It is officially safe to say that cash is no longer king. The era when consumers walked around with coins and notes is long gone. Lately, the most significant chunk of consumer purchase is carried out with plastic and digital payment methods – and all business owners have to conform.
If you do not want your business to turn customers away and lose sales, you need to keep up with all the payment methods that customers prefer, either in person, online, or over the phone. It is the way of contemporary commerce, after all.
Thankfully, most business owners have caught on to this shift and data shows that there is an uptick in virtual terminal usage.
A virtual terminal is a system that offers solutions to the over-the-phone payment method. But how safe is this system? Is your security as a merchant guaranteed?
This article breaks down the security features of a virtual terminal to help you understand what to expect.
How secure are virtual terminals?
Understandably, security is a priority for any online transaction. As a merchant, you need assurance that payment is going to be processed safely and correctly. Hence the reason you need to find out how secure virtual terminals are.
Thankfully, virtual terminals are designed with security as the top priority. The virtual terminal system is reasonably secure and presents a low risk for both the customer and the merchant. So, you don’t have to worry that your information will leak and land in the wrong hands.
While this is the case, note the level of security highly depends on a few basic PCI measures, such as;
- Segregation of duties. e.g., giving access to only a few trustworthy employees.
- Following the proper data storage protocols.
- Using safe internet access.
All payments on a virtual terminal happen in a secure payment gateway that uses data encryption to protect customer information as the transaction is ongoing.
Most terminals also add a layer of authentication to ensure extra security. For example, an address/location of the card is recorded, or the CVV at the back of the customer card is requested to prevent fraud.
Most merchant service providers still consider the virtual terminal system riskier than EPOS systems despite its excellent security features. Their main argument is that the transaction is carried out without the customer and their card, which increases the risk of fraud, as it is hard to verify the customer’s details.
As such, the providers usually charge higher service fees for this system. The good side is that these increased charges aren’t put to waste. They are put into good use as most times, the fees go into maintenance and upgrading of the built-in fraud protection measures that ensure that the security is kept up to date.
What to Look For When Shopping for a Virtual Terminal Provider
Different virtual terminals have different security features. As a merchant, the aim is to have a virtual terminal with solid security features to ensure your business and customers are protected during transactions.
Also, depending on whether you take telephone sales only once in a while or your whole business model is based on telephone sales, combining a virtual terminal with a Bluetooth or USB-connected card reader might be beneficial. It allows you to process in-person card payments without the hassle of the traditional card payment terminals.
There are many virtual terminal service providers in the market today. However, it is hard to bestow a clear-cut best-provider title, as most virtual terminals available have almost identical features.
Your best bet is to choose a provider who best suits your business and the most favorable processing rate plans suitable for your business.
Here are some of the popular providers in the market;
- Durango Merchant Services
- CDGcommerce
- Square
- Payment Depot
- Stax by Fattmerchant
Advantages and Disadvantages of Using a Virtual Terminal?
Advantages
There are many advantages to using a virtual terminal for your business in this era. They include:
1. Efficiency
You can process payment efficiently with no customer presence. This means that a business transaction will take place no matter where you or the customer are. All you need is a device with access to the internet for you to make a sale.
2. Freedom and flexibility
The virtual terminal allows you to sell anywhere, anytime. Literally! With a virtual terminal, there is no need to be tied down to a single location. You can trade from anywhere or give access to trustworthy employees to complete the transaction on your behalf.
3. Security
Virtual terminals are secure. They use an AVS security (Address Verification System) to check customer details in real-time before the transaction is completed. In addition, it uses PCI DSS security to ensure further protection for you and your customers.
4. Get new business
The virtual terminal system gives you a chance to reach customers that would not have otherwise been able to buy from you. For example, new customers will try to reach and purchase from you from different locations when you advertise your business on social channels. The virtual terminal payment channels make it possible and efficient for both you and the customers.
Disadvantages
Like the sides of a coin, virtual terminals have their nasty side. Here are some disadvantages of virtual terminals.
1. More expensive
As mentioned above, most merchant service providers consider this payment method high risk and thus charge higher transaction fees for it. As you can guess, this cuts into your profits.
2. Increased risk of fraud
Any type of online transaction is risky, but it’s higher in a virtual terminal. For example, anyone can use another person’s card details to make a purchase online. This increases the risk of chargebacks to your business – meaning there is a higher risk of losing money through customer fraud claims.
So, Are Virtual Terminals Worth It?
Virtual terminals give you the efficiency and freedom to receive payment from customers, regardless of their physical location.
The systems are also complex and use sophisticated security software to ensure that your business and your customers are protected.
Therefore, it is worth it, especially in this era where fewer people use liquid money to purchase.
Interesting Related Article: “The Ultimate Guide to Payment Terminals: What do Small Businesses Need? “