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What is a Virtual POS Terminal?

With the incredibly rapid development of digital marketing, a need among retail merchants and stores everywhere has risen for a more secure and stable method of receiving payments online.

At the dawn of the Internet, websites listed only available products along with a phone number and other contact details. You contacted the seller and agreed on a payment method, and a few days later, the product was waiting for you at the post office or at your doorstep.

How do online businesses emulate the physical action of receiving a card payment?

Online merchants, eCommerce businesses, and service sellers utilise a solution called a Virtual Terminal. It is a payment gateway which allows them to manually authorise card transactions initiated by the buyer.

This process greatly expands their payment sources, reduces the time of the payment process, and adds additional security.

Today (as many of you have already experienced for yourselves), all you have to do when shopping online is to add items to the basket. After you’ve chosen them, you will be redirected to the virtual point of sale (or POS for short) page. There, you will securely input your credit card information and pay for your purchase – and that’s it – in person, payments are a thing of the past!

What is a virtual POS terminal: Detailed explanation

In essence, a virtual terminal represents a software solution that facilitates the acceptance of credit card payments without the need for physical terminals with additional hardware, like cash registers or card readers.  

A virtual POS terminal offers all the functionality of a traditional POS terminal, such as card transactions, refunds, authorisations, and more. 

This solution allows merchants and consumers to input payment details into a web-based application, such as credit or debit card information, CVV code, and billing address. In most cases, access to virtual POS systems is obtained via mobile devices, such as smartphones, tablets, or computers. 

How does it work?

E-commerce businesses can rely on virtual POS terminals to accept payments from shoppers online via email, telephone, or fax. 

But to fully understand how this system works, it’s fundamental to explore its individual components:

  • User interface;
  • Payment gateway;
  • Database of transaction details, customer data, and product information;
  • Inventory management tools;  
  • Analytical and reporting tools;
  • Invoicing and billing;
  • Tax calculations;
  • Multi-currency support;
  • Security features;
  • CRM integrations.

And more. 

These features and functionalities work together to enable payments via the virtual terminal.

The process itself takes place through several steps:

  • Setup – To utilise the virtual terminal, merchants are required to sign up for the POS service by setting up an account, creating new users, and configuring settings.
  • Login – Once the setup is complete, business members can access the system via credentials submitted into the user interface.
  • Transaction initiation – When initiating a transaction, business members choose the items or services the shopper wishes to buy and input the consumer’s payment information manually.
  • Verification – Next, the payment must be verified. The customer’s payment data is passed on to the payment gateway. At this stage, a range of authorisation tasks take place.
  • Authorisation – After the payment gateway confirms that the details are verified and the transaction is authorised, the confirmation is sent to the financial institution for another verification.
  • Transaction completion – Once the financial institution verifies the provided details, the transaction is complete. At this point, the shopper can receive a receipt for their purchase. 
  • Data records – Transaction data is recorded into the system, storing information like payment amounts, customer details, and more. 

The solution will also update stock levels after the purchase for virtual POS systems that consist of inventory management tools. Some systems may also provide opportunities for instant invoicing, tax calculations, and more. 

The Virtual POS system is the most versatile and customisable solution for your online shop needs

The integration of a Virtual POS terminal is possible with numerous e-commerce platforms.

In addition to that, a variety of payment links and buttons can be placed on a desired location of a website, making it easier for your customers to navigate to the checkout page.

If you’ve designed your online store in a specific manner and you would like to have a payment gateway solution introduced in a seamless way with the overall design of your website, you have the full freedom to do so.

One of the most significant benefits of utilising your very own virtual POS system is convenience.

Merchants connect their systems to a payment platform of their choice and process payments swiftly and easily.

Another benefit of having a Virtual POS is that if you would like to setup a kiosk at a trade show, a clinic, or anywhere else where you can receive payments, all you will need is a computer and an Internet connection.

With each passing year, the percentage of people using credit and debit cards to make purchases has increased at a steady rate of 1.4%. In the Card Expenditure Statistics published by The UK Cards Association, approximately 12% of all card payments made worldwide were online.

The number of all card purchase increases was a staggering 125 million per year.

As online shopping steadily makes its way into the world of Economics, many businesses are seeking to make the system more secure and easy to use. Today, both sellers and buyers can enjoy a payment system that will save them time and effort.

One of the most competitive financial products on the market that offers a complete virtual POS package is myPOS.

The brand’s mission is to provide businesses of all sizes with the opportunity to receive non-cash payments anywhere and in an instant.

The MO/TO Virtual terminal offers not only versatility in payment options – via shopping platforms, developer API, payment links such as payment request, but also the mobility of receiving payments immediately, virtually and practically everywhere.

It is a great solution for the service industry or businesses requiring advance payments or bookings, such as hotels, spa centers, independent professionals, and the like.

How can you accept MO/TO payments through a Virtual POS Terminal?

As a merchant, there are easy ways for you to take MO/TO payments, too. MO/TO transactions refer to mail order/telephone order transactions.

They are very well suited to businesses whose clients are physically far away from them or to the car rental industry, where prepaid installments are usually required.

They’re also ideal for the hotel industry as bookings at your hotel may come from somewhere across the world.

The process is very simple. All you need to do is to enter the client’s card details into your virtual terminal manually and you’re ready to go.

Remember that the key elements for a successful MO/TO transaction are having an Internet connection and a computer.

Your virtual terminal with myPOS has been integrated with your online merchant account and you therefore don’t need any special further integrations. It’s that easy!

What is the level of security of a Virtual POS terminal?

With increased developments in the digital landscape, security questions are bound to arise, especially with payments made through a Virtual POS Terminal. Your customers might be wondering how safe it is for them to provide you with their details online.

As a whole, the built-in security features of a Virtual POS Terminal allow for secure transactions and both you the merchants as well as your customers have little to worry about.

However, there are certain precautions that you should take when processing payments via a Virtual terminal. These include never giving out your card details to sources you don’t trust.

Research the client and ensure they don’t appear on a fraud or scam list. Other layers of added security include the CVV number on the back of a credit card, which should only be known by the card’s owner.

By following these simple steps, you’ll ensure you receive secure payments.

Pros and cons of a virtual POS for your business

Just like any other solution, virtual POS terminals have several advantages and disadvantages worth acknowledging.

Pros of virtual POS terminals

When evaluating the benefits of virtual POS terminals, some of the features to consider may include the following things:

  • Affordability – As virtual POS terminals don’t require hardware, they’re considered a much more cost-effective option when compared to other payment methods. This can dramatically affect the necessary business investments, especially for small businesses.
  • Convenience – Virtual terminals are compatible with any connected device. This makes them extremely convenient in today’s digital age, where we’re all connected to the Internet at all times.
  • Flexibility – Virtual terminals allow businesses to accept payments from a wide array of sources. For example, virtual POS terminals support credit and debit card payments, mobile wallets, online payments, and more. It helps businesses provide an enhanced customer experience, which contributes to building a strong brand reputation.
  • Analytics and reporting – Most virtual POS terminals come with a built-in system for analytics and reporting. This enables businesses to gain access to valuable insights regardings sales, consumer behaviour, and even inventory management.
  • Record keeping – As virtual POS terminals record transaction details (such as customer data, transaction amount, and timestamps), they can prove to be valuable in cases of a chargeback dispute, providing chargeback protection. 

These benefits turn virtual POS terminals into a top choice for large and small business owners.

Cons of virtual POS terminals 

At the same time, virtual POS terminals are associated with security drawbacks, which are fundamental to address. 

In the case of in-person card payments via hardware solutions like card readers, the hardware sends the card information in a secure manner to the POS and then to the payment processor. 

Typically, this data is securely encrypted when being sent for verification. 

On the other hand, in the case of virtual POS terminals, the payment details are provided manually – an approach that is considered less secure, exposing the information to vulnerabilities and risks of data theft. 

In addition, virtual POS terminals’ dependence on Internet connectivity raises concerns. For businesses that suffer from slow, unstable, or unavailable connections, this may pose significant challenges. 

What does it mean for your business, and why do you need a Virtual POS terminal?

The global society is starting to frequently use cards as a method for making any type of payments.

Even small businesses in developing countries are finding ways of integrating machines and online payments to be more competitive and efficient in how they get paid.

Banks have started their slow but sure decline, as their financial channel infrastructure cannot compete with the speed and convenience which the Internet delivers.

If you’re ready to introduce your businesses to online financial management, then you will surely see the success you have dreamed of.

If you are looking for a better way to expand your mobile presence and offer your services or products to clients from a long distance, myPOS is the answer!

Increase your sales, make your clients happy, and run your business successfully and effortlessly.

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