Virtual POS
A merchant account opened by a bank or payment institution so that you can take card payments online.
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Why it matters
A virtual POS is the banking side of taking card payments online: a bank or payment institution opens a merchant account on your behalf. A bank's own virtual POS usually offers lower commission but the application and technical setup take longer; payment institutions offer a quick start and easy integration.
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Example
A shop whose sales are growing adds a direct virtual POS from its bank alongside the payment institution it started with. Routing high-value orders through the lower-commission virtual POS saves a noticeable amount each month.
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Common mistake
Applying for a virtual POS a week before the shop opens. Banks' review and technical setup can take a while; the application should start at the same time as the shop's preparation.
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Related terms
Related services and guides
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