Point-of-sale systems (POS) allow your business to accept debit and credit card payments. Online and offline systems exist along with virtual terminals that allow for convenient payments as long as you have an Internet connection.
What is a Virtual Terminal?
A virtual terminal is a software system that enables retailers to accept credit cards without a physical terminal. Retailers can use the software to accept payments by entering the customer’s card and entering the transaction manually.
If you’re going to a local event or tradeshow and want to take orders, then a virtual terminal is a great option. They’re quick and easy to set up, and they provide you with the same level of security as a traditional terminal.
You can also use these terminals to accept orders:
- Via mail
- By phone
POS systems and virtual terminals have similar pros and cons, although most businesses will find that the pros far outweigh the cons.
Pros: How POS Systems and Virtual Terminals Can Help Your Business
The world is virtual. People are abandoning malls and retail stores to order online, and when they do make purchases in person, they’re often using a credit or debit card. In fact, 80% of consumers prefer using a card for purchases.
And it’s a lot more convenient to make purchases with a card than going to the ATM for cash.
Businesses use POS systems and virtual terminals for a variety of reasons, including:
Today’s consumers are accustomed to paying for purchases using a variety of payment methods. They expect to be able to use cards, cash, or even mobile payments. With a virtual terminal, you can process a variety of payment methods at the point of sale, and provide a seamless customer experience.
Use an Android or iOS device to accept payments in situations where you’re away from the point of sale, like at a tradeshow or at a customer site. This allows you to expand your business’ presence and reach.
Improve Cash Flow
If you have a business that accepts cash for purchases, you know that sometimes it’s hard to get the money into the bank immediately. With a POS system or virtual terminal, you can deposit cash at the end of a shift and have money in your account fast.
Virtual terminals eliminate the need for costly peripherals, like a credit card terminal. They also eliminate the need for a dedicated POS system, like a cash register or an iPad. For new businesses and startups, overhead reduction can be the key to success.
Advanced System Capabilities
Whether you’re using a virtual terminal or a static POS system, you can still take advantage of some advanced capabilities. A lot of virtual terminals can sync with other devices or static systems to help your business:
- Track and manage inventory
- Offer rewards and promos
- Add items to partial orders
- And so much more
Today’s POS systems and terminals are adding features that make them more valuable to your business’ operations. With the ability to tie into inventory management systems, your business can run a more efficient operation.
Cons: Why You May Not Want to Use a Virtual Terminal as a Business
Virtual terminals and POS systems can be powerful additions to your business, but they are not without their flaws. There are a few key disadvantages of POS systems, which we cover in-depth in our article The Key Disadvantages of POS systems.
A few of the most common disadvantages of virtual terminals are:
Since there is no credit card present, virtual terminals are more vulnerable to fraud. If there is a breach in security, then your customers could end up with a fraudulent charge on their account.
Strict measures are taken to verify every transaction to keep fraudulent charges from occurring.
Virtual terminals also have additional fees associated with them. You’ll have to pay a transaction fee for every credit card transaction that you accept.
If you are using a virtual terminal at an event or over the phone, you’ll need to process the credit card manually. This means you’ll have to type out all the information for each transaction, which can be time-consuming.
If you’re using a virtual terminal for an online business, then you’ll need to have a way for customers to enter their information and pay for their order.
Internet Connection Required
Virtual equipment is great because it’s easy to set up and a powerful way to complete transactions, but you need a solid Internet connection. If you’re at an event without Wi-Fi or in an area where there’s difficulty getting a signal, the payment may need to be processed at a later time.
POS systems and virtual terminals have evolved in recent years to be safer and more secure. Giving your customers the opportunity to pay with a debit or credit card is far more beneficial than it is risky.