Difference between payment gateway and virtual POS

You have probably heard of payment gateways and virtual POS, two highly demanded e-commerce solutions. However, how do they differ? What features do they have? Which one best suits the needs of your online shop?

Find out in this post!

Payment gateway and virtual POS, how are they different?

First, the payment gateway is a service offered by a provider and it is used to authorise payments to online businesses in order to make the process easier for their customers. The virtual POS, however, is a system that allows the merchant to make electronic transactions (payments, sales, closings, among others) through credit or debit cards. However, there are POS with no additional PC required.

We summarize their main differences:

• The virtual POS focuses on electronic transactions, while the payment gateway focuses on the payment methods offered by eCommerces to its customers to facilitate the process.
• The virtual POS is equivalent to the dataphone used in physical shops to charge by credit card, while the payment gateway is an ecosystem that, in turn, can integrate the virtual POS as a payment channel.

In other words, the virtual POS is a form of payment that you offer your customer to charge a certain amount, while the gateway is the means by which consumers pay with the payment method of their choice. While the former constitutes a single payment channel, the latter is an ecosystem in which different channels and methods coexist, from mobile, link or SMS payments, to WeChat Pay payments, as an example.

In this way, the virtual POS could perfectly be part of a payment gateway, but not the other way around. However, not all payment gateways support the same payment methods or currencies. It’s important to investigate whether the one you choose suits your needs, so go ahead grab this practical FREE guide to make sure you choose wisely.

9 basic features of the Virtual POS

We don’t want you to be left wondering, so we are going to share with you the features that will allow you to quickly identify a POS:

• It allows you to make transactions through some platforms with different payment gateways.

1. It accepts payment by card once our data has been entered (Mastercard, Visa, American Express…).

• It guarantees data security and serves as an intermediary between eCommerce and the customer.
• It allows your customers to buy products quickly and easily.
• The charge is received instantly.

1. Its activity is completely online and you do not need to install any other type of program.
2. The risk of non-payment is much lower and it offers more value to your customers.
3. Increased perception of security by customers.

• Ease of payment.

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7 vital features of a payment gateway

It’s a fundamental tool to achieve all the goals you want in your online business, but let’s see what its main features are:

1. It generates trust and security, as it has strong security measures, data tokenization and complies with PSD2 regulations.
2. It reduces chargebacks that affect the operation of your online business and that cost you money (double charging, products not received, cancellation or return) while making it easier to increase conversion.
3. It streamlines the payment process for businesses, as well as offering local payment methods for customers. In this way, it increases the attraction of new domestic and foreign customers.
4. It reduces the level of credit card fraud and allows you to operate with different currencies, it all depends on the type of payment gateway.
5. It increases the control of transactions and the diagnosis of fraud risks.

• It concentrates all payment channels in a single platform.

1. It strengthens and increases your sales and improves your users’ experience.
2. It offers omnichannel experiences and implements multi-acquiring strategies, further improving conversion rates.

Would you like to have a wide variety of payment options, from Virtual POS to voice response, link, SMS and QR code charges? Make sure the option you choose meets the data protection and confidentiality requirements (SSL technology).

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What is best for my online shop, the Virtual POS or payment gateway?

In reality, there are no better or worse systems, it all depends on the real needs and circumstances of your business and your customers (country of origin, most used payment methods, needs, features, objectives, etc.). However, if you choose an advanced payment gateway, you will probably will not have to choose between the Virtual POS or the gateway, as it will already be integrated with the other methods.

Think about your customers, their needs and demographic characteristics, as well as their shopping habits. A satisfied consumer will always be the one who finds in your eCommerce the type of payment that best suits their needs, because that will generate confidence and the opportunity to return when he needs you. He will even recommend your service to others. He wants simple things, no complications.

If at the time of purchase, you do not know any of the payment methods you offer, you will most likely leave the shopping cart. That’s why the main keys to your payment methods are trust, clarity and simplicity. Tell him with facts that his money is safe, as payment is the most important moment of any purchase. 

The Virtual POS and payment gateways have some similarities, such as their online nature, but they are very different when it comes to the way they operate. Take a good look at which options you need to choose, as the success of your business is at stake.