What Is a Virtual Terminal? How to Take Card Payments Without Hardware
Learn what a virtual terminal is, how it handles phone, mail and invoice payments from any computer, what keyed sales cost, and how to keep them secure.
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On this page 6 sections
Key takeaways
- A virtual terminal is a secure web page for entering card payments manually, with no card reader needed.
- It's ideal for phone orders, mail orders, deposits, invoices and recurring billing.
- Keyed transactions are card-not-present, so they cost more and need extra fraud precautions.
- Complete transaction data, payment links and tight user access keep keyed payments cheaper and safer.
Not every payment happens at a counter. A customer calls in an order, a client pays a deposit over the phone, or a wholesale buyer mails in an order form. A virtual terminal lets you accept all of those payments from a computer or tablet, with no hardware required. This guide explains how a virtual terminal works and which businesses use one. It also covers why keyed payments cost more and how to keep them secure.
How a Virtual Terminal Works
A virtual terminal is a secure, browser-based payment screen provided through a payment gateway. You log in, enter the card details and amount, and submit. The transaction goes through the same authorization and settlement process as any other card payment. To see what happens after you click submit, read our step-by-step guide to how credit card processing works.
Taking a Payment Step by Step
A typical keyed transaction looks like this:
- Log in to the virtual terminal with your own user credentials.
- Enter the sale amount and, if needed, an invoice or order number.
- Type in the card number and expiration date.
- Add the CVV and the cardholder's billing ZIP code.
- Submit the payment and review the approval or decline response.
- Send or print a receipt for the customer.
Features That Come With Payment Gateways
Because the virtual terminal lives inside your payment gateway, most include tools beyond basic card entry:
- Customer and card storage using tokenization, so you can charge repeat customers without storing raw card numbers yourself
- Recurring billing for subscriptions, memberships and payment plans
- Email invoices and payment links so customers can pay securely on their own
- Refunds, voids and reporting from the same dashboard
- Optional card readers that connect to the computer for occasional in-person sales
If recurring charges make up a large share of your revenue, our guide to subscription and membership payment processing covers how to reduce failed payments and churn.
Who Uses a Virtual Terminal
A virtual terminal fits any business that takes payments when the customer and the card aren't in the room. Common users include:
- Professional services firms taking retainers and invoice payments
- Restaurants and caterers taking phone orders and event deposits (our restaurant payment processing guide covers this in more depth)
- Medical and dental offices collecting balances over the phone
- Contractors and home services billing after the job
- B2B and wholesale merchants processing orders by phone, email or mail
- Any business that needs a backup way to take payments when its main system is down
An Illustrative Example
The following scenario is illustrative. A catering company books a weekend event over the phone. The owner opens the virtual terminal, enters the deposit amount, keys in the client's card with CVV and billing ZIP, and emails a receipt before hanging up. A week later, the owner sends the remaining balance as an email invoice with a payment link, and the client pays it from home. Neither payment required a terminal. If you bill balances by invoice, our guide to net 30 payment terms and setting terms customers honor can help you choose the right due dates.
Card-Not-Present Costs: Why Keyed Transactions Are Different
When a card is typed in rather than tapped or dipped, the transaction is card-not-present. Card-not-present interchange is higher than card-present interchange because the risk of fraud is higher.
That doesn't make a virtual terminal expensive. It means that when a customer is in front of you, an in-person terminal is usually the cheaper way to take the payment.
How to Lower the Cost of Keyed Payments
You can reduce the cost of keyed transactions by entering complete data where your gateway supports it:
- Billing ZIP code on every transaction, which supports address verification (AVS)
- Additional invoice and tax details on B2B sales, which some business cards qualify for
Collecting the CVV is still essential, but it reduces fraud risk rather than interchange cost. You'll find it in the security checklist below.
How much keyed transactions affect your total cost also depends on your pricing model. Our comparison of interchange-plus vs. flat-rate vs. tiered pricing explains how each model passes those costs through to you. If you collect B2B invoice payments, see our analysis of whether your business should accept Same Day ACH.
How to Keep Card-Not-Present Payments Secure
Keyed payments put card data in your hands, so security habits matter. For phone orders specifically, see our guide on how to take credit card payments over the phone safely. Build these into your routine:
- Always collect CVV and billing ZIP, and use address verification (AVS) results to flag mismatches.
- Never write down or store card numbers on paper, in spreadsheets or in email. Use the gateway's secure customer vault instead.
- Prefer payment links so customers enter their own details, which keeps card data out of your hands.
- Limit user access and give each staff member their own login.
- Watch for red flags: rush orders to new customers, mismatched shipping and billing addresses, or requests to split one purchase across several cards.
Rule of thumb: If the customer can enter their own card details through a payment link, let them. Key in the card yourself only when they can't.
Virtual Terminal vs. Other Payment Options
A virtual terminal works best alongside your other payment tools, not as a replacement for them. Here's how it compares:
| Feature | Virtual Terminal | Countertop Terminal | Online Checkout |
|---|---|---|---|
| Hardware needed | No | Yes | No |
| Best for | Phone, mail, invoices | In-person sales | Website sales |
| Who enters card data | You (or the customer, via link) | Customer taps or dips | Customer |
| Relative cost | Card-not-present | Card-present (lower) | Card-not-present |
Many businesses use all three. A countertop terminal handles walk-in customers, online checkout handles website orders, and a virtual terminal handles everything that comes in by phone, mail or email.
Getting Started With a Virtual Terminal
Before you set one up, work through this quick checklist:
- List the payment types you take outside your store or website, such as phone orders, deposits, invoices and recurring charges.
- Decide who on your team needs access and what each person should be able to do.
- Confirm your gateway supports tokenized card storage, payment links and recurring billing if you need them.
- Plan when you'll key in a card yourself and when you'll send a payment link instead.
MannyPay offers a virtual terminal solution alongside its in-store POS systems and card terminals. If you sell online too, explore MannyPay's online payment processing options and integrations with QuickBooks, Shopify and other platforms.
Ready to compare options for your business? Request a free quote, and a MannyPay specialist will respond within one business day.
This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.
