long-term contracts or early termination fees
- No monthly account fees
- Flat rate pricing with volume discounts available (0.5% plus 25 cents for manually entered transitions, 0.3% plus eight cents for in-person transactions, 0.5% plus 25 cents for ACH transfers)
- Processes debit/credit cards, ACH transfers, and international payments
- Set up recurring payments or create schedules to bill customers automatically
The main issue with Helcim is that it’s not designed for new businesses that are just starting. You’ll need to undergo an application process where you can be approved or denied. It might be best to begin using Square as it doesn’t have an approval process. Once you start to experience a high volume of sales, then it might be worth switching to Helcim.
3. Clover POS
Clover is much more renowned for its countertop terminal and POS systems than its PCI-compliant virtual terminals. However, the No Hardware Plan is enough for Clover to find its way on this list. The plan delivers on its promise and is fully operational without requiring any physical device.
The best features involved with the Clover No Hardware Plan include:
- Month-to-month contract with no early termination fees
- Decent pricing plan ($9.95 a month, 3.5% plus ten cents for keyed-in transactions, 2.6% plus 10 cents for in-person transactions)
- Access to the Clover App Market, where you can add on other features
- Ability to send invoices via email
- Generate sales reports
- End-to-end encryption of payment
- Integrates with CRM software
- Fraud tools, including AVS/CVV recording and PCI compliance
- $100,000 in liability protection in the event of a data breach
The most significant issue with using Clover is that it can only process debit and credit as payment methods. It can take MasterCard, Visa, and other major cards, but it cannot handle ACH transfers or e-checks.
Another problem is that the price of Clover isn’t as good as others on this list. However, access to the Clover App Market can be worthwhile if you want additional services. But if you’re just looking for a virtual terminal service, you might want to try another option.
PaymentCloud finds its way on this list as it’s one of the few payment processors willing to work with high-risk businesses.
For example, retailers that sell CBD projects can often struggle to find a processing partner due to a fear of chargebacks. PaymentCloud is willing to take on these risks for a slightly higher cost.
Technically, PaymentCloud doesn’t have its virtual terminal as it connects through a third party. However, the customer support team is accommodating with setting up virtual terminals and anything else you might need.
Here are some of the best features that come with PaymentCloud:
- Solid pricing for low-risk businesses ($15 a month, 0.1% to 0.5% plus15 to 25 cents for manually keyed transactions, 0.05% to 0.3% plus eight to ten cents for present transactions)
- Free card reader with an account
- Excellent customer service
- Software that connects to inventory and helps with CRM
- Can process credit/debit cards, ACH transfers, e-checks, QR code payments, and international payments
- Provides data encryption, fraud protection, PCI compliance, and several security verifications
- Can help high-risk businesses partner with more than 10 different banks
The biggest downside to using PaymentCloud is that it doesn’t have its own POS system. It will integrate seamlessly with one, but it doesn’t provide it with your subscription. Also, only the pricing for low-risk businesses is provided. PaymentCloud does work with high-risk businesses, but the prices are only listed as “variable.”
5. Durango Merchant Services
Durango Merchant Services makes this list because it specializes in high-risk ecommerce businesses. Finding a payment processor can be challenging when you operate a business in such a niche sector. Durango Merchant Services is easily the best option as it’s the only one.
The best features offered by Durango Merchant Services include:
- Variable monthly accounts, processing rates, and contract terms
- Supports credit/debit cards, e-checks, and cryptocurrency
- Offshore merchant account for international merchants
- Customer information database
- Ability to establish recurring bills
- Security features include data encryption, tokenization, and various anti-fraud services
The biggest downside of Durango Merchant Services is that they can’t disclose pricing information. Many factors prevent Durango Merchant Services from establishing a transparent monthly account fee. You’ll undoubtedly be paying well above what a low-risk business will, but there’s no telling how high it could end up.
PayPal might be the most widely recognized payment processor in the world. The interface is user-friendly, permits peer-to-peer payments, and allows cryptocurrency wallets. For these reasons, it’s a perfect fit for people with a low sales volume who might simply need a payment processor for their side hustle.
The best features of using PayPal include:
- Solid pricing options (3.09% plus 49 cents for all transactions)
- Free access to the POS software Zettle
- Permits installment payments from customers
- Instinct access to funds via the PayPal account
- Processes credit/debit cards, cryptocurrency, and more than 200 international currencies
- Extremely user-friendly interface
- Seamless integration with hundreds of POS systems and third parties
The most common complaint about PayPal is that it charges a $30 monthly fee for its services. The pricing options are slightly lower for manually entered payments, but it would take a long time to offset a high monthly fee.
Other downsides of PayPal are that it doesn’t process ACH transfers, is quick to freeze funds when sales earnings are higher than usual, and imposes additional fees for invoices and recurring payments.
Set up a virtual terminal so you can get paid.
Getting paid is the entire purpose of starting up a business. The ability to process customer payments will make it much easier to get paid.
A few decades ago, small businesses only needed a cash register and a safe to handle most payments. In the modern age, technology has made digital payments the new standard. That means you will need to bring a payment processor into the mix.
Using one of the options listed above is the easiest way to receive a high-quality virtual terminal for your business. You’ll officially join the digital age as you can now process credit card payments.
While the convenience of processing credit cards will certainly help to boost your business, there are a few concerns. Make sure you take every step possible to prevent credit card fraud. It’s the fastest way to hurt your reputation and bank account significantly.
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