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What are virtual terminals and how do they work?
Virtual terminals are online platforms that allow businesses to process customer payments. They work by a business owner or staff member manually entering customer credit and debit card information to process a payment.
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Mobile Point of Sale (mPOS) systems are revolutionising the way businesses handle transactions, offering flexibility and convenience by turning smartphones and tablets into fully functional sales terminals. This technology is useful to anyone who regularly accepts or processes payments, so read along if that sounds like you. But first, what does a POS system do?
Put simply, POS stands for Point of Sale. A POS system is the hardware and software that allows businesses to manage sales transactions and accept various payment methods. It has a credit card reader to accept payments so both businesses and customers can go through the checkout process efficiently when making purchases in store. POS systems come in all shapes and sizes, so in this blog we'll explain all there is to know about mobile point-of-sale (mPOS) systems to help you streamline your payment process.
The benefits of using a virtual terminal for businesses
Virtual terminals are convenient because they can be accessed from any internet-connected device, and they’re typically less expensive than traditional EFTPOS terminals and card machines. In addition, virtual terminals offer several features that can benefit businesses, such as the ability to process multiple types of payments, track customer purchase history, and generate detailed reports.
The security risks associated with virtual terminals
Unfortunately, virtual terminals are not a secure method of accepting payments. Since staff members manually enter the customer's card information, there is an increased risk of errors and fraud. Typically, customers can be apprehensive to give their credit or debit card information over the phone - especially if they don't know the business well.
In addition, customers’ data is at risk of being stolen if the terminal has not been encrypted correctly. Finally, businesses are open to potential lawsuits if their customer’s card details are stolen due to the lack of secure payment processing.
How to protect your business against these risks
To ensure that transactions remain safe and secure, businesses need to choose a payment processor that uses PCI-compliant technology and provides encryption services, such as tokenization. By choosing a trusted provider with an established track record, businesses can reduce the risk of fraud and data theft.
In addition, businesses should ensure that their staff is properly trained to process payments securely and accurately. Staff members should be aware of the risks associated with using virtual terminals, as well as the importance of double-checking customer details before processing payments.
Even if these steps are followed, businesses may still run into the issue where customers are not comfortable giving their sensitive card information over the phone, or by sending it in on a physical document.
Due to recent large-scale data breaches of Optus and Medibank customers are beginning to be even more concerned as to where their credit and debit card information is being stored.
What are the Advantages of a Mobile POS System?
Here’s some key advantages of a mobile POS system. For more points, read our article on the 7 key benefits of mPOS devices.
- Mobility and Flexibility: Unlike traditional countertop POS systems, an mPOS system is portable, allowing businesses to move the terminal to wherever the customer is, enhancing the customer experience by reducing wait times and enabling more personalised interactions.
- Ideal for Businesses without Permanent Locations: The portability of mobile POS systems makes them perfect for pop-up shops, food trucks, and vendors at fairs or markets. Even service-based businesses like home repair or cleaning services can process transactions on-site without the need for complex setups
- Supports Multiple Payment Methods: Mobile POS devices can handle various payment options, such as contactless credit or debit cards, mobile wallets like Apple Pay and Google Pay, and even QR code payments, providing customers with better service and convenience.
- Industry-Specific Features: Some mPOS solutions are tailored to the needs of the food and beverage industry, allowing orders to be sent directly from servers to kitchens or enabling customers to place their own orders at the table.
- Lower Investment Costs: Compared to full-size POS terminals, mPOS systems require a lower initial investment, making them an affordable option for small businesses with limited budgets looking to quickly start taking payments.
- Enhanced Security: Mobile POS systems are designed with secure payment processing in mind. They handle the entire transaction within the mPOS terminal, ensuring no sensitive data is stored elsewhere, which enhances security and reduces risks for small businesses.
Alternatives to virtual terminals that are just as secure and offer more benefits
Whilst virtual terminals can be a decent option for businesses that want to accept credit card payments, other options offer the full functionality of a virtual terminal with more benefits for the business and its customers.
A more modern solution for businesses would be to use QR codes and payment links to accept payments from their customers. When using a QR code payments provider like Pebl, business owners and their staff can request payments from their customers by sending them a URL via SMS, Email, Facebook Messenger, WhatsApp or any other preferred messenger service. The customer can click the link to be taken to a secure checkout, where they can pay by their preferred payment method including Apple Pay and Google Pay - from the privacy of their phone.
A QR code payments provider like Pebl is a great alternative for businesses that take payments in-person or over the phone and would like to give their customers more confidence and options when making payments.
If you have e-commerce functionality on your website, a great alternative would be using a payment gateway. Payment gateways provide businesses with a secure way to accept payments online. They also offer additional features like fraud prevention and customer management tools.
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