Compare how virtual terminals and point-of-sale systems work, where each fits best, and what to consider before choosing your payment setup.
What Is a Virtual Terminal?
A virtual terminal is a browser-based payment tool that allows an authorized business user to manually enter a customer’s payment information into a secure payment interface.
Instead of swiping, inserting, or tapping a physical card, the user may enter details such as the customer name, card number, expiration date, billing information, and transaction amount. The transaction is then submitted through the payment-processing system for authorization.
What Is a POS System?
A POS, or point-of-sale system, is generally used when the customer and the business are physically present at the same location. The customer may insert, swipe, or tap a card or supported digital wallet at a payment terminal.
Many modern POS systems can also include product catalogs, inventory tracking, employee management, sales reporting, digital receipts, customer records, and transaction history.
Virtual Terminal vs. POS: What Is the Main Difference?
The biggest difference is how the payment information is entered. A POS system normally uses a physical card or supported digital wallet at the point of sale. A virtual terminal is commonly used when payment details are entered manually for a remote transaction.
Remote payments
Virtual Terminal
- Phone payments
- Invoice payments
- Mail-order payments
- Certain B2B transactions
- Browser-based access
Face-to-face payments
POS System
- Retail transactions
- Counter payments
- Restaurant payments
- In-person service payments
- Tap, insert, or swipe
What About Transaction Costs?
Processing costs can differ depending on how a transaction is accepted. Card-not-present transactions can have different pricing or risk considerations than card-present transactions.
Your actual processing costs may depend on the business type, transaction volume, average ticket amount, payment method, card type, processing environment, and merchant account provider.
Review the complete pricing structure rather than choosing a payment solution based on one advertised rate.05
Can a Business Use Both?
Yes. Many businesses benefit from having multiple ways to accept payments. A company may use a POS terminal for customers visiting its location while also using a virtual terminal for customers paying invoices or making authorized payments remotely.06
Which Solution Should You Choose?
A POS system may make more sense if most transactions happen face-to-face. A virtual terminal may be more suitable if you regularly accept payments remotely. Businesses operating through several sales channels may need both.
Where customers make paymentsMonthly transaction volumeAverage ticket sizeRecurring payment needsRemote-payment volumeReporting requirementsIntegration needsPayment security requirements