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How a Virtual Terminal Works

Have you heard the term “virtual terminal” and wondering what it is? In basic terms, it is the way credit card processing is done on the Internet. When you have a website, for instance, that has a store where you sell goods or services, you will need a virtual terminal in order for customers to pay. You can generally use a virtual terminal for any online transaction. The technical term for this transaction is a “card-not-present transaction” as the credit card will not be used to swipe. Instead, only the information from the credit card will be used. So how does a virtual terminal work? Read on to find out:

The Basics of the Virtual Terminal

In order to use a virtual terminal, you will need to usually log into a secure website. Once you are into that site, you will be able to start entering payment information. Imagine that you sell homemade dresses on a website and a customer sent their credit card information to you via email. You will simply take all of the pertinent information from the customer, enter it into the correct field and click a button on the web page to begin the process. Within seconds, you should know if the transaction is accepted or declined and you can get the product to your customer.

The Inner Workings of a Virtual Terminal

So now that you know how a virtual terminal works on a basic level, you may wish to get a bit more detailed. Upon entering the customer’s information into the web page, that information is sent electronically to the merchant processing bank. At this point, it is sent to the issuers bank where a decision will be made as to whether there is money in the account to cover it. The information is sent back through the channels with this acceptance or denial, and you will see the results on your screen. At that point, if denied, the transaction is over. If accepted, the merchant will need to perform a process known as running the batch. This is usually performed nightly and if the only way for the money from the transaction to get into your merchant account. In most cases, the money will hit your merchant account in a day or two.

For more information on how a virtual terminal works and how you can benefit from using one, reach out to a reputable credit card processing company.


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