Merchants operating e-commerce websites require a platform where their customers have the ability to pay for goods and services without having to use solid money. This is where the idea of payment gateways and virtual terminals evolved. This service has offered virtual merchants the ideal platform to conduct business fast and securely.

First, what is the difference between a payment gateway and virtual terminal?

Both services accept card-not-present transactions. This means that both take monetary cards such as MasterCard, Visa, Discover, etc. However, this article will distinguish the two appropriately.

A payment gateway is a service that links a merchant’s customer to the processing bank payment system. This service is used by the merchant’s customers make purchases by filling in their monetary card details when purchasing a good or service online without the interface of the merchant.

A virtual terminal, on the other hand, works just likes a payment gateway only that the merchant is present. This service gives the virtual merchant direct access to the processing bank payment system. This access allows him to make a payment on behalf of his customer using his customer’s card details. These details are usually given to him through telephone, fax or even email.

How does the virtual terminal work?

Most payment gateway services have the option of activating the virtual terminal service. Both services run in the same order only that in the case of virtual terminal, the customer is only involved in handing over his/her information to the merchant.

The money transfer process begins when information is entered into the browser by the virtual merchant and the information is submitted.

The gateway then takes the information, encrypts it for security purposes (against hackers) and sends it to the processor bank for authorization. Authorization involves checking whether the card details are existing under the name submitted and whether the amount of money requested is available.