Virtual terminal (payment processing)

A virtual terminal is a software application (often a web application) for merchants which allows them accepting payment with a payment card, specifically a credit card, without requiring the physical presence of the card (“card not present transaction”). They are called “virtual” terminals in contrast to the physical payment terminals used to process card payments when the payment card is present.

Use of virtual terminals

When a customer wants to pay with a card over the phone, a virtual terminal allows the person accepting payment (such as a call centre agent) to enter the customer's credit card details to take a payment. Unlike when accepting payment with a regular payment terminal, the presence of the payment card is not required. The payment data is then automatically sent to the payment processor to handle the payment.

While the physical card must not be presented to the merchant (which would be impossible over the phone), the customer authorising the payment should still be in possession of the card. To verify this, the virtual terminal will often require the card security code to be entered, which the customer must supply.