How Does a Virtual POS Work?

Are you wondering whether a virtual POS system is a good fit for you and your business? It’s likely that using a virtual terminal is something that will benefit your company. And guess what? It’s ain’t rocket science!

How Does a Virtual Terminal Work?

POS (point of sale) terminals are web applications that allow you to take payments in person or over the phone. You manually input credit card information after a customer reads it out to you.

There are many business types that can benefit from a POS system because purchasing hardware isn’t necessary. A point-of-sale system is a good choice for:

  • Remote freelancers: graphic artists, web designers, writers, etc can take phone credit card orders over the phone
  • Food delivery: Allows customers to pay for the food prior to delivery
  • Professionals, such as attorneys, doctors, and accountants
  • Mechanics: Allows a customer to pay over the phone and then come pick up their vehicle after hours
  • Any delivery service will benefit from this process

Even businesses already using some sort of payment gateway (where customers add in their information themselves) can use a POS system. There are always situations arising where it’s more convenient for you to enter the customer data yourself.

What Payment Types Can a Virtual POS System Accept?

Credit card and debit card transactions are the obvious methods to use with your POS system. Some POS systems allow an add-on where you can swipe the card if you’re physically with your customer.

ACH is another form of payment you can choose to accept.

Is it Secure?

You might wonder about the security involved when taking customer data and manually adding it to your virtual terminal.

A POS system is a PCI compliant and secure method for accepting and processing customer credit cards. There is a data encryption process that keeps all information entered into the system secure.

Most systems also require the CVV number on the back of the card or address verification. This makes sure that your customer has the card in their hands and makes it more difficult for any online scam artists to gain access to information.

Are There Risks to Using a POS Terminal?

One of the easiest ways for sensitive information to get in the wrong hands comes from writing customer information down on paper or storing it somewhere within your office.

Make sure employees know to never do this. Information should be read over the phone and entered directly into the POS system. You are creating a risk to your business if you or employees store credit card numbers on software that isn’t PCI compliant. That’s just being silly, right?

Scammers target small businesses and look for vulnerable systems holding credit card information. You can be held liable for credit card fraud if you’re storing this information anywhere other than entering it directly into your virtual terminal software.

Be aware that chargebacks are harder to fight when information hasn’t been captured via a swipe from the card. Customers might forget they purchased, become unhappy or simply change their minds and request a chargeback from the credit card company.

Mitigate chargebacks by keep communication open between you and the customer. Quality customer service is a great way to help avoid these situations. It’s also a lot more fun to actually have fun with your customers!

Should You Use a POS System?

Like we said above, this isn’t rocket science. If you have a relatively lower volume of sales (such as a freelancer working with a few clients each month) or you take orders over the phone (such as a delivery service), then using a virtual POS system is an easy decision.

Even if most sales come from your payment gateway where your customers enter their information, you might occasionally want the benefits of a POS system. For example, you’ll have the ability to take the occasional phone order or allow a client to make a payment remotely…and they’ll love you for it.

The bottom line is that using a POS system will keep you in compliance with all PCI guidelines and lessen the chances of fraud. Everything is encrypted and you’ll always feel safe taking customer payments. Go get one set up now.