Virtual POS

A virtual point of sale (VPOS) is any software system which allows for the business transfer of money without the use of physical currency nor card readers.^[1] Online payment is increasingly common, especially since 2020 due to spending behavior changes occurring during the pandemic.^[2] According to the US Census Bureau, 16.2% of total retail sales in the first quarter of 2025 were through online e-commerce systems.^[3]

These systems are widely used across industries, from small businesses to global retailers.^[4]^[5]

History

The use of the internet to sell products predates VPOS systems; customers would have to use non-digital payments to purchase things shown online.^[6] The first use of the internet to sell a product in a legitimate capacity was likely in 1994, with the sale of a CD by Sting via NetMarket.^[6]^[7] The transaction used encryption to send the customer's card information securely.^[6]

Advantages

The use of a VPOS system can potentially benefit a business. Integration into a greater e-commerce arrangement allows for small business owners to engage in business entirely online, sidestepping a need for a physical presence. Etsy, a website with an emphasis on the sale of self-made crafts such as those created by self-employed artisans, reported having 8 million active sellers in 2024.^[8]

Disadvantages

While online transactions are normally seen as extremely convenient,^[2] they possess some drawbacks compared to more conventional systems.

Using online resources to process card information can often incur a fee or penalty, which the merchant must pay on each transaction. For example, as of August 2025, commercial transfers between United States accounts using PayPal incur a fee between 2.29% and 4.99%.^[9]

The use of the internet to transfer card information also invokes a significant cybersecurity risk.^{[citation needed]}