9 things to check when choosing a virtual POS

If you look only at the commission rate when choosing a virtual POS, you see only part of the cost and risk. This article covers the Turkish market and Turkish regulation. Before deciding, get clarity on nine points: whether the provider is a bank or a payment institution authorized by the Central Bank, how the commission is structured, when the money reaches your account, who bears the cost of installments, 3D Secure support, the merchant category code (MCC) assigned to your business, refund and dispute processes, technical integration, and the fixed fees and termination terms in the contract. In this article we go through what to ask about each one. We do not compare rates or providers; terms vary by provider and business and are updated frequently.

1. Who is the provider: a bank or a licensed payment institution?

You can get a virtual POS directly from a bank, or use one through a payment institution. Both are within the legal framework, but that framework is well defined: under Article 13 of Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions, payment service providers are banks under Law No. 5411, electronic money institutions, payment institutions and PTT (Posta ve Telgraf Teşkilatı A.Ş., the Turkish postal service). The same article states that no one else may provide payment services.

Under Article 14 of the Law, a payment institution may operate only if it obtains permission from the Bank; the Law uses "Bank" to mean the Central Bank of the Republic of Turkey (TCMB) (Art. 3). According to the Central Bank, this regulatory and supervisory authority was taken over from BDDK (the Banking Regulation and Supervision Agency) by Law No. 7192 and passed to TCMB as of January 1, 2020.

The choice between a bank and a payment institution usually comes down to the application process, the documents required, ease of setup and extra services (payment links, ready-made plugins, installments with different cards from a single panel). Weigh which one suits you together with the points below.

2. Commission structure: what is behind the rate?

The rate shown in the offer may be only part of the total cost. Ask line by line how the commission is built:

• Besides the percentage commission per transaction, is there a fixed fee per transaction?
• Are single-payment and installment transactions priced separately? How does the rate change as the number of installments increases?
• Does the rate depend on when the money reaches your account (the settlement period)? Is there a separate rate for earlier payout?
• Are different rates applied to foreign cards, business cards or different card brands?
• Is the commission refunded on refunds and cancellations?

Get the answers in writing and calculate a sample monthly cost based on your own sales mix (share of single payments vs. installments, average basket size). That is the only way to put two offers side by side.

3. Settlement period (time to payout)

The money from a card sale may not reach your account right away. The provider may hold the amount for a certain period and then transfer it; this is called the settlement or holding period. For a business with tight cash flow, this period is as important as the commission rate.

• For single payments, how many days until the money reaches your account?
• For installment sales, is the amount transferred at once or installment by installment?
• Is the transfer automatic, or do you have to request it? What happens on weekends and public holidays?
• In which cases can the provider hold the payment longer on the grounds of risk assessment?

4. Installment options: who bears the cost?

Installments make the decision easier, especially for high-value sales, but they come at a cost. Either you absorb that cost, or you build it into the price and have the customer pay it. Ask the provider: with which cards and up to how many installments can you sell, can the installment cost be passed on to the customer, and can the customer see the total amount for each installment option on the payment page?

There is also a legal limit on installments in Turkey. According to the document "Credit Card Installment Limits and Prohibitions" published by BDDK, under paragraph seven of Article 26 of the Regulation on Bank Cards and Credit Cards, the installment periods allowed for credit card purchases vary by goods and services group, and installments are not allowed at all for some spending groups such as food, fuel and telecommunications. Because these limits change from time to time by Board decisions, check the current text and have your provider confirm what is possible for your product group.

5. 3D Secure support

3D Secure is the extra step in an online card payment in which the card-issuing bank verifies the cardholder's identity. During payment, the customer usually enters a one-time code sent by their bank or approves the transaction in the bank's app. This step makes transactions with stolen card details harder.

What to ask: does the virtual POS use 3D Secure for all transactions, or can some transactions be accepted without verification? If an unverified transaction is later disputed, who is liable? Does the payment page display the verification step smoothly on mobile devices?

6. MCC: which category is your business assigned to?

The MCC (Merchant Category Code) is the code card networks use to classify merchants by type of business. Visa's merchant data standards manual defines the MCC as a four-digit number assigned to describe a merchant's primary business. According to the same manual, this data is used for purposes such as activity tracking, reporting and risk management, and assigning the correct MCC to each merchant is the responsibility of the institution that signs the merchant agreement (a bank or payment institution).

This code may look like a detail you never see, but it matters. If your business is assigned a category different from its actual activity, some transactions may get caught in the risk assessments of card-issuing banks. When applying, ask your provider which category will be assigned to your business, which one will be used if you have more than one line of business, and whether that category affects the installment options you can offer.

7. Refunds, cancellations and disputes (chargebacks)

Cases where a sale is reversed are the least discussed yet most time-consuming side of a virtual POS. Distinguish three separate situations:

• Cancellation: The transaction is reversed before it enters settlement. Can it be done within the same day, from the panel or via the API?
• Refund: The amount of a completed sale is sent back to the customer, in part or in full. Are partial refunds possible, how do refunds work for installment sales, and is there a separate fee for refunds?
• Dispute (chargeback): The cardholder disputes the transaction through their own bank and asks for the money back. How and how quickly are you notified, how much time do you have to submit documents, is there a fee per dispute, and is the amount held while the dispute is ongoing?

In disputes, having documents that prove delivery at hand (a shipment tracking number, a signed delivery receipt, correspondence showing the service was provided) makes things easier. Make it a habit from the start to store these documents linked to the sale.

8. Technical integration: API, plugins, payment links

Even the virtual POS with the best terms is useless if it cannot connect to your website or workflow. Ask according to your sales channel:

• Website or app: Is there a documented API and a test environment? Is a ready-made plugin offered for the e-commerce platform you use?
• Sales without a website: Can you send a payment link to a customer you reached an agreement with by phone, on WhatsApp or in person? Can the link offer installments, and can you set how long the link is valid?
• Accounting and reporting: Can the transaction list be exported, and is it easy to match which payment belongs to which invoice?

Collobr integrates with the virtual POS services of various banks and payment institutions; you can send your customer a payment link with installments. The CRM and quote modules are on the same platform.

9. Contract terms: fixed fees, minimums, termination

Before signing the contract, read every fee and obligation other than the rate, one by one:

• Is there a setup fee, or an annual or monthly fixed usage fee?
• Is there a minimum monthly transaction volume or minimum commission requirement? What happens if the volume is not reached?
• How long is the contract, does it renew automatically, and is there a notice period and a penalty for termination?
• Can the provider change commission rates and fees unilaterally? How, and how far in advance, are you notified of changes?
• When the contract ends, how long are pending amounts held before being transferred to your account and to cover possible disputes?

Ask in writing about any clause you do not understand before signing. If the contract text differs from what was said in the sales meeting, the text you signed is what counts.

Summary checklist

1. Is the provider a bank or a payment institution on the TCMB list?
2. How is the commission built: percentage, fixed fee, installments and card type?
3. How many days does it take for the money to reach your account, and how?
4. Who bears the installment cost, and are installments possible in your product group?
5. Is 3D Secure used for all transactions?
6. Which MCC is assigned to your business?
7. Are refund, cancellation and dispute processes and fees in writing?
8. Do the API, plugins and payment links meet your needs?
9. Are fixed fees, minimums and termination terms clear?

This article is for general information only and is not legal or financial advice. For current terms, refer to your provider's contract and official sources.