- Highs: No monthly fee. Simple transaction rate. Straightforward process. Commitment-free.
- Lows: Refunds take up to a week to clear. Can’t record postal address during transaction.
- Use if: You want to get started quickly with phone payments without committing to a contract or monthly fees.
Virtual terminals allow you to take payments over the phone using the browser on a PC computer, Mac or mobile device such as a tablet. No other equipment is needed.
Square offers a free virtual terminal, which was unheard of before this American company arrived in the UK. You don’t even have to use any of Square’s other services – the card reader, Point of Sale system, Online Store or Invoices – to get access.
The only cost is a flat rate per payment taken through the virtual terminal. There is no contractual commitment.
Accepted credit and debit cards include Visa, Visa Electron, V Pay, Mastercard, Maestro and American Express.
Key-in transactions with Square
- Virtual Terminal through a web browser
- Key-in card entry in Square app
- Square Invoices through app or browser
- Square Online Store payments
= 2.5% per transaction,
no other costs
Square doesn’t charge for anything else, and that includes refunds and chargeback processing. Square also handles the admin side of chargebacks for free.
Because there’s a slightly higher risk of fraud for key-in card payments, you should take extra precautions in some payment scenarios – more on that below.
Compared to other virtual terminals in the UK, Square’s fees are pretty competitive:
The above costs are greater than Square’s, except for if you have a large sales volume, in which case PayPal and Worldpay can get cheaper. SumUp’s high rate is fixed regardless of transaction volume and card, and you’ll also need to have a history of using the SumUp card reader to qualify for the activation of the virtual terminal.
All it takes to set up Square’s virtual terminal is to sign up and get your bank account verified. Once you’ve added business details and clicked to sign up, you’ll have instant access to Square Dashboard features from any web browser. You don’t need to download the Point of Sale app, which is for face-to-face transactions.
Even though it takes about four days to get your bank account verified by Square, you can still process payments straight away. The money will just be held in your Square account until your bank account is connected with the Square system, after which settlement takes 1-2 days following each transaction.
Processing the phone payments really couldn’t be easier. First, you log in to your Square Dashboard in a browser. Any device with an internet browser can be used (WiFi or network connection required).
Click ‘Virtual Terminal’ in the left-hand menu of your back-office account, then the ‘Take a Payment’ button. A simple ‘Quick Charge’ page is shown by default, which is where you can just enter basic transaction details before clicking ‘Charge’.
This is what you can enter on the Quick Charge page:
- Transaction amount
- Note: add a description, note or reference for the purchase (will be visible in Square sales reports)
- Customer: attach the transaction to a customer saved your the system or add a new customer (postal address can’t be entered from this page)
- Reporting location (if you’re selling from more than one location)
- Card number
- Card expiry date
- CVV/CVV2 code (security digits on the back of the card)
- Make this a recurring payment (requires saving card details in the system under a customer profile)
Image: Mobile Transaction
The Quick Charge page only allows you to enter the most basic information.
You can can also click the ‘Itemised Sale’ tab at the top to switch to creating a bill with product details.
This page allows you to create an itemised bill, where you – in addition to the above details, but in place of the transaction total – can add individual products from your Square product library or custom items entered manually. You can add VAT/tax, discount and individual notes to each item.
Image: Mobile Transaction
Under the Itemised Sale tab, you can add products, VAT, discounts and custom product details to the bill.
After the sale is put through, you have the option to send a digital receipt via text or email (you’ll need a mobile number or email address from the customer if they ask for this) or print a receipt via a connected printer.
You can add the card details to a customer profile for recurring or future payments if the customer signs a form to grant you permission for this. Once saved, the virtual terminal will give you the option to select that customer and process the payment using the saved card details. But note: saved cards can at any time be removed by the customer through a link they receive in an email.
If you expect to offer refunds, you’ll need to warn your customers that this can take up to seven days to process. This is not that unusual for online payments, but it could cause some grief for those who did not expect such a delay.
To avoid payment issues, Square recommends taking certain precautions during customer-not-present card transactions. Although it’s not required to complete a PCI Self-Assessment Questionnaire for card-not-present merchants like some virtual terminal providers demand, you are responsible for doing your bit to minimise the risk of issues.
Chip and contactless payments are inherently safer than remote payments due to the card being processed electronically through a terminal and the customer being physically present to verify the card ownership. But you can also ask for extra details over the phone or mail order form to ensure the customer is the owner of the card.
If you need to keep a customer’s card details on file – for instance, for recurring payments – Square requires that you get the customer to sign a Credit Card Authorisation Form to help protect yourself from chargeback liability.
Image: Mobile Transaction
To save card details, you will be asked to get written permission from the customer.
This form is downloadable through the Payment Information section of the virtual terminal page, after you have ticked to save the card details to a customer profile. You need to print and complete the form and get the customer to sign this paper document, which you then keep on file for as long as you store their card details.
Square also suggests asking the customer for the cardholder’s name as written on the card and the full address of the cardholder. These can’t be included on the virtual terminal form directly, but linking the sale to a customer profile enables you to save the address after the transaction (for some reason, you can’t do this during the transaction), in order to cover yourself if there’s a chargeback claim.
Although the virtual terminal works seamlessly, it has one limitation: you can’t add a postal address from the Virtual Terminal page. You can add a new or existing customer to the transaction, but it’s only possible to edit name, email address and phone number at this point. This is an oddity, considering businesses using the virtual terminal for mail orders would need to record a postal address somewhere.
The only extra field you can add any information to during the transaction is the ‘Note’ field, but anything you enter here will be shown in your Square dashboard, sales reports and the payment confirmation your customer receives. Suffice to say, you cannot add any personal or otherwise sensitive information here.
Activate recurring payments from the virtual terminal page, if you want to automatically charge a customer the same amount on a recurring basis.
If you’re planning to use Square Point of Sale, Invoices or Online Store, you’ll benefit from the integration between all payments in your Square account. These can be analysed together or separately, and exported to Xero or Excel.
Receipts can be customised to include business logo, address, contact details, refund policy, social media links, personalised messages and more. Customers can even give feedback through the receipt, and you can monitor the responses in the Square account.
Customers can rate the merchant on the e-receipt.
Who is it best for?
Square is an easy solution for most small-business types, whether you sell in person, online or remotely. The card reader and customer-not-present payment options make it excellent as an integrated hub for all your transactions – at least until you want a more complicated virtual terminal.
Businesses travelling a lot should be aware that Square can only be used in the country they’re registered in. Similarly, UK users can only charge in GBP, not other currencies.
Having tried Square’s virtual terminal, we think it’s very efficient for immediate, user-friendly payments without contractual commitment.
While Square is great for their wide range of payment methods, it does not include options to upgrade to a more advanced virtual terminal.
Square is arguably cheaper for a small business than the virtual terminals offered by PayPal and Worldpay. SumUp offers a simple rate similar to Square’s, but the transaction cost is higher and you need to have a history of in-person transactions before SumUp can activate their virtual terminal.
Bottom line: Square Virtual Terminal is the easiest and most economical way for a small UK business to start taking phone payments.