Certain attributes make virtual terminals different from other payment methods used by a business:
Keyed entry must be done by the merchant: In contrast with payment links, e-invoices and online checkouts where the payer enters their own card details, the business uses a virtual terminal on its own payment screen that the customer cannot access.
Stricter security protocols apply for the merchant: Due to keyed payments being more vulnerable to fraud, businesses are usually required to implement card industry standards (PCI-DSS compliance). This often comes with extra monthly/annual costs.
The customer has to communicate consent: Processing a keyed payment that the cardholder did not agree to is basically illegal. That’s why you need to get verbal consent over the phone, via a written form and/or in a message from the cardholder.
Chargebacks are more likely to occur: Because the customer is not completing the transaction, it is extra important for the business to record as many details as possible to prove the payer’s consent in order to avoid a chargeback (payment dispute).
Transaction fees are higher: Keyed card transactions are more liable to fraud, so card processors charge higher fees for them than chip and contactless payments processed electronically.
To sum up, virtual terminals involve more security rules to compensate for the lack of physical verification of a chip or contactless card. It is different from online payments by the customer (for instance, through pay-by-link or QR code), as the merchant creates and completes the transaction on their own screen.