- Highs: No monthly fee (regardless of sales volume). Simple transaction fee. Straightforward process.
- Lows: Detailed transaction information has to be recorded separately. Receipts not intended for tax purposes. Refunds take up to 7 days to process.
- 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, Mac or any other 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 or the Point of Sale system – to use it.
The only cost is a flat transaction fee per payment you take through the virtual terminal, with no contract to commit to.
Square has a simple fee structure for all their payments. Virtual terminal payments are charged at 2.5% regardless of card type and sales volume. Other keyed-in transactions are charged the same rate through Square’s Point of Sale app and invoicing feature in the browser or app.
Card-not-present transactions with Square
- Virtual terminal through a web browser on a computer, tablet or mobile phone
- Keyed-in card entry in the Square app on a phone or tablet
- Emailing or sharing a URL for an invoice created in the app or web browser
= all at 2.5% per transaction
Square doesn’t charge anything else, and that includes refunds which are free to process. They also cover up to £250 of eligible chargebacks a month while handling the legal side of that.
Because there’s a slightly higher risk of fraud for keyed-in card payments, you should take extra precautions in some payment scenarios – more on that in the Security section further down.
Compared with the other virtual terminals available in the UK, Square’s transaction fee is competitive. Let’s compare:
- PayPal: £20 monthly fee, plus 3.4% transaction fee + fixed fee if you make up to £1,500 a month, 2.9% + fixed fee if you make £1,500.01-£6,000 a month, and lower for higher takings. Additional fees such as card interchange fee may also apply.
- Worldpay: Monthly fee from £9.95, plus transaction fees depending on plan (e.g. 2.7% + 20p for pay-as-you-go).
- SumUp: 2.95% + 25p per transaction. No monthly fees.
In all these cases, the costs are greater than Square’s, except for if you have a large sales volume, in which case PayPal and Worldpay may be cheaper. SumUp will always cost you more, since their transaction fee is fixed regardless of transaction volume or card. You’ll also need to be using SumUp’s card reader for face-to-face payments before you can qualify for using their virtual terminal.
All it takes to set up Square’s virtual terminal is to sign up with them and get your bank account verified. Once you’ve filled in your business details and clicked to sign up, you’ll have instant access to Square Dashboard features from any browser. You don’t need to download the Point of Sale app, which is mainly for face-to-face transactions.
Even though it takes about four days to get your bank account verified by Square, you can still start processing 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 your money automatically will be deposited in to your bank account 1-2 days after each transaction.
Square Dashboard is easy to navigate. Simply log in, click the Virtual Terminal link in the left-hand menu, then ‘Take a Payment’. Image: Emily Sorensen, Mobile Transaction.
Click ‘Virtual Terminal’ in the left-hand menu of your back-office account, then the ‘Take a Payment’ button. A simple page with information fields is shown. This is where you enter the following card and payment details:
- Order/transaction amount
- Reporting location, if you’re selling from more than one location
- Card number
- Expiry date of card
- CVV/CVV2 of card (security digits on the back of the card)
- Billing postcode
- Optional: add a description or note for the purchase
The virtual terminal page only allows you to enter the most basic information to process the payment, so you can have a quick checkout experience. Photo: Square.
After you’ve processed the sale, you have the option to send the customer a digital receipt via text or email (you’ll need get the mobile number or email from the customer if they ask for this) or print a receipt via a connected printer.
If you need to record the customer’s details, e.g. the home address for postage, you can do that through the ‘Customer Options’ link on the payment confirmation page (after the payment is processed). Clicking this will show you a pop-up giving you the option to either create a new customer profile which will be linked to that purchase, or link the purchase to an existing customer in your customer directory.
You can also add the card details to the customer profile for future use, if the customer signs a form to give you permission to 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 please note: saved cards can at any time be removed by the customer through a link they receive via email.
To avoid payment issues, Square recommends taking certain precautions when taking customer-not-present card transactions. Although they don’t require you to complete a PCI Self-Assessment Questionnaire for card-not-present merchants like some virtual terminal providers, you are responsible for doing your bit to minimise the risk of any issues.
Chip and contactless payments are inherently safer than remote payments, due to the card being electronically processed through a terminal and the customer being physically present to verify ownership of the card if needed. 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.
This form is downloadable through the Customer Options pop-up after a virtual terminal sale and the Add Card pop-up in the customer profile. You need to print and complete it and get the customer to sign this paper document, which you then keep on file for as long as you store their card details.
To save card details, you will be asked to get written permission from the customer.
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 in the virtual terminal form directly, but you can store them securely by linking the sale to a new customer profile, in order to cover yourself if there’s a chargeback claim.
We cannot overstate the convenience aspect of Square enough. While other virtual terminals require a subscription, complicated fees or time to go through the setup and verification process, Square is much more straightforward. As long as you know that your bank account and business are legit, you can start selling straight away after completing the sign-up pages.
If you’re planning on using Square Point of Sale or their invoicing, you’ll benefit from the integration you have between all payments in your Square account. Square aims to suit all business types, hence why they offer both a card reader for contactless, chip and PIN and swipe card transactions and customer-not-present options including invoicing and the virtual terminal.
All of these transactions can be analysed together or separately, as well as exported to Xero or Excel according to your needs.
Receipts can be customised to include your logo, address, contact details, refund policy, social media links, personalised messages, and more.
We liked the option for customers to rate you on the digital receipt.
Customers can also give feedback through the receipt, which you can monitor the responses to in your Square account.
Although the virtual terminal works seamlessly, it has some limitations. Businesses who need to record more detailed, transaction-specific information will need to add this either to Square’s customer profile directory or separately in their own documents.
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.
Items from your Square product library cannot be added to the transaction either. If you need to analyse or track stock levels of a product you’re selling through the virtual terminal, you’ll need to manually keep track of the virtual terminal sales you do for that item.
Furthermore, taxes can’t be added to the order. The receipt even states “this is not intended to be a tax invoice”, so we don’t recommend you use the virtual terminal for payments from VAT-registered businesses.
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 in getting back their money.
Businesses who travel a lot should also be aware that Square can only be used in the country you’re registered in. Similarly, UK users can only charge in GBP, not other currencies.
Having tried Square’s virtual terminal, we think it does the job of processing immediate payments in the simplest way possible. That said, if your business needs to record or track detailed transaction-specific information, it may not meet your needs.
While Square is great for their wide range of payment methods available to you, it doesn’t include options to upgrade to a more feature-rich version of the virtual terminal within the account.
Price-wise, Square is cheaper for small businesses than the virtual terminals offered by PayPal and Worldpay. SumUp offers a fixed fee structure similar to Square’s, but their fee is higher and you need to take customer-present transactions with SumUp Air before they can activate the virtual terminal for you.
We can recommend Square’s virtual terminal for small businesses who want to get started taking phone payments and mail orders as painlessly as possible. It’s really straightforward to use and fulfills the need of taking simple payments from any browser.