When to Use Invoices vs. Virtual Terminal vs. Card Not Present

We have a few different ways to take payments from customers who are not standing next to you. Whether your customers are on the phone, across the country, or on the moon - either Invoices, Virtual Terminal, or manually entering card details into the Square POS app will help you get paid.


In order to help clarify when you should use the following payment types, we came up with a recap of the fees for each, a description of how it works, and why you might find yourself using each.



With Square Invoices, you can send online invoices for free and you’ll pay 2.9% + 30¢ for each invoice paid online. If your customer is a repeat buyer, you may also consider letting them save their card on file, so that they don’t have to enter their card details every time - paying with Card on File has a fee of 3.5% + 15¢.


Invoices are meant to be paid online by your customer. When you enter your customer’s email address, they are emailed a copy of the invoice and are prompted to enter their credit or debit card info. You can get started with Invoices on your dashboard.


Who should use it
We find that Square Invoices works well for people whose customers are unable to come to pay in person and for businesses that need an easy way to keep track of paid or unpaid invoices and send reminders to customers to pay invoices. You can also use the Invoices product for free as a way to track your work.


Common business types using Invoices include professional service providers like accountants, retail stores like bridal boutiques, order-based businesses like cake decorators, and healthcare & fitness providers like yoga teachers, pilates instructors, and personal trainers.


Virtual Terminal

With Square Virtual Terminal, you can enter payments via your Square dashboard and you’ll pay 3.5% + 15¢. This is the same as the card-not-present fee that you’d pay for manually entering card info into the Square Point of Sale app on your phone or tablet.


You can enter a customer’s info into Virtual Terminal, or if you have repeat customers, you can use Card on File to securely store their card information for easy access each time they authorize a payment. The fee for Card on File is the same as Virtual Terminal - 3.5% + 15¢. When you take a payment using Virtual Terminal, you can also enter your customer’s email address to make sure they get a digital receipt, so they have a record of the payment. Check out more about Virtual Terminal on your Square Dashboard.


Who should use it
Virtual Terminal works well for people who need to take payments from customers over the phone or for people who accept mail orders. With virtual terminal, you can be talking on your phone and don’t have to write down your customer’s card info, but instead can enter it directly into Square. That way their information is kept secure and you don’t have to remember to shred paper with sensitive info later.


Common business types using Virtual Terminal include professional services, home & repair businesses like plumbers & carpenters, and retail businesses who take phone orders.


Manually Entering a Transaction (Card Not Present)

The fee for manually-entering card info into the Square Point of Sale app is 3.5% + 15¢.


When you manually enter a transaction in Square POS, you’ll need to have the following information available:

  • Complete card number
  • Expiration date
  • Security code/CVV
  • Billing ZIP code

Who should use it
There are two reasons you might manually enter cards: when the customer is not present (i.e. the customer is on the phone), or when there’s not the option to swipe the card. This could be because you forgot your Square Reader, or because it’s not working (rare, but it happens now and then!) Since the fee for manually-entered transactions is higher than the fee for swiped cards, we recommend having an extra reader or two as back up. You can order Square Readers for free from your dashboard.


Almost all Square sellers end up manually-entering a card at some point. If you find yourself doing this regularly, consider using Invoices or Virtual Terminal, as one of those could be better for your business and make things a little easier for you.

Let us know if this is helpful and how we can continue to make things easier for you!

Message 1 of 10
1 Best Answer

Best Answer

Great post - thank you!

View Best Answer >

Message 2 of 10

Best Answer

Great post - thank you!

View Best Answer >

Message 2 of 10

I'm giving Square Invoices a try &  just joined this community. Info. is pretty useful so far.

Message 3 of 10
Square Community Moderator

Cool, glad Square is working out for you. Thanks for joining the Community 🙂 @WyEast

Community Moderator, Square
Sign in and click Mark as Best Answer if my reply answers your question.
Message 4 of 10

I sent an inovice to a customer, who called the following day to pay by phone. I took their card information and processed their payment using the Virtual Terminal, then marked the inovice as paid. Now my sales reports show the payment on both the invoice date and the date that I processed the payment with the virtual terminal. Is there a way to link these two together so that it correctly shows the payment only once in my sales reports?

Thank you!

Message 5 of 10
Super Seller

Unfortunately, you won't be able to change the way you paid this invoice to eliminate the double transaction. In the future, however, you can take a phone (or in person) payment for an invoice on the POS app instead of Virtual Terminal. 

From https://squareup.com/help/us/en/article/5781 (you can do invoices on Apple devices too despite what this says)

Accept payments for Invoices from the Point of Sale App

If you are using an Android device, you can complete your customer Invoices right from your Square App.

  1. Select Invoices from the navigation menu.
  2. Tap on the invoice from your list or learn how to create an Invoice on your mobile device.
  3. Tap Take Payment.
  4. Swipe, Dip or Tap your customer’s card or select a separate tender type (Card on File, Cash, Gift Card, Check or Other.)
  5. You’ll see a final screen that reads Invoice Paid after the payment completes.
  6. Your customer will automatically receive payment confirmation to the email entered for their Invoice.

Note: Invoice tipping is available and is configurable based on what platform (Android or iOS) you are using.

  • Android: If Tipping is enabled within the Point of Sale settings then customers will be able to tip for all Invoices and payments processed through the app.
  • iOS: Tipping will only be available if enabled when the Invoice is created. Point of Sale Tipping settings do not affect Invoices.

Note: Invoice payments do not support paper signatures and all card signatures will be on the device screen, regardless of whether the device setting Customer Signs on Device is disabled.

Message 6 of 10

When processing payment through the portal vs. swipe, what are the different rates based on input given at the time of sale.  For example, when I input the customers name, card number, and expiration date, it's one rate.  When I add the billing zip code and address, it's another rate.  Where can I find a breakdown of the various rates dependent upon the amount of biller information given at the time of the charge process?

Message 7 of 10
Square Community Moderator

Hi @lippyjb - the billing ZIP or address associated with your customer's payment card do not affect the fees you pay. I've gone ahead and moved your post here so you could see this great breakdown by @Kpay of our "Card Not Present" fees, as I think this will help explain what you are seeing! 

Community Moderator, Square
Sign in and click Mark as Best Answer if my reply answers your question.
Message 8 of 10

Thanks Valentina, I appriciate the extra info.  I guess my main question is am I able to process charges on the portal without having to enter the billing zip code and security code (3 digit) on back of card.  My current merchant service provider allows me to process on a portal with only adding the Name, Number, and expiration date.  The problem is they charge nearly 6% for the convienience.  

1. am I able to make portal charges with less information?


2. If so, how much more are the processing fees ?





Message 9 of 10

Hey @lippyjb, Helen here stepping in for Valentina.


You do need to enter all of the card information to process a card with Virtual Terminal: that includes the billing zip code, the expiry date and the CVV number. If it helps you can save your customer's card on file so you can quickly charge their card. Keep in mind you do need to share the authorization form with your customer and keep the signed form on file.


When use manually enter card information to Virtual Terminal or charge a saved card on file with Vritual Terminal, the per transaction fee is 3.5% + 15c. If you use Virtual Terminal and you connect a magstripe reader to your computer to swipe the card, the per transaction fee is 2.6% + 10c per transaction.


Seller Community Manager, Square

Did you find help in the Seller Community? Mark a Best Answer to help others!
Find step-by-step help in our Support Center
Message 10 of 10