Understanding how to manage online transactions is crucial for many businesses, especially those operating in high-risk sectors. That’s what a high-risk virtual terminal is for.
But what exactly is a high-risk virtual terminal, and how does it differ from the regular virtual terminals you might be familiar with?
We’ve created this quick guide to help you understand:
- The ins and outs of virtual terminals
- Why certain businesses need them
- How they function to provide secure, efficient payment processing
Scroll through for a clearer understanding of high-risk virtual terminals and how they help high-risk businesses thrive in the digital age.
What is a high-risk virtual terminal?
If you’ve ever bought something online, you’ve used a virtual terminal! It’s basically like a digital version of the card machines you see in stores.
But what about a “high-risk” virtual terminal?
Some businesses are considered “high-risk.” This doesn’t mean they’re bad—it just means they face more challenges, like higher chances of fraud or returns. These could be businesses that:
- Sell things worldwide
- Offer subscriptions
- Deal with digital products
A high-risk virtual terminal is specially designed for these businesses. It has stronger security features to combat fraud and excessive chargebacks and handle different types of payments.
In a nutshell, a high-risk virtual terminal ensures businesses can process payments safely without worrying about recurrent pitfalls.
Why are they considered high-risk?
You might wonder why some businesses are labeled as “high-risk” when it comes to online payments. It mostly has to do with security and verifying who is using a card.
When you buy something online, it’s a CNP transaction (a “Card Not Present” transaction). This means the seller can’t see the card or the person using it. It’s like taking someone’s word without seeing their ID.
Because of this, it’s harder to ensure that the real card owner is making the purchase. This uncertainty makes things risky for businesses.
To cover this risk, they often have to pay higher fees for processing these kinds of payments. Think of it like paying a bit more for a stronger lock on your door.
These high-risk processing fees help protect the business in case something goes wrong, like fraud or identity theft.
Why use a virtual terminal?
Let’s assume you have a business but no actual store where customers can walk in. Maybe you’re selling CBD online or even running a travel agency from your computer.
In that case, to process those high-risk transactions, you’d need a virtual terminal.
An online payment virtual terminal is like a cash register but on the internet. It’s perfect for businesses that operate online and don’t have a physical location.
Instead of swiping a card through a machine, you enter the payment details into a secure website. It’s really simple and super convenient for both your business and your customers.
A high-risk virtual terminal lets you accept payments from anywhere in the world, as long as there’s an internet connection. This flexibility is a big plus, especially for companies that are all about the digital world.
What types of businesses/industries can benefit from a virtual terminal?
Multiple types of businesses stand to benefit from using a virtual terminal, especially those considered “high-risk.”
They often find it hard to use regular payment methods because of the unique challenges they face.
Let’s look at some industries that can really benefit from a virtual terminal process:
- Adult industry: This includes businesses that sell adult content or products. They often face challenges with regular payment methods due to the stigmatized nature of their products.
- CBD and Cannabis: These businesses are growing fast, but they deal with lots of regulations and legal technicalities.
- Cryptocurrency: Companies dealing with digital currencies like Bitcoin are part of a new, rapidly changing industry. They need a secure and flexible way to handle money.
- Gambling: Online casinos or sports betting platforms face high risks due to the nature of gambling. A high-risk virtual terminal helps them manage these risks while accepting bets and payouts.
- E-cigarettes and Vapes: Although many have heard of a tobacco merchant account, the e-cigarette and vape industries are relatively new and are prone to recurrent changes in regulations.
- MPOS & POS systems: These are best suited for businesses that might move around (like food trucks) or have unique sales environments.
Each of these industries has its own particularities, but a high-risk virtual terminal can be a game-changer. It offers a way to process payments safely and efficiently, keeping their business running smoothly in today’s competitive business landscape.
How does a virtual terminal work?
Here’s a step-by-step breakdown of how a virtual terminal works:
- Log in: First, the business owner or staff logs into their virtual terminal account. This is done on a computer or tablet using a secure web portal.
- Enter payment details: When customers decide to buy something, they must enter their payment details into the virtual terminal. This includes the card number, expiry date, and security code. Sometimes, a billing address and full name is also required.
- Security checks: This is where the virtual terminal shines. It runs security checks to ensure the payment is legit.
- Processing the payment: Next, the terminal sends the payment details to the bank or card company. They check if the customer has enough funds available. If everything’s good, the payment is approved.
- Confirmation: Once the payment is approved, the virtual terminal shows a confirmation message. The business can then provide the service or product to the customer.
- Record keeping: The virtual terminal keeps a record of all transactions. This is super helpful for businesses to keep track of their sales and for any future needs like refunds or fraudulent transaction reports.
How do you choose the best virtual terminal?
The best virtual terminal for you is one that matches your business needs, keeps things secure, and is easy and cost-effective to use.
Here are a few of the main things you should consider.
- Security is of the utmost importance. You want a virtual terminal that keeps your and your customer’s information safe. Look for ones with strong security measures, such as encryption.
- Your chosen virtual terminal should be easy to use. You don’t want to spend hours trying to figure out how to accept a payment.
- Check for associated costs and fees. Some might have monthly fees or charge you a percentage for every transaction. Find one that fits your budget and doesn’t have hidden costs.
- Think about what features you need. Do you need it to handle many transactions, or are you looking for something simple? Some virtual terminals also offer extra features like inventory tracking or the ability to handle different types of payments.
- Good customer support is vital. Choose a service that offers great support if you encounter any problems.
Apply for a high-risk virtual terminal payment processing account
Getting a high-risk virtual terminal starts with applying for a merchant account.
If you’re looking for a great merchant service provider to help you with this, check out PayFasto, the best high-risk merchant account provider.
Our reliable debit and credit card payment gateway helps you get paid fast and securely. You can expect personalized support 24/7 and protection against chargebacks and fraudulent activity.
