Payment Gateways vs. Virtual Terminals

Payment gateways and virtual terminals can be confusing concepts if you’re new to the retail industry or sales in general. The two perform similar functions: they accept credit cards and other payment methods. Despite this, they aren’t identical. Here’s the difference between payment gateways and virtual terminals, and their respective advantages.

Payment Gateway

Payment gateways enable merchants to accept payments either through on-site credit card terminals or through online e-commerce forms. Payment gateways are ubiquitous in every business that has an e-commerce component. They’re typically integrated into your website as a customer-facing interface that allows for the input of payment information, etc., like in a shopping cart.

Depending on the terminal, either credit card information is manually entered on a form, or the card is swiped at a terminal. The information is encrypted and transmitted to the payment processor. The payment processor sends the transaction details to the cardholder’s bank. The bank either approves or rejects the payment depending on available funds and credit limits. The approval or rejection follows the same path back to the gateway and customer.

Virtual Terminal

A virtual terminal is an internet-based payment-facilitator that accepts credit cards and other payment media to process payments. It functions like a regular card reader, except you manually key the information into a secure website. However, you can connect a card reader to the virtual terminal to speed up the process.

The way it works is that the merchant first accesses the virtual terminal through either a payment gateway or an online account. They then input the relevant account details into the payment form. Finally, the merchant confirms and processes the transaction by clicking the ‘process’ button.

Advantages

 

Payment gateways are prevalent in most payment situations. In contrast, virtual terminals are typically used by merchants who prefer versatility in their payment terminals since they act as cloud or web POS systems. However, since many retailers and businesses have a physical and e-commerce presence, both are commonly used.

Payment gateways enable integration with other business services, such as accounting, and secure online payments. Since virtual terminals are internet-based, merchants can save on hardware costs. They also simplify some payment situations, such as telephone sales. However, both payment gateways and virtual terminals either necessitate or significantly benefit from the use of dedicated POS systems.

If you’re looking to augment your virtual terminal or install on-site payment gateways, get in touch with UIC. They offer secure payment processing solutions, including Windows Touch Screen POS Systems and unattended payment systems. Get in touch to improve your customers’ payment experience.

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