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Virtual Terminal vs. Merchant Account: What’s the Difference?

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Credit card terms are confusing.

If you’re looking to accept credit cards on your website or process credit card payments from clients, you’ve probably come across a lot of credit card-related lingo. Between all the interchanges and category codes and dongles, things can get downright confusing. Let’s start with the basics: Merchant accounts and virtual terminals. You might think these two terms are interchangeable, but learning the difference could help you find the right kind of credit card processing system for your business.

Ok, so What is a Merchant Account?

If you want to accept credit card payments, you need a way to process the card and someplace to put the payment. The traditional way to fill those needs is through a merchant account. It’s basically a special type of bank account for businesses. The banks and other third party processing companies that offer merchant accounts agree to process credit card transactions on your behalf and deposit earnings into your account (for a price, of course).

Signing a merchant account agreement contractually binds you to pay the established fees and follow any other terms of service. Sometimes those rules can be restrictive, such as requiring a certain percentage of “card-present” transactions or charging fees if you don’t hit a certain number of transactions in a month. But they’ll usually also help sort out chargebacks and other payment disputes, and otherwise be available to help when problems arise.

How is a Virtual Terminal Different?

If you can type, you can use a virtual terminal.

A virtual terminal is a tool used to securely collect credit card information so you (or your merchant account provider) can process a credit card payment online. Think of it as the online alternative to swipe machines and card readers. You can usually log in to a virtual terminal anywhere there’s an internet connection, even through your smartphone. Once there, you just type in the credit card number and other payment info to process a payment.

Some merchant accounts now offer an online or mobile credit card processing option with a virtual terminal component (for a price, of course!), while others leave it up to you to find a virtual terminal to collect credit card info and a payment gateway company to transfer that info to your merchant account. You could potentially have three separate parties involved in every credit card transaction.

How WePay Offers the Best of Both

If that sounds rather complicated, don’t worry; it doesn’t have to be. WePay offers the best parts of old-school merchant accounts together with the ease and flexibility of a virtual terminal, all for one flat rate. Sign up online for a free WePay account and you’ll be ready to accept your first payment in minutes. You’ll also get live customer support and access to an online invoicing system. Not only will you be able to accept credit card payments anywhere. You’ll also be able to save client information, send receipts, and track payments. Get this all for one straightforward price, with no hidden fees or complicated contracts. In terms of credit card processing vocabulary, WePay means pretty darn awesome.

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