What Is a Virtual Terminal? Virtual Terminal vs POS System

What is a virtual terminal? A virtual terminal is a secure web page where you type a customer’s card or bank details into your payment gateway yourself, so you can take a payment without a card reader. A POS (point-of-sale) system does the opposite job: it reads a physical card or phone wallet when the customer is standing in front of you. If your customers pay by phone, email, invoice or mail, a virtual terminal is the tool you need. If they pay at a counter, a POS system is.

That one difference, whether the card is in the room, drives almost everything else in the virtual terminal vs POS system decision: what you pay per sale, how much fraud risk you carry, and how much PCI compliance work lands on your desk. Here is how each works, what it costs, and how to pick.

What Is a Virtual Terminal?

Think of a virtual terminal as a card machine that lives in your web browser. You log in to your gateway account, open the virtual terminal screen, and type in the payment details the customer gave you: name, card number, expiration date, CVV, billing address and amount. You click submit, and the sale goes out for authorization like any other card payment.

Most payment gateways include one. Authorize.net, for example, describes its Virtual Terminal as a way to submit credit card transactions to the gateway manually, and its help files also cover submitting a bank account charge for eCheck payments. That matters if some customers would rather pay from a checking account.

Because the card is never physically in your hands, every virtual terminal sale is a card-not-present transaction. Keep that in mind; it explains the pricing and security differences below.

Who uses a virtual terminal?

• Phone and mail orders: a supplement or vitamin brand that takes reorders over the phone, or a catalog seller.
• Agencies and consultants: a marketing agency that collects a retainer when the client calls in a card.
• B2B invoicing: a software company billing a client who pays invoices with a corporate card.
• Online businesses with a support team: staff can take a payment for a customer whose online checkout failed.

What Is a POS System?

A POS system is the checkout setup at a physical location. The customer dips a chip card, taps a card, or holds up a phone wallet at a terminal, and the terminal reads the card data directly. Modern POS systems usually add inventory tracking, staff logins, sales reports and receipts, so they work more like a store’s operating system than a simple card reader.

Chip and contactless terminals have to meet card-network standards. Visa’s merchant qualifications page, for instance, states that chip-enabled terminals must have current, valid EMV approval.

Virtual Terminal vs POS System: Side-by-Side

Cost: why keyed-in sales cost more

Interchange is the fee the customer’s card issuer earns on every sale, and it is the largest part of what you pay to accept cards. Card networks set lower interchange for card-present sales because the card and cardholder can be checked on the spot.

Here is a real example from Visa’s U.S. interchange schedule (effective April 18, 2026) for an exempt Visa debit card on a $100 sale:

That gap of $0.85 per $100 adds up over thousands of sales. On interchange-plus pricing you see the exact interchange category on each sale, so you can tell what the networks charged and what your processor added. Our guide to credit card processing fees breaks down the rest of the bill.

Security and PCI compliance

Both tools fall under PCI DSS, the security standard for any business that stores, processes or transmits cardholder data. The workload is different, though.

The PCI Security Standards Council publishes a short self-assessment, SAQ C-VT, for merchants that only take cards through a third-party virtual terminal. It applies to merchants that manually enter a single transaction at a time via a keyboard, on a computer with no attached card reader, and who do not store card data electronically. It does not cover e-commerce checkout pages, so if you also sell through a website, ask your processor which questionnaire fits.

The bigger day-to-day risk with a virtual terminal is fraud. Someone with a stolen card number can call in an order, and if the real cardholder disputes it, the chargeback usually lands on you. Turn on address verification (AVS) and CVV checks, limit which staff can log in, and never write card numbers on paper notes, spreadsheets or email.

Which One Should You Choose?

Start with where your customers are when they pay. Use this checklist:

• ☐ Most payments happen by phone, email or invoice? Choose a virtual terminal.
• ☐ Most payments happen at a counter or table? Choose a POS system.
• ☐ You sell online and sometimes take orders by phone? Use your gateway’s online checkout plus its virtual terminal.
• ☐ Customers want to pay from a bank account? Check that your virtual terminal supports ACH or eCheck.
• ☐ You bill the same customer every month? Look for stored payment profiles and recurring billing in the gateway.
• ☐ You want the lightest PCI workload? Ask whether SAQ C-VT applies to your setup.

How to set up a virtual terminal

1. Get a merchant account. The virtual terminal is just the screen; the merchant account is what lets you accept cards. Our step-by-step guide to getting a merchant account covers the application.
2. Pick a gateway. Compare options in NMI vs Authorize.net, and see how the pieces fit together in merchant account vs payment gateway.
3. Set user roles. Give each staff member their own login and only the permissions they need.
4. Turn on fraud filters. Require CVV and AVS, and set rules for unusually large orders.
5. Record authorization. For phone payments, especially recurring ones, keep a record that the customer agreed to the charge. For bank payments, follow the ACH authorization requirements.
6. Run a small test sale and refund before you take real orders.

Common mistakes to avoid

• Keying in a card that is physically present. You pay card-not-present rates and lose chip protection.
• Sharing one login across the whole team, so you cannot tell who ran which sale.
• Skipping AVS and CVV to save a few seconds on the call.
• Saving card numbers in a CRM note or email to bill later. Use the gateway’s secure stored profiles instead.

How Payment Circle Fits In

Payment Circle works with online and remote U.S. merchants, including agencies and software companies. We set up merchant accounts with a virtual terminal and payment gateway through NMI or Authorize.net, plus ACH payment processing for bank payments. We do not set up in-store POS systems, so if most of your sales happen at a physical counter, a retail-focused provider is a better fit.

Related Guides and Next Steps

• New to remote payments? Read what a card-not-present transaction is and how to cut CNP fraud.
• Want the full picture? See how payment processing works, step by step.
• Getting ready to apply? Use the merchant account approval checklist and review our pricing tiers.
• Worried about disputes on phone orders? Our chargeback management service and chargeback prevention guide can help.
• Billing clients for services? See our professional services payment processing.

Virtual Terminal FAQ

Is a virtual terminal the same as a payment gateway?

No. The gateway is the technology that sends card data to be authorized. The virtual terminal is one screen inside the gateway that lets your staff type in a payment by hand. Your website checkout uses the same gateway through a different door.

Do I need a merchant account to use a virtual terminal?

Yes. A virtual terminal needs a merchant account, or an account with a payment facilitator, behind it to settle funds to your bank. The terminal itself does not move money.

Are virtual terminal payments more expensive than POS payments?

Usually, yes. Keyed-in sales are card-not-present, and the card networks charge higher interchange for them. In Visa’s current U.S. schedule, an exempt debit sale costs 0.80% + $0.15 card-present versus 1.65% + $0.15 as card-not-present e-commerce.

Is it safe to take card payments over the phone?

It can be, if you enter the details straight into the virtual terminal, use AVS and CVV checks, and never write the card number down. Phone orders do carry more fraud risk than in-person sales, so watch for rushed, high-value orders shipped to new addresses.

Can I accept ACH payments through a virtual terminal?

Often, yes. Many gateways let you key in a customer’s routing and account number as an eCheck. You still need the customer’s authorization for the debit, and the payment follows ACH rules rather than card rules.

Sources and Further Reading

• Visa: Visa USA Interchange Reimbursement Fees
• Visa: Merchant Qualifications
• PCI Security Standards Council: PCI DSS
• PCI Security Standards Council: Self-Assessment Questionnaire C-VT
• Authorize.net: Virtual Terminal help