Virtual Terminal: What It Is, Fees and Best Providers
What a virtual terminal is, how card-not-present payments work, typical fees (Square 3.5% + 15¢), PCI rules, fraud checks and how to pick a provider in 2026.
Quick answer: A virtual terminal is a secure web page from a payment provider that lets you accept card payments by typing the customer's card details into a browser, with no card reader. It is used for phone, mail and email orders. Because the card is not present, fees are higher than tapped or inserted payments, for example 3.5% + 15¢ per transaction at Square.
If customers call to pay, mail in order forms or ask you to charge a card on file, a virtual terminal turns any computer into a card machine. It is simple to set up, but card-not-present payments cost more, carry more fraud risk and come with security rules. This guide explains how a virtual terminal works, what it costs with a worked example, which providers offer one, and how to use it safely.
What is a virtual terminal?
A virtual terminal is a browser-based interface, provided by a payment processor or gateway, where an authorized user enters card details to charge a customer. Behind the scenes it sends the transaction through the same networks as any card payment: from the gateway to the processor, through the card network (Visa, Mastercard, American Express, Discover), to the cardholder's issuing bank for approval.
Typical features include:
- Manual entry of card number, expiration date, CVV and billing address.
- Card on file, where a saved card is stored as a token for future charges.
- Recurring or scheduled payments.
- Email or SMS receipts.
- Refunds and voids.
- Multiple user logins with permissions.
- Some support ACH payments as well as cards.
When should a business use a virtual terminal?
| Situation | Virtual terminal a good fit? | Better alternative |
|---|---|---|
| Customer calls to pay an invoice | Yes | Send a payment link so they enter details themselves |
| Mail-in order forms with card details | Yes | Online order form |
| Charging a deposit or balance on a card on file | Yes, with written authorization | Autopay through a payment portal |
| Customer standing in front of you | No, costs more and riskier | Card reader or tap to pay on a phone |
| Large B2B invoices | Possible, but fees add up | ACH or pay by bank |
Service businesses such as contractors, law firms, medical offices, B2B wholesalers and nonprofits taking phone donations are the most common users. For in-person sales, our guides to card readers for small business and tap to pay on iPhone cover cheaper options.
How much does a virtual terminal cost?
Keyed transactions are classed as card-not-present, which carry higher interchange (the fee paid to the card issuer) because fraud risk is higher. Providers pass that on in their pricing. Typical cost elements are:
- Per-transaction fee: a percentage plus a fixed amount.
- Monthly fee: some gateways charge a monthly gateway or virtual terminal fee.
- Setup or PCI fees: more common with traditional merchant accounts.
- Chargeback fees: charged per dispute.
As a concrete reference, Square's help center lists 3.5% + 15¢ for payments entered manually in its Virtual Terminal and for card on file payments, as of October 2026 (Square fees FAQ). Other providers price keyed transactions in their own way, often either as a higher flat rate or as interchange plus a markup. Check each provider's current pricing page before signing up, and see our comparison of Stripe fees and Square invoice fees.
Virtual terminal providers to compare
| Provider type | Examples | Typical fit |
|---|---|---|
| All-in-one payment service providers | Square Virtual Terminal, Stripe Dashboard payments, PayPal | Small businesses wanting quick setup and flat pricing |
| Payment gateways | Authorize.net | Businesses with an existing merchant account or website integrations |
| POS and processor platforms | Clover, Helcim and bank merchant services | Businesses that also need in-person POS or interchange-plus pricing |
Features and pricing change, so treat this list as a starting point. If you are weighing a flat-rate provider against a dedicated merchant account, our guide to merchant accounts vs payment processors explains the trade-offs.
Worked example: what a phone payment really costs
A landscaping company takes an $800 payment over the phone. Here is how different methods compare, using published rates where stated and labeled assumptions elsewhere:
| Method | Fee calculation | Fee | Net received |
|---|---|---|---|
| Square Virtual Terminal (keyed) | 3.5% x $800 + $0.15 | $28.15 | $771.85 |
| Card payment link, customer enters details online (Stripe standard online rate, 2.9% + 30¢) | 2.9% x $800 + $0.30 | $23.50 | $776.50 |
| ACH via Square invoice at 1% ($1 minimum) | 1% x $800 | $8.00 | $792.00 |
The difference between keyed and ACH on this one payment is $20.15. At 50 such payments a month, that is about $1,000. That is why many businesses use the virtual terminal only when the customer insists on reading out a card number, and otherwise send an invoice with a payment link. Our guide to accepting ACH payments covers the bank option.
Why do card-not-present payments cost more?
Every card payment carries interchange, a fee set by the card networks and paid to the cardholder's bank, plus network assessment fees and the processor's markup. Interchange categories for card-not-present transactions are generally higher than for chip or contactless payments, because the merchant cannot verify the physical card and fraud rates are higher. Flat-rate providers fold this into a higher keyed rate. On interchange-plus pricing, you see the difference line by line on your statement.
| Payment type | How the card is verified | Relative cost and risk |
|---|---|---|
| Tap or chip in person | Card chip or device token | Lowest; fraud liability usually with the issuer for valid chip transactions |
| Customer enters card online | CVV, AVS, sometimes 3-D Secure | Middle; online fraud tools available |
| Keyed in a virtual terminal | CVV and AVS only | Highest; merchant typically bears fraud chargebacks |
Two habits lower costs: always include CVV and billing ZIP, which can help qualify for better rates and reduce disputes, and for B2B customers using commercial cards, ask your processor whether entering extra data such as tax amount and customer reference (Level 2 data) could lower interchange.
Card on file and recurring charges in a virtual terminal
Most virtual terminals let you save a card as a token and charge it later. This is useful for deposits and final balances, monthly service plans and repeat orders. Card network rules on stored credentials require the customer's agreement to store the card and clear terms for how it will be used. Put the authorization in writing, either in your service agreement or a short card authorization form, stating:
- The customer's name and the last four digits of the card.
- Whether charges are one-time, recurring on a schedule, or for future invoices as they come due.
- The amount, or how the amount will be calculated.
- How the customer can cancel the authorization.
For true subscriptions, a recurring billing tool or customer portal is usually better than manually charging cards each month. Our guide to recurring payments for small businesses compares the options.
How to choose a virtual terminal provider: checklist
- Keyed transaction rate and any monthly, gateway or PCI fees.
- ACH support in the same tool, so you can offer a cheaper option on the same call.
- Card on file and recurring billing with customer authorization records.
- User permissions for refunds and voids, plus an activity log.
- Fraud tools: AVS and CVV rules, velocity limits, alerts.
- Payout speed and any fee for instant transfers.
- Integration with your invoicing or accounting software.
- Surcharge or convenience fee support, if you plan to use one and your state allows it. See our guide to convenience fees.
How to process a virtual terminal payment: step by step
- Log in with your own user account, using two-factor authentication.
- Enter the amount and reference the invoice number in the note or description field.
- Enter card details directly as the customer reads them, never writing them down first.
- Add billing ZIP code and CVV so the issuer can run address verification (AVS) and card code checks.
- Submit and wait for approval or decline.
- Send a receipt by email or SMS.
- Mark the invoice paid in your records and apply the payment to the right customer.
- If saving the card, record the customer's authorization for future charges.
A simple phone payment script for staff
A consistent script protects both the customer and your business, and gives you evidence if the charge is disputed later:
- "Thanks for calling. Which invoice number are you paying today?" Confirm the amount due.
- "We accept bank transfer at no charge or a card. Which would you prefer?" If they choose bank transfer, send the payment link while on the call.
- For a card: "Please read the card number, expiration date and the three or four digit security code." Type each directly into the terminal.
- "What is the billing ZIP code for the card?"
- "Can I confirm you authorize a charge of [amount] to the card ending in [last four] for invoice [number]?" Note the answer and time in the payment description.
- "Where should I email the receipt?"
Never ask customers to email or text card numbers, and do not repeat the full number aloud in a shared office.
PCI compliance and fraud prevention
Any business that accepts cards must follow the Payment Card Industry Data Security Standard (PCI DSS). Businesses using only a provider's virtual terminal on an isolated computer often qualify for the shorter self-assessment questionnaire designed for this setup (SAQ C-VT), which your provider can confirm. Key rules:
- Never store full card numbers or CVV codes on paper, spreadsheets, emails or call recordings.
- Use a dedicated, updated computer for card entry where possible.
- Give each staff member a separate login and remove access when they leave.
Our PCI compliance guide covers the full list. For fraud, card-not-present transactions are where most card fraud happens, and the merchant usually bears the loss when a fraudulent keyed payment is disputed. Use AVS and CVV checks, be wary of rush orders shipped to a different address, call back on numbers you already have on file, and keep proof of authorization. If a dispute arrives, our guide on handling chargebacks explains how to respond.
Common virtual terminal mistakes
- Keying cards for in-person customers and paying card-not-present rates for no reason.
- Writing card numbers on sticky notes or order forms and keeping them.
- Charging a saved card without clear authorization, which loses disputes.
- Shared logins, which make it impossible to trace who ran a charge or refund.
- Ignoring AVS mismatches on large orders.
- Adding surcharges without following network and state rules; see our guide to credit card surcharge rules.
Virtual terminals and invoicing
A virtual terminal is a collection tool, not an invoicing tool. Send a clear invoice first, with the invoice number, due date and payment options, then use the terminal when the customer calls to pay. Put the invoice number in the payment description so you can match the deposit later. Our free invoice generator creates numbered PDF invoices, and our payment receipt template helps if you want to send a formal receipt beyond the processor's email.
A virtual terminal is a practical way to take card payments by phone or mail, as long as you price in the higher card-not-present fees and follow PCI rules. Offer cheaper options like ACH and payment links alongside it. To bill customers before they pay, our invoice generator is free, needs no sign-up and downloads a PDF built entirely in your browser.
Frequently asked questions
Is a virtual terminal safe to use?
Yes, when used properly. Reputable virtual terminals encrypt card data and store it with the provider, so card numbers do not sit on your computer. The risks come from how you handle data around it: writing card numbers on paper, emailing them, or using a shared computer with malware. Use strong passwords and two-factor login, limit user access, and enter card details directly while the customer is on the phone.
Can I take payments over the phone without a virtual terminal?
You can send the customer a payment link or invoice by text or email, which lets them enter their own card details. This is often better than taking card numbers over the phone, because the customer handles the data and you avoid some PCI scope. A virtual terminal is useful when customers prefer to read their card details aloud or when staff take orders by phone all day.
What is the difference between a virtual terminal and a payment gateway?
A payment gateway is the technology that sends card transactions from a website or app to the processor. A virtual terminal is a user interface, a web page where staff type in card details, that runs on top of a gateway. Many gateways, such as Authorize.net, include a virtual terminal as one feature alongside APIs, hosted checkout pages and recurring billing tools.
Do I need a merchant account for a virtual terminal?
Not always. Payment service providers such as Square, Stripe and PayPal include a virtual terminal-style tool under their own aggregated merchant setup, so you only need their account. Traditional gateways like Authorize.net often connect to a separate merchant account from a bank or processor. A dedicated merchant account can give lower interchange-plus pricing at higher volumes but usually takes longer to set up.
Can I save a customer's card in a virtual terminal?
Most virtual terminals let you store a card on file as a token, so you can charge it later without seeing the full number again. Card network rules require the customer's consent to store credentials and clear terms for future charges, especially for recurring payments. Get written authorization stating the amount or how it is calculated, the frequency and how to cancel, and keep it with your records.
Why was my virtual terminal payment declined?
Common reasons are a mistyped card number, expiration date or CVV, an address that does not match the issuer's records, insufficient funds, or the issuer's fraud system blocking an unusual card-not-present transaction. Ask the customer to confirm details or call their bank, then try once more. Repeated retries can trigger more declines and card network penalties, so offer another method such as ACH if it keeps failing.
Can I use a virtual terminal on my phone?
Yes. Most virtual terminals run in a web browser, so they work on a phone or tablet as well as a computer, and some providers include keyed entry in their mobile apps. For in-person sales, though, tapping or inserting the card through a card reader or tap to pay on a phone is cheaper and safer than keying the number, because the transaction counts as card-present.
Can I add a surcharge to virtual terminal payments?
In many US states you can add a credit card surcharge if you follow card network rules, which include registering in advance with your processor, disclosing it clearly, keeping it within the cap and never surcharging debit cards. Some states restrict or ban surcharges. A few virtual terminals have built-in surcharge settings. Check our surcharge guide and your provider's rules before adding one.
Invoice Creator Editorial Team
Guides on invoicing, cash flow and small-business finance from Invoice Creator, operated by Next Software Development Company. Content is reviewed for accuracy against the fields our own invoice generator produces.
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