We hear it all the time: “Payment gateway vs. virtual terminal…what’s the difference?” The terms can definitely be confusing if you’re new to accepting credit cards. Though the two services are similar, understanding the differences before setting up your merchant account will be key to determining how your business accepts credit card payments.
A payment gateway works much like a credit card terminal at a brick-and-mortar business. Think of it as an online point-of-sale (POS) terminal. Whereas a traditional payment gateway allows merchants to accept payments for goods and services online, today’s gateway technology enables businesses to accept payments across all channels, including software integrations and POS systems.
Here’s how a payment gateway works:
The gateway notifies the merchant and the customer of the decision.
A virtual terminal is another method of accepting credit and debit cards, and even eCheck and ACH payments. Merchants can use a computer, smartphone, or tablet with an internet or data connection to securely process payments.
Here’s how a virtual terminal works:
No additional hardware or software is required, although a merchant can connect an EMV-enabled credit card reader via USB to a desktop or laptop, if they so desire.
The primary difference between a virtual terminal and a payment gateway is that a payment gateway is typically used for eCommerce transactions, which means there’s a customer-facing interface like a hosted payment form or shopping cart checkout form. Virtual terminals are typically used by merchants only. However, some businesses use both means to accept credit cards if they have a brick-and-mortar and an eCommerce presence.
Each solution offers its own advantages. A secure payment gateway allows merchants to accept credit cards, debit cards, and ACH payments online. It also enables recurring billing, accounting software integration, and more. A virtual terminal simplifies the payment process for mail and telephone order sales, as well as off-site events. And, it helps merchants save money without the need for any upfront hardware costs.
With our payment gateway and virtual terminal solutions, we can help you accept payments the way your business needs to. Contact the Clover sales team to find out which Clover or partner solution is right for you.
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