Virtual Terminal: Complete UK Guide

What Is a Virtual Terminal?

A virtual terminal is a web-based application that allows businesses to manually enter card details and process payments without a physical card machine. Instead of swiping or inserting cards, you type customer card information into a secure browser interface.

How Virtual Terminals Work

The process is straightforward:

1. Customer provides card details over phone, email, or invoice
2. You log into your virtual terminal through web browser
3. Enter card number, expiry date, CVV, and billing information
4. Submit payment for authorization
5. Receive instant approval or decline notification
6. Funds settle to your bank account (typically 1-3 days)
7. Customer receives email receipt (optional)

The entire process takes 30-60 seconds per transaction.

Virtual Terminal vs Physical Terminal

Virtual Terminal:

• Browser-based, works on any device
• No hardware required
• Customer not present (card-not-present transactions)
• Slightly higher transaction fees (fraud risk)
• Ideal for remote payment processing

Physical Terminal:

• Requires dedicated hardware
• Customer present with physical card
• Lower transaction fees (card-present)
• Contactless, chip and PIN capabilities
• Ideal for in-person transactions

Many businesses use both – physical terminals for in-person sales, virtual terminals for phone or mail orders.

Who Needs a Virtual Terminal?

Businesses That Benefit Most

Service-based businesses: Accountants, consultants, solicitors, architects taking payment after service delivery.

Mail order businesses: Catalogue sales, direct mail retailers processing phone orders.

Telephone order businesses: Call centers, telesales operations, businesses taking bookings by phone.

Invoice-based businesses: B2B suppliers, wholesalers, manufacturers sending invoices then processing card payments.

Event organizers: Processing deposits and balance payments for weddings, conferences, exhibitions.

Tradespeople: Taking deposits over phone before jobs, processing final payments remotely.

Healthcare providers: Private clinics, dentists, therapists processing payments after appointments.

Property services: Estate agents, letting agents processing rental deposits and fees.

Subscription services: Membership organizations, gyms processing recurring payments manually.

E-commerce backup: Online businesses needing manual payment processing option when payment gateway experiences issues.

When Virtual Terminals Make Sense

Virtual terminals are ideal when:

• You regularly take payments over phone
• Customers request to pay by card for invoices
• You need to process one-off card payments remotely
• You work from multiple locations without physical terminal
• Card payments represent smaller portion of revenue (alongside bank transfers, cash)
• You need backup payment method for physical terminal failures

Virtual Terminal Features

Core Functionality

Manual card entry: Enter card number, expiry, CVV, billing address for each transaction.

Instant authorization: Real-time approval or decline notifications within seconds.

Email receipts: Automatic receipt generation and email delivery to customers.

Transaction history: View all processed payments with search and filter capabilities.

Refund processing: Issue full or partial refunds directly through the interface.

Reporting: Daily, weekly, monthly transaction reports and settlement summaries.

Advanced Features

Recurring billing: Set up automatic repeat payments for subscriptions or installment plans.

Customer database: Save customer card details securely for repeat purchases (tokenization).

Multi-user access: Multiple staff members with individual login credentials and permission levels.

Invoice integration: Link virtual terminal to invoicing software for seamless payment processing.

Mobile responsive: Process payments on smartphones and tablets through mobile browser.

Batch processing: Upload multiple transactions via CSV file for bulk processing.

Custom fields: Add order numbers, customer references, notes to transactions.

3D Secure: Enhanced fraud protection requiring customer authentication for online transactions.

AVS and CVV checks: Address verification and card security code validation to reduce fraud.

Multi-currency: Process payments in different currencies (GBP, EUR, USD).

Virtual Terminal Costs

Transaction Fees

Virtual terminal transaction fees are typically higher than physical terminal fees due to increased fraud risk with card-not-present transactions.

Standard virtual terminal rates: 2.0-2.9% + 20p per transaction

High-risk virtual terminals: 2.5-4.5% depending on industry

Comparison to physical terminals:

• Physical (card-present): 1.4-1.75%
• Virtual (card-not-present): 2.0-2.9%
• Premium: 0.5-1.5% higher for virtual terminals

The higher rate reflects increased chargeback risk when cards aren’t physically present.

Monthly Fees

Pay-as-you-go providers: £0 monthly fees (Square, SumUp virtual terminals)

Traditional providers: £0-£30 monthly gateway access fee

Enterprise providers: £30-£100 monthly for advanced features and multi-user access

Setup and Additional Costs

Setup fees: £0-£200 (often waived)

PCI compliance: £0-£150 annually (required for storing card data)

Integration costs: £0-£500 if connecting to accounting or CRM software

Chargeback fees: £15-£30 per dispute (same as physical terminals)

Refund fees: Typically £0 (though original transaction fee not refunded)

Cost Example

Business processing £5,000 monthly through virtual terminal:

Option A – Pay-as-you-go provider:

• Transaction fees: £5,000 × 2.5% = £125
• Monthly fee: £0
• Total: £125/month

Option B – Traditional provider:

• Transaction fees: £5,000 × 2.2% = £110
• Monthly gateway fee: £15
• Total: £125/month

At £5,000 monthly volume, costs are similar. Higher volumes often favor traditional providers with lower transaction percentages.

Setting Up a Virtual Terminal

What You Need

Business requirements:

• Registered UK business with business bank account
• Valid business documentation (incorporation certificate, proof of address)
• Director/owner ID and credit check consent
• Website (if processing online payments alongside virtual terminal)

Technical requirements:

• Internet connection (broadband recommended for reliability)
• Modern web browser (Chrome, Firefox, Safari, Edge)
• Device with keyboard for entering card details (laptop, desktop, or tablet)
• Email address for receipts and notifications

Application Process

Step 1: Choose provider – Compare virtual terminal providers based on fees, features, and contract terms.

Step 2: Submit application – Provide business information, director details, banking information.

Step 3: Underwriting – Provider assesses risk, checks credit, reviews business model (1-5 days).

Step 4: Approval and setup – Receive login credentials, configure settings, add users.

Step 5: Training – Learn interface, process test transactions, understand reporting.

Step 6: Go live – Start processing real customer payments.

Approval Timeline

Pay-as-you-go providers: Same day to 24 hours for standard businesses

Traditional providers: 2-5 business days for full setup

High-risk businesses: 5-10 days due to additional underwriting

Using a Virtual Terminal Safely

PCI Compliance Requirements

All businesses processing card payments must comply with Payment Card Industry Data Security Standards (PCI-DSS).

Virtual terminal PCI requirements:

• Use secure internet connection (never public Wi-Fi for processing payments)
• Maintain strong passwords and change regularly
• Log out when not actively processing payments
• Never store card details outside the virtual terminal
• Complete annual PCI compliance questionnaire
• Train staff on secure payment handling

Most virtual terminal providers handle the technical security requirements, but you’re responsible for secure usage practices.

Fraud Prevention

Card-not-present transactions carry higher fraud risk. Protect your business:

Verify customer identity:

• Confirm billing address matches card-issuing address
• Request CVV (3-digit security code on card back)
• For high-value transactions, call customer to confirm
• Check IP address matches stated location for online orders

Use fraud prevention tools:

• Enable AVS (Address Verification System)
• Require CVV for all transactions
• Set transaction value limits requiring additional verification
• Monitor for unusual patterns (multiple attempts, high values)

Document everything:

• Keep records of customer communications
• Save order confirmations and delivery tracking
• Maintain clear refund and cancellation policies
• Issue detailed receipts for all transactions

Data Protection

Never store card details: Don’t write down card numbers, save in spreadsheets, or email card information. Use virtual terminal’s secure tokenization for repeat customers.

Secure your devices: Password-protect computers and tablets accessing virtual terminals. Enable automatic screen locks after inactivity.

Limit access: Only authorize necessary staff to access virtual terminal. Use individual user accounts (not shared passwords).

Secure internet connection: Use encrypted Wi-Fi with strong passwords. Never process payments on public networks.

Virtual Terminal Providers UK

Pay-As-You-Go Providers

Square Virtual Terminal:

• Transaction fee: 2.5% + 25p
• Monthly fee: £0
• Contract: None
• Features: Email receipts, reporting, refunds, mobile access
• Best for: Small businesses, low MOTO volume

SumUp Virtual Terminal:

• Transaction fee: 2.5%
• Monthly fee: £0
• Contract: None
• Features: Basic MOTO processing, reporting
• Best for: Occasional card-not-present transactions

Zettle Virtual Terminal:

• Transaction fee: 2.5% + 25p
• Monthly fee: £0
• Contract: None
• Features: PayPal integration, reporting
• Best for: Businesses using PayPal

Traditional Merchant Account Providers

Worldpay Virtual Terminal:

• Transaction fee: Custom (typically 2.0-2.5%)
• Monthly fee: Varies by package
• Contract: Typically 1-3 years
• Features: Multi-user access, advanced reporting, recurring billing, fraud tools
• Best for: High-volume MOTO businesses

Barclaycard Virtual Terminal:

• Transaction fee: Custom rates
• Monthly fee: Varies
• Contract: 1-3 years typically
• Features: Fraud screening, reporting, integration options
• Best for: Barclays business customers

Opayo (formerly Sagepay) Virtual Terminal:

• Transaction fee: Negotiable based on volume
• Monthly fee: £20-£40
• Contract: Variable
• Features: Multi-currency, recurring payments, detailed reporting
• Best for: E-commerce businesses needing MOTO backup

Virtual Terminal vs Payment Gateway

Key Differences

Virtual Terminal:

• Manual card entry by staff
• Used for phone/mail orders
• Browser-based interface
• Lower transaction volumes typically
• Staff processes each payment individually

Payment Gateway:

• Automated customer card entry
• Integrated into website checkout
• API-based integration
• Higher transaction volumes
• Customers complete payments themselves

Many providers offer both – payment gateway for website sales, virtual terminal for phone orders.

Which Do You Need?

Virtual terminal only: Service businesses, B2B invoicing, telephone sales with no e-commerce.

Payment gateway only: Online-only retailers with no phone/mail order sales.

Both solutions: Multi-channel retailers selling online and taking phone orders. Hotels, event organizers, and businesses with varied payment needs.

Common Virtual Terminal Challenges

Higher Chargeback Risk

Issue: Card-not-present transactions have higher dispute rates than card-present.

Solution:

• Verify billing addresses match card issuing address
• Always request and check CVV codes
• Keep detailed transaction records and customer communications
• Respond promptly to chargeback notifications with evidence
• Clear descriptions on customer statements to avoid “don’t recognize” disputes

Manual Entry Errors

Issue: Typing card numbers incorrectly causes failed transactions and frustrated customers.

Solution:

• Read back card number to customer for verification
• Use copy-paste carefully when receiving details via secure email
• Double-check expiry dates (common error – entering wrong month)
• Verify CVV is correct length (3 digits most cards, 4 for Amex)

PCI Compliance Management

Issue: Maintaining PCI compliance requires annual questionnaires and security practices.

Solution:

• Complete annual PCI compliance questionnaire when reminded
• Train all staff on secure payment handling
• Never store card details outside secure virtual terminal
• Use strong, unique passwords and change every 90 days
• Log out of virtual terminal when not in use

Staff Training

Issue: New staff need training on secure payment processing and fraud prevention.

Solution:

• Create written procedures for taking card payments
• Train on recognizing fraud warning signs
• Practice with test transactions before processing real payments
• Assign individual user accounts (never share logins)
• Regular refresher training on security best practices

Virtual Terminal Best Practices

Taking Payment Over Phone

Step 1: Confirm order details and total amount with customer

Step 2: Explain you’ll process card payment and need card details

Step 3: Request card number – read back for verification

Step 4: Request expiry date (MM/YY format)

Step 5: Request CVV (3-digit code on back, 4 digits on front for Amex)

Step 6: Request billing address (for AVS verification)

Step 7: Process payment through virtual terminal

Step 8: Confirm authorization and provide transaction reference

Step 9: Send email receipt to customer

Processing Invoice Payments

Secure email method:

1. Send invoice with clear payment instructions
2. Include link to secure payment form (if available)
3. Or request customer call with card details
4. Never accept card details via standard email (insecure)

Payment link method:

1. Generate secure payment link through virtual terminal
2. Send link to customer via email
3. Customer enters card details on secure page
4. Payment processes automatically
5. Both parties receive confirmation

Record Keeping

What to document:

• Customer name and contact details
• Date and time of order
• Products/services ordered
• Transaction amount and reference number
• Card type used (Visa, Mastercard, Amex)
• Last 4 digits of card (never full number)
• Authorization code
• Delivery address (if applicable)

Retention period: Keep transaction records for minimum 6 years (UK business requirement).

Virtual Terminal Integration Options

Accounting Software Integration

Many virtual terminals integrate with accounting packages:

Xero integration: Automatic payment recording, invoice matching, reconciliation.

QuickBooks integration: Direct payment import, customer linking, automated bookkeeping.

Sage integration: Payment sync, invoice settlement, financial reporting.

Benefits:

• Eliminates manual data entry
• Reduces accounting errors
• Automatic invoice marking as paid
• Real-time financial reporting
• Simplified reconciliation

CRM Integration

Connect virtual terminal to customer relationship management systems:

Salesforce integration: Payment history visible in customer records.

HubSpot integration: Transaction tracking linked to customer journeys.

Benefits:

• Complete customer payment history
• Better customer service (see past transactions)
• Payment trend analysis
• Automated follow-up for failed payments

Booking System Integration

Hotels, event venues, and service businesses benefit from booking integration:

Functionality:

• Process deposits at booking time
• Automatic balance payment reminders
• Cancellation fee processing
• Payment status linked to booking status

Is a Virtual Terminal Right for Your Business?

Virtual Terminals Work Well For:

• Businesses taking 5-50 card payments monthly over phone
• Professional services invoicing clients then collecting card payment
• B2B businesses where customers prefer card payment to bank transfer
• Event organizers collecting deposits and balances
• Businesses needing backup payment option alongside physical terminals
• Service businesses working remotely without fixed premises

Virtual Terminals Are Less Suitable For:

• High-volume card processing (100+ daily transactions) – consider payment gateway instead
• Face-to-face retail sales – physical terminals offer lower fees
• Businesses needing instant payment (bank transfers may be faster for large amounts)
• Very low card payment volumes (1-2 monthly) – fees may not justify setup

Questions to Ask

Before setting up virtual terminal:

1. How many card-not-present transactions do we process monthly?
2. What’s our average transaction value?
3. Do we need recurring billing capabilities?
4. Will multiple staff need access?
5. Do we need accounting software integration?
6. What’s our budget for transaction fees and monthly costs?
7. Do we need multi-currency processing?

Reference Data

For comprehensive UK payment processing costs, timelines, and provider comparisons, view our complete UK payment processing data reference guide.

How We Tranxact Helps

Setting up virtual terminal merchant accounts requires understanding card-not-present processing, choosing appropriate providers, and managing fraud risk. We help UK businesses:

• Compare virtual terminal providers: We obtain quotes from multiple providers to find competitive MOTO rates
• Understand complete costs: We explain card-not-present fees, monthly charges, and total costs
• Negotiate rates: Our provider relationships often secure better rates than direct applications
• Choose right features: We assess your needs and recommend appropriate functionality
• Integration support: We advise on connecting virtual terminals to accounting or CRM systems

Our consultancy is provided free to clients – we’re compensated by providers when we refer businesses, keeping our advice independent.

Virtual Terminal – Frequently Asked Questions

What is a virtual terminal for card payments?

A virtual terminal is a web-based application allowing businesses to manually enter customer card details and process payments through a browser without physical card machines. It’s designed for mail order, telephone order (MOTO), and remote payment processing where cards aren’t physically present.

How much does a virtual terminal cost in the UK?

Virtual terminal costs include transaction fees (typically 2.0-2.9% + 20p per transaction) and monthly fees (£0-£30 depending on provider). Pay-as-you-go providers like Square and SumUp charge no monthly fees. Costs are higher than physical terminals due to increased fraud risk with card-not-present transactions.

Is a virtual terminal secure?

Yes, when used correctly. Virtual terminals encrypt card data during transmission and storage, meeting PCI-DSS security standards. However, businesses must maintain secure practices: use encrypted internet connections, never store card details outside the system, use strong passwords, and train staff on secure payment handling.

Can I use a virtual terminal on my phone?

Yes, most virtual terminals are mobile-responsive and work on smartphones and tablets through web browsers. However, manual card entry on small screens can be slower than desktop use. Some providers offer dedicated mobile apps for easier MOTO processing on phones.

What’s the difference between a virtual terminal and payment gateway?

A virtual terminal requires manual card entry by staff for each transaction (used for phone/mail orders). A payment gateway automates the process – customers enter their own card details on your website checkout. Many businesses use both: gateway for online sales, virtual terminal for phone orders.

Do I need a merchant account to use a virtual terminal?

Yes, virtual terminals require a merchant account to process card payments. Pay-as-you-go providers (Square, SumUp) include instant merchant account approval. Traditional providers require separate merchant account application which typically takes 2-5 days for approval.

Why are virtual terminal fees higher than physical terminal fees?

Virtual terminal fees are higher (2.0-2.9% vs 1.4-1.75%) because card-not-present transactions carry increased fraud risk. When cards aren’t physically present, there’s higher likelihood of unauthorized use, stolen card details, or customer disputes, so processors charge premium rates to cover this risk.

Can I accept Amex through a virtual terminal?

Yes, most UK virtual terminal providers accept American Express alongside Visa, Mastercard, and Maestro. However, Amex typically charges higher processing fees (0.5-1% additional) than other card types. Check with your provider about Amex acceptance and rates.

What happens if a virtual terminal payment is declined?

Declined payments show instant notification with decline reason (insufficient funds, expired card, incorrect details, etc.). You can attempt payment again after verifying details with customer or request alternative payment method. No fees are charged for declined transactions.

Are chargebacks more common with virtual terminals?

Yes, card-not-present transactions have higher chargeback rates than card-present due to increased fraud risk. Typical chargeback ratios: card-present 0.2-0.5%, card-not-present 0.5-1.5%. Minimize risk by verifying billing addresses, checking CVV codes, keeping detailed records, and responding promptly to disputes with evidence.

Related Payment Processing Guides

• How to Get a Merchant Account UK
• Merchant Account Fees Explained
• Best Card Machines for Small Business
• Mobile Payments UK
• Payment Processing Glossary

UK Payment Industry Resources

• UK Finance – Payment Standards
• Financial Conduct Authority – Payment Services
• PCI Security Standards Council
• Visa UK
• Mastercard UK

Process Card Payments Remotely

Need to accept card payments over phone or for invoices? We help UK businesses set up virtual terminals with competitive MOTO rates and secure payment processing.