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Payment Gateway vs. Virtual Terminal

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 signing on the dotted line is important.

Payment Gateway vs. Virtual Terminal: Understanding the Differences

An online payment gateway works much like credit card terminals do at brick-and-mortar businesses.An online credit card transaction begins when a customer submits an order through either a secure hosted payment form or through an integrated shopping cart. The customer’s credit card information is encrypted and the payment makes its way to the payment gateway, which forwards the information to the merchant bank’s processor. Next the payment is processed through the credit card network and authorized by the customer’s credit card issuing bank. 

A virtual credit card terminal is another method of accepting credits. With a virtual terminal, the merchant can log into their account online to manually enter credit card sales. No additional hardware or software is required. With BluePay’s virtual terminal, you can even upload multiple transactions at once for batch processing.

Advantages of Payment Gateways and Virtual Terminals

The primary difference between a virtual terminal and a payment gateway is that a payment gateway is typically used for e-commerce transactions, which means there’s a customer-facing interface. Virtual terminals are typically used by merchants only. However, some businesses use both means of accepting credit cards.

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 order and telephone order sales, as well as off-site sales events.

If you have questions, or want to know which credit card processing solution is right for you, contact our team. We’ll help identify the best credit card processing option to suit your needs.


Welcome to the BluePay Blog!

Whether you're a small business, an enterprise corporation, a financial institution, or a software partner, we have created a series of blog posts to help you and your customers, learn more about the complex nature of payments. Take a look to learn how payments can help to simplify your business operation, and may even help to grow your revenue.

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