What is a Virtual Terminal?

By Phillip Parker|April 15, 2026

CPO was created by business owners to help others avoid unethical and expensive merchant account providers. To support the continued operation of this website we sell advertising to ethical... processors who have earned top marks in pricing, support, and business practices. Some of the recommendations found on this website may be paid placements.

A virtual terminal is a web-based application that allows merchants to process credit and debit card payments by manually entering card information through a computer, tablet, or smartphone—without the need for a physical card reader or POS terminal. Virtual terminals are commonly used for mail order and telephone order (MOTO) transactions, invoicing, and any situation where the customer is not physically present but provides their card details to the merchant. In 2026, virtual terminals remain an essential tool for service-based businesses, B2B companies, and any merchant that needs to accept payments remotely.

How Virtual Terminals Work

A virtual terminal is accessed through a secure web browser. The merchant logs into their processor’s virtual terminal portal and manually keys in the customer’s card number, expiration date, CVV code, and billing information. The virtual terminal then transmits this data securely to the payment gateway and processor for authorization. Once the transaction is approved, the merchant receives a confirmation and can generate a digital receipt for the customer.

Because the card is not physically present during the transaction, virtual terminal payments are classified as card not present (CNP) transactions. This classification is important because CNP transactions carry higher interchange fees and a greater risk of fraud compared to card present payments where the card is physically read by a terminal.

Key Features of Modern Virtual Terminals

Virtual terminals in 2026 offer a wide range of features beyond basic payment processing. Most platforms include the ability to set up recurring billing for subscription-based services, store customer payment profiles securely using tokenization, process refunds and voids, and generate detailed transaction reports. Many virtual terminals also support invoicing capabilities, allowing merchants to send payment links directly to customers via email or text message, which reduces the need for manual card entry and can improve security.

Advanced virtual terminals integrate with accounting software, CRM systems, and inventory management tools, streamlining business operations by automatically syncing payment data across platforms. Some also offer multi-user access with role-based permissions, allowing businesses to control which employees can process transactions, issue refunds, or view sensitive financial data.

Who Benefits Most From Virtual Terminals

Virtual terminals are particularly valuable for businesses that frequently take orders over the phone, via email, or through in-person consultations where a physical card swipe is impractical. Common users include professional service providers (consultants, attorneys, accountants), contractors and home service businesses, B2B suppliers that invoice clients, nonprofits that accept donations by phone, and any business that needs a low-cost entry point for accepting card payments without investing in dedicated hardware.

For businesses that also handle in-person transactions, many processors offer virtual terminals as part of a broader payment platform that includes physical POS hardware, mobile card readers, and e-commerce integrations. This allows merchants to manage all their payment channels from a single account.

Costs and Security Considerations

Because virtual terminal transactions are keyed-in CNP payments, they typically incur higher processing fees than swiped, dipped, or tapped transactions. Merchants should expect to pay interchange rates in the CNP category, plus their processor’s markup. Some processors charge an additional monthly fee for virtual terminal access, while others include it as a standard feature of their merchant account.

Security is a critical consideration when using a virtual terminal. Merchants must ensure that the virtual terminal complies with PCI DSS requirements, uses encryption to protect card data during transmission, and supports fraud prevention tools such as AVS (Address Verification Service) and CVV verification. Storing card information for repeat customers should only be done through PCI-compliant tokenization—never by writing down or saving raw card numbers. Choosing a reputable processor with a secure, well-designed virtual terminal platform is essential for protecting both the business and its customers.

About The Author

Phillip Parker

CPO Creator & Founder

Since 2009, I have researched over 1,000 merchant services providers and published hundreds of payment education-related articles. This work has received national recognition, and my expertise in payments is regularly sought by large media outlets such as CNN, MSN, and INC Magazine, among dozens of others.

Shortly after graduating from college, I was recruited into a sales role with a credit card processor. Only later did I realize that the so-called "training" centered on selling expensive processing agreements... layered with hidden fees and long-term contracts. In my earliest transactions, I unknowingly steered friends and family into costly arrangements after they trusted my recommendation. When I fully understood the structure of what I had been selling, I resigned immediately and committed myself to exposing those practices. That commitment became the foundation of this website.

As Has Appeared In

About Us

CardPaymentOptions.com

Established 2009

This website was launched in 2009 as a modest blog dedicated to exposing questionable marketing and pricing practices within the credit card processing industry and how they negatively impact small business owners. What began as a side project has since evolved into a widely recognized platform advocating for transparency, accountability, and ethical standards in merchant services.

Our Research Methodology

Pricing & Fees

We analyze all costs including rate structures (interchange-plus, tiered, flat-rate, etc), monthly fees, equipment costs, early termination fees, and hidden charges. This data is gathered from service agreements, statements and client feedback.

Features & Technology

Evaluation of POS systems, e-commerce integrations, mobile capabilities, reporting tools, recurring billing..., and developer resources. When possible, we directly test services and hardware. Otherwise, we rely on client feedback and public information.

You Should Also Read

Here is the abstract illustration of a cardholder using a credit card.

Merchant Account Cardholder Explained

This term refers to a person who owns and uses a credit card or debit card. The cardholder is authorized to use the card for transactions as per the agreement with the card-issuing bank. This could include buying products online, paying for services, withdrawing cash, etc.

a depiction of CVV2 credit card security

Understanding CVV2 Codes: Protecting Card Payment Transactions

For consumers, safeguarding your CVV2 code is essential in maintaining the security of your financial transactions. It is advisable to never share this code through email or over the phone unless absolutely certain of the legitimacy of the transaction and the recipient. Additionally, you should regularly monitor your bank statements and set up alerts for unusual activities, as these practices help in early detection of any potential unauthorized transactions. Covering the CVV2 code with a sticker or otherwise obscuring it can also prevent physical theft of the information. If you suspect that your CVV2 number has been compromised, contact your issuing bank immediately.

Here is the illustration depicting a Cash Reserve for a merchant account.

Merchant Account Cash Reserves Explained

A merchant account cash reserve is like a safety deposit that a bank or payment processor holds to protect itself against potential losses. When you, as a business owner, accept credit or debit card payments, you do so through a merchant account.