Are virtual terminals really free? Uncovering the hidden costs

Having a variety of payment options is great for both business owners and their customers because they offer flexibility and convenience. They help businesses avoid missing sales and ensure customers have an easy payment experience.

One of these options is the Virtual Terminal, which is especially useful in our digital world. With a Virtual Terminal, business owners can accept credit card payments and other payment methods online without a physical terminal or card reader, making it a cost-effective way to expand payment options. However, while it's affordable, it's not completely free as there are often hidden costs to consider.

In this blog, we'll look at the different fees associated with virtual terminals and help you understand what to look for when choosing a provider.

Different fees associated with virtual terminals

When considering a virtual terminal for your business, it's important to understand the various fees that can be associated with these services. While the promise of a "free" virtual terminal might seem attractive, that's not usually the case. The reality often involves multiple costs that can add up in the long run and affect your bottom line. Below is a breakdown of the different types of fees you might encounter with virtual terminals.

1. Transaction fees

Transaction fees are the most common type of fee associated with virtual terminals. They're typically a percentage of each transaction processed, sometimes with an additional fixed fee or interchange fee per transaction. While some providers advertise low or no monthly fees, their transaction fees can be significantly higher, which adds up quickly for businesses with high sales volumes.

2. Monthly fees

Many virtual terminal providers charge a monthly fee for access to their services. This fee covers the cost of maintaining the software, providing customer support, and other operational expenses. Even if a provider advertises a “free virtual terminal,” it’s essential to read the contract properly to ensure there are no hidden monthly fees.

3. PCI compliance fees

Payment Card Industry (PCI) compliance is mandatory for any business accepting credit card payments. This compliance ensures that businesses follow security standards to protect cardholder data. Some providers include PCI compliance in their services, while others charge additional fees.

4. Contractual obligations

Many “free” virtual terminal offers come with contractual obligations, such as long-term commitments or early termination fees. These contracts can lock businesses into unfavorable terms, making it difficult to switch providers if better options become available.

Comparison of virtual terminal providers

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Key factors to consider when choosing a virtual terminal provider

Choosing the right virtual terminal provider is really important in determining the success of your business operations. While many providers may advertise "free" or low-cost services, the reality often includes hidden fees and contractual obligations that can strain your resources. When selecting a provider, it's essential to consider the below factors:

1. Transparent pricing

Look for providers that offer clear and competitive rates. Some providers have hidden fees or higher transaction costs that can accumulate over time. Ensure there are no monthly fees, setup fees, or PCI compliance fees, which can significantly impact your bottom line.

2. Lower transaction fees

Consider the transaction fees charged by different providers. Lower fees can be particularly beneficial for businesses with high transaction volumes. For example, Helcim offers one of the lowest transaction fees in the industry at 0.5% + 25¢, making it a cost-effective choice compared to providers like Square and Clover.

3. No long-term contracts

Flexibility is important when choosing a virtual terminal provider. Avoid providers that lock you into long-term contracts with early termination fees. The ability to switch providers without penalty ensures you can adapt to changing business needs without being tied down. For example, Clover requires a one-year contract, whereas providers like Square and Helcim do not require long-term commitments.

4. Comprehensive features

Depending on your business needs, you might be looking for more than just payment processing. Tools such as invoicing, customer management, and inventory tracking might be important in enhancing your operations. While providers like Stripe offer advanced features, they often come at higher costs or with extra fees. Instead, it's advisable to look for a provider that offers a comprehensive suite of features at a reasonable cost.

5. Included PCI compliance

Ensure that PCI compliance is included at no additional cost. This is mandatory for meeting necessary security standards and protecting customer data without incurring extra expenses. A provider like Clover charges extra for PCI compliance, while others, like Helcim and PayPal, include it at no additional cost, ensuring peace of mind and security for your business.

6. ACH as a payment option

Consider whether the provider offers Automated Clearing House (ACH) payments. ACH is a cost-effective alternative to credit card transactions, allowing businesses to process bank transfers with lower fees. This can be particularly beneficial for recurring payments or large transactions. Providers like Helcim offer ACH payment options, providing additional flexibility and savings for businesses.

7. Customer support

Reliable and knowledgeable customer support is essential for addressing any issues that arise. Some providers offer 24/7 support, but it may primarily be through bots or automated systems. On the other hand, providers like Helcim offer human customer support six days a week, ensuring that you always speak with a real person when you need assistance.

By focusing on these factors and considering providers that excel in these areas, you can choose a virtual terminal provider that aligns with your business needs, ensuring transparency, affordability, and comprehensive support.

FAQs

1. What is a virtual terminal?

A Virtual Terminal is an online tool that allows merchants to process credit card payments without needing a physical card reader. It enables businesses to accept payments remotely by manually entering the customer's card details into a secure web-based interface.

2. How does Helcim's virtual terminal differ from others?

Helcim’s Virtual Terminal offers transparent pricing with no monthly fees, lower transaction fees, included PCI compliance, no long-term contracts, and comprehensive features such as Invoicing and customer management.

3. Are there any hidden fees with Helcim's virtual terminal?

No, Helcim prides itself on transparent pricing. There are no hidden fees, setup fees, or PCI compliance fees. The transaction fees are clearly stated and competitive.

4. What types of payments can I process with a virtual terminal?

You can process various types of payments including credit and debit cards, ACH transfers, and more. This versatility makes it easy to cater to different customer preferences.

5. Do I need any special hardware to use Helcim's virtual terminal?

No, Helcim’s Virtual Terminal does not require any additional hardware. You can process payments using any device with an internet connection, such as a computer, tablet, or smartphone.

6. Can I use Helcim's virtual terminal for recurring payments?

Yes, Helcim’s Virtual Terminal supports recurring payments, making it ideal for subscription-based businesses or services that require regular billing.

7. Is there a contract required to use Helcim's virtual terminal?

No, Helcim does not require long-term contracts. This means you can use the service without worrying about early termination fees or being locked into unfavorable terms.

8. How do I get started with Helcim's virtual terminal?

Getting started is easy. You can sign up on Helcim’s website, and once your account is set up, you can start processing payments immediately. There are no setup fees involved.