Virtual Terminal and a Payment Gateway, What’s the Difference?

By  //  April 28, 2020

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When looking for a way to process payments, it is easy to become confused by the jargon and technicalities often used to describe the different services.

When looking for a way to process payments, it is easy to become confused by the jargon and technicalities often used to describe the different services.

If you are looking at the different types of services available, you will most likely have seen two main solutions – virtual terminals and payment gateways.

We have highlighted the main features of each below so you will hopefully have a better understanding of  The Differences Between a Payment Gateway and Virtual Terminal.

What is a virtual terminal?

The first of the two solutions is the virtual terminal, which is an online-based method of processing payments. Using your computer or device, you will be able to log into a portal as long as you are connected to the internet and add in the payment details needed to make a transaction.

You will generally log into a website or platform online through your normal web browser, which will take you to your merchant dashboard.

This dashboard gives you the ability to make a secure payment similar to using a chip and pin device with someone’s card, except you take their details and input them into the platform manually.

In your dashboard, you will also be able to set recurring payments if you run a gym or subscription service and can look at reports on the transactions that you’ve processed over set periods of time.

What is a payment gateway?

The second of the two main options you will see when looking at payment processing solutions is the payment gateway. A payment gateway is what facilitates the movement of money from a virtual terminal to the processor.

This a service that can then be integrated with a website and gives you the ability to take payments online, which is essential if you own an eCommerce business. 

As a customer makes a payment online, the payment gateway will send the information to the processor and allow for the transaction to be completed.

With a payment gateway, you can process online payments, but you need a virtual terminal if you need to be able to enter the information into the system yourself.

Which do you need? 

This really depends on what capabilities you need to operate your business. If you are primarily working online, then a payment gateway will be essential to process transactions that happen on your website.

If you need to enter card details to take payments when the customer is not physically with you, you’ll need a virtual terminal. A good example of this is if you need to take deposits for a booking over the phone.

How do you get one?

You can get virtual terminals either on their own or as a part of a larger payment processing solution package. If you know that you will need both a virtual terminal and a payment gateway, for example, it will be worth finding a provider that can do both, so you don’t have to work with multiple different companies.