No one is predicting the imminent demise of the ubiquitous credit card terminal, but you could say the writing is on the wall.
The writing, in this case, is the arrival of the virtual credit card terminal, which converts a smartphone, tablet, computer, or other internet-connected device into a system for accepting credit card payments. Software-based credit card transactions benefit retailers and their customers by making payments more convenient and without sacrificing security.
Retailers planning a switch to virtual credit card terminals need to understand how the technology differs from conventional card transactions, how to avoid potential pitfalls of virtual terminals, and which virtual credit card options are the best match for their operations. These are the aspects of accepting virtual credit cards that impact a retailer’s application of the technology.
How Does Virtual Credit Card Terminals Compare to Traditional Card Readers?
Single-use hardware has become an endangered species as a result of the appification of business processes. Just as multifunction printers replaced standalone faxes, scanners, and printers a couple of decades ago, the ubiquity of smartphones, tablets, and other internet-connected mobile devices has eliminated a retailer’s need for separate receipt printers, barcode scanners, and yes, even credit card terminals. In addition, the systems support the growing number of retailers who rely solely on cashless payment systems.
Modern POS systems allow retailers to complete sales transactions using only an internet-connected device, a custom app or web browser, and a merchant credit card account.
- The virtual terminal application lets retailers accept payments via telephone, mail order, fax, email, or in person.
- The apps convert any desktop PC, laptop, tablet, or smartphone into a credit card “reader” while also supporting wireless and USB connections to a traditional credit card terminal.
- Virtual credit card terminals accept one-time or recurring payments; they’re suitable for businesses that accept only a handful of transactions each day or week, as well as retailers with high transaction volumes.
For many retailers, the most important aspect of virtual terminals is their ability to support the payment types their customers prefer.
- A modern ePOS system that accepts virtual credit cards accommodates various credit card services, including aggregators, merchant services providers, and direct processors.
- Payments can be made online, in person, or at mobile locations, and all sales records are readily accessible in real time.
- Virtual credit card terminals work with all major credit cards, debit cards, and mobile wallets such as Apple Pay and Google Pay. Customers can split payments among two or more sources, and their receipts are delivered via text or email.
How Do Virtual Credit Card Terminals Benefit Different Types of Retailers?
If your business accepts payments from customers or clients—whether it does so only a few times a year or dozens of times per hour—it can use virtual credit card terminals.
- Freelancers and contractors, including professional services and small businesses such as dog groomers or lawn care operators, can process payments from any location without requiring any face-to-face interaction with their clients.
- Restaurants can expand their reach by using virtual payment terminals to accept orders online, over the phone, or via a QSR scanner.
- Small retailers are able to lower their operating costs by replacing traditional (and expensive) credit card terminals with their virtual counterparts while still accommodating the payment methods their customers prefer.
- Large retailers can bring the cash register to the customer by deploying mobile card readers throughout their stores. The systems also put more information in the hands of store employees, which improves the quality of service they can provide to their clients.
Virtual credit card terminals require little or no setup beyond signing into your merchant account. In addition to reducing a business’s hardware costs, the systems are able to complete customer transactions more quickly than traditional credit card terminals because less information has to travel between you and your credit card services.
Virtual Credit Card Terminals: A Key Component of a Mobile POS System
The trend toward mobility in retail got a big boost following the restrictions required by the COVID-19 pandemic. An added benefit of mobile POS systems for many businesses is their ability to reach customers via a custom mobile app integrated with their cloud-based POS solution. The increasing reliance on virtual transactions means retailers can respond faster to changes in markets, technologies, and customer preferences.
- Mobile POS systems have lower startup costs and ongoing hardware and software fees than traditional POS solutions.
- Using virtual credit card terminals or wireless links to traditional terminals allows stores to complete all types of transactions from any location, including returns, discounts, refunds, and split bills.
- Sales from online, in-person, and mobile transactions are combined, so sales records and inventory counts can be tracked up to the minute.
- The systems can apply taxes before or after the subtotal, or per item (flat tax).
- Discounts and surcharges can be based on the customer’s purchase history or on the service provided, such as service fees and automatic gratuities.
In addition to speeding up transactions and accepting customers’ preferred payment methods, virtual credit card terminals take up less shop floor space than conventional credit card readers. Customers can use the store’s mobile app to get an “endless aisle shopping experience.” The systems bring retailers and their customers closer together by collecting and analyzing information about customer shopping habits and product preferences.
Recent experience has shown that resilience is the key attribute of successful retail operations, no matter their size, their markets, or the characteristics of their customers. Perhaps the greatest benefit virtual credit card terminals offer retailers is flexibility: the systems let stores adapt more quickly as markets shift and new technologies arrive. When it comes to pivoting, no industry does it better than retail.
When you partner with talech for your virtual credit card needs, we devote our time to identifying your business challenges. We use this information to work with you to apply an innovative POS solution that levels the playing field.
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