TERM DEFINITION
Access Number
An access number, dialed by a modem, that lets a computer communicate with an Internet Service Provider (ISP) or some other service provider.
Account Number A number assigned to an account that identifies the issuer and type of financial transaction card.
Acquirer
A financial institution which receives electronic data from a merchant relating to a transaction and initiates that data into an interchange system
Acquiring Bank The financial institution that settles card transactions for a
merchant.
Acquiring Processor
The processor provides credit card processing, billing, reporting and settlement and operational services to acquiring and issuing banks.
Address Verification Service (AVS) The process by which a merchant verifies the address of a
cardholder as part of the authorization.
Association Any entity formed to administer and promote cards (including without limitation VISA and MasterCard).
Authorization
Approval by, or on behalf of, the issuing bank to validate a transaction for a merchant or another affiliate bank. An authorization indicates only the availability of the cardholder's credit limit at the time the authorization is requested and is not a guarantee that a transaction is valid.
Authorization Center
A department or service provider to be contacted by merchant to obtain authorization codes on card transactions from the issuing bank and which transmits such authorization to merchant via electronic equipment or by voice authorization.
Authorization Fee This is the amount of money the merchant is charged each time
they issue an authorization for a transaction.
Automated Clearing House (ACH) A processing organization networked with others to exchange
electronic transactions.
Authorization Process
The process whereby a transaction is approved by an issuing bank, authorized agent, or Visa/MasterCard/Discover/American Express on behalf of that issuer, before the transaction is completed by the merchant via telephone or terminal.
Average Ticket Size A merchant's total processing volume divided by the number of card transactions.
Bank Identification Number (BIN) The digits of a credit card that identify the issuing bank. It is sometimes the first six digits and is often referred to as a BIN.
Batch A day's worth of transactions, including sales records and credit records, to be processed by the card processor.
Batch Header Fee This is the amount of money the merchant is charged each time they batch transactions.
Batch Processing This occurs when a merchant transmits the "batch" of daily
one that is not yet "closed." To "close" a batch is to transmit the information from the merchant's location (terminal or software) to the processor.
Blue Pay A payment gateway provider.
Capture Converting the authorization amount into a billable transaction record within a batch.
Card A valid credit card or valid off-line debit card bearing the service mark of VISA, MasterCard, Discover or American Express.
Card Association MasterCard International, Visa U.S.A., Visa International and
any other association and/or network.
Card Verification Value - Visa
(CVV 2) A three-digit value printed in the signature panel on the back of a Visa card. This value is a security feature designed to crosscheck the information embossed on the card.
Card Validation Code - MasterCard
(CVC 2) A three-digit value printed in the signature panel on the back of a MasterCard card. This value is a security feature designed to crosscheck the information embossed on the card.
Cardholder The individual whose name is embossed on a valid card and any authorized user of such card.
Cash Reserve Account Days The number of days that funds will be set-aside in the reserve account.
Cash Reserve Amount Percentage The percentage of settled transactions set aside in the merchant reserve account.
Chargeback
The procedure by which a sales record or other indicia of a card transaction (or disputed portion thereof) is denied or returned to bank or the issuing bank after it was entered into the appropriate settlement network for payment, in accordance with the rules, for failing to comply with the rules including, without limitation from cardholder disputes, the liability of which is merchant's responsibility.
Chargeback Ratio
The amount of sale transactions divided by the amount of chargebacks received in any given month. This is calculated using either the item count of both or the dollar amount of both.
Credit Card Terminal
A hardware device equipped with a magnetic strip reading device utilized for processing of card transactions, typically used in a retail (face-to-face) environment.
Credit Record
All documents or the electronic record of such documents used to evidence any refund or price adjustment given by merchant to a cardholder for a previous sale transaction, which must conform to the rules. The format for each credit record must be approved by bank or supplied by processor.
Credit Report A report detailing an individual's credit history.
Demand Deposit Account (DDA)
A checking account, which must be linked to a merchant processing account to deposit funds to and debit funds from as needed.
correct individual(s) through a thorough validation process.
Discount Fee
The amount charged to merchant for processing its daily credit card transactions, which is computed as a percentage of the amount of merchant's sales records and credit records.
Discount Rate
The percentage of the total transaction amount, debit card and credit card, that is deducted from the amount deposited to the merchant account.
Doing Business As (DBA) The DBA is the name the public sees, whether on a physical storefront or on the web.
e-Commerce This is a generic term denoting business done over the web
and/or processed electronically.
Electronic Check Conversion (ECC)
ECC allows you to process checks just like credit cards. Insert the check in your check reader, and give the check back to the customer. The funds will be transferred into your account, just like credit cards. In addition, since an ECC transaction cannot "bounce", there is no risk of any bounced check fees.
Electronic Commerce Transaction
A transaction conducted over the Internet or other networks where a cardholder enters card data and transmits the data. This includes email, electronic order forms, and interactive websites.
Electronic Ticket Capture (ETC) Electronic Ticket Capture code that identifies the method that a merchant settles transactions.
Face-To-Face
A face-to-face transaction is defined as a transaction with the customer present. This is commonly referred to as a "swiped transaction".
Federal Tax ID Number This 9-digit number is assigned by the IRS for tracking business taxes.
Frequently Asked Questions (FAQ) Lists of questions and corresponding answers that are unique to
certain subject matter.
Hardware Device A device used to perform credit card transactions and is
commonly referred to as a credit card terminal.
Host This is the computer on which a web site is physically located.
Hotel Business
Merchants selling lodging and hospitality services in a face-to-face environment, who normally use conventional terminals and key or swipe their transactions.
Hyperlink
The most common form of link is the highlighted or underlined word or picture that can be selected by the user with a mouse, resulting in the opening of a file or web page.
Hypertext
A document that contains highlighted areas which when selected automatically transfer the client to a different location within the original document, or another document, image, movie or other resource.
Hypertext Mark-up Language (HTML)
Hypertext Mark-up Language, commonly referred to as HTML is a behind-the-scenes method of formatting text that is used in most web pages.
Hypertext Transfer Protocol (http) Hypertext Transfer Protocol tells computers how to communicate with one another.
Hypertext Transfer Protocol, Secure
Connection (https) This allows for secure communication between computers. See Secure Socket Layer (SSL)
Imprinter
A device used to produce an image of the raised (embossed) characters on a credit card, on a transaction slip. All merchants should have a manual imprinter for cases that demand a physical imprint. These devices are sometimes referred to as a "knuckle buster".
Independent Sales Organization (ISO) This acronym refers collectively to registered sales organizations with Visa.
Inquiry Fee
A fee imposed for all card types (MasterCard, Visa, American Express, etc.) each time an authorization is requested and/or a batch is closed.
IntegRated Point of Sale (IPOS)
This acronym refers to conventional terminals that may be set-up to communicate with like terminals owned by the same merchant. In some cases, these terminals are located at different locations and with different merchant numbers.
Interchange
The exchange of information, transaction data and money among banks. Interchange systems are managed by Visa and MasterCard associations and are very standardized so banks and merchants worldwide can use them.
Interchange Fee
The fee which is paid daily by bank to VISA, MasterCard or other association for entering sales records and credit records into their respective settlement networks.
Internet This is a large computer network that links smaller computer networks on a world-wide basis.
Internet Business
An internet business is one which processes transactions via the internet. Processing transactions via the internet means that the cardholder types their credit card information online and the transaction is processed seconds later.
Internet Merchant An internet merchant is one which processes transactions via
the Internet.
Internet Payment Gateway
A standard Internet connection for merchants and merchant aggregators (businesses that provide hosting and other e-commerce processing services for multiple merchants) to securely and reliably send and receive payment transaction messages.
Internet Service Provider (ISP) A company that provides access to the Internet.
Issuer The bank that extends credit to customers through bankcard accounts.
Issuing Bank The cardholder's bank, or the bank which has issued a card to an individual.
Java
Programming language developed by Sun Microsystems that creates code for interactive applications that is executable on web pages by web browsers.
Keyed Merchants A merchant whose transactions are keyed more than 50% of the time.
Link
On the internet and intranets, links may be either text or graphic/icons. Links enable transition from one Internet site to another or internally within a web site by clicking on the "link" with your mouse.
Mail Order/Telephone Order (MOTO)
Business
Merchants selling tangible goods or services in a non-face-to-face mail order, Internet or telephone order environment, who normally use software or conventional terminals and always key their transactions.
Member Alert To Control High-Risk
Merchants (MATCH) MATCH is an electronic bulletin board used to track people and businesses whose merchant processing accounts are reported "terminated" by acquiring banks
Merchant Person or entity named in a merchant agreement.
Merchant Category Code (MCC)
Merchant classification code that identifies the merchant by type of processing, authorization and settlement. Sometimes referred to as "SIC code".
Merchant Identification Number (MID) A unique number that is assigned by the acquiring bank to identify a merchant.
Modem An electronic device the converts computer signals into an analog signals in order to transmit data over a telephone line.
Monthly Minimum
Charge levied by the merchant bank instead of the monthly credit card volume multiplied by the discount Rate if the merchant's monthly credit card volume multiplied by the discount Rate is less than the monthly minimum.
Monthly Sales Volume (MSV)
The gross dollar amount of card sales, before return, refund, or exchange that are geneRated by merchant and processed by processor during a calendar month pursuant to a merchant agreement.
Online This word is used to indicate having a presence on the Internet
or with having access to the Internet.
Payment Gateway
The transaction processing vehicle that receives encrypted transactions from the merchant server, authenticates the merchant, decrypts the payment information, and transmits the data to the authorization and settlement networks.
Personal Identification Number (PIN)
A number or code used by an account holder in conjunction with a credit or debit card to verify the user's identity to an automated teller machine.
Pinpads A small device which a cardholder enters numeric information for authentication purposes.
Point of Sale (POS)
A location where credit card transactions are performed with the cardholder present, such as a retail store. The card is read magnetically, and the cardholder`s signature is obtained as insurance against the transaction. This is the most secure form of credit card commerce.
Processor An entity engaged in the business of processing and
nature, including but not limited to card transactions.
Products Goods and/or services sold, rented or rendered by merchant.
Qualified Discount Rate A Qualified Discount Rate is the Rate a merchant is charged when all conditions are optimum.
Real-time Refers to the rapid retrieval, processing and transmission of data
Recurring Transaction
A transaction whereby Merchant charges a cardholder's card periodically for recurring goods or services (e.g., monthly insurance premiums, yearly subscriptions, annual membership fees, etc.) which are to be delivered or performed periodically.
Refund Policy A policy that defines how Refunds are handled by the merchant
or provider.
Reserve Account
An account established at and managed by a bank for the deposit of funds received from a merchant pursuant to a merchant agreement as collateral to protect the bank against actual or contingent liability or losses (i.e. reserves) that might be incurred by bank should the merchant be unable or fail to pay chargebacks, adjustments, fees and other charges and obligations due to the bank.
Restaurant Business
Merchants selling prepared foods in a face-to-face environment, who normally use conventional terminals and swipe their transactions.
Retail Business Merchants selling goods in a face-to-face environment who normally use conventional terminals and swipe transactions.
Retrieval Request A request from the cardholder's bank to supply a copy of the sales draft usually for research of a dispute.
Reversal
A transaction from the acquirer to the card issuer informing the card issuer that the previously initiated transaction cannot be processed as instructed, i.e., is undeliverable, unprocessed or cancelled by the receiver.
Routing Number A 9-digit number that identifies an individual bank.
Sales Record
All documents or the electronic record of such documents used to evidence the sale of products through the use of cards. The format for each sales record must be approved by bank or supplied by processor.
Search Engine
A software program that searches a database and gathers and reports information that contains or is related to specified terms.
Secure Electronic Transaction (SET)
A future industry standard that will authenticate customers and merchants to ensure the safety and confidentiality of data processed over the Internet.
Secured Sockets Layer (SSL) SSL is used to encrypt and protect data on an order from an online merchants web site.
Settlement Settlement is what occurs when the acquiring bank and the
issuer exchange data or funds.
Shopping Cart A method of collecting the items chosen by a consumer for purchase from an on-line catalog.
Statement Fee Charge levied by the merchant bank for monthly reports detailing activity on a merchant account.
Swiped Merchants A merchant whose transactions are swiped more than 50% of the time.
Terminal Identification Number (TID) An identification number is used to identify a specific serial-numbered piece of equipment.
Terminated Merchant File (TMF)
Merchants with excessive charge backs can lose the ability to accept credit cards. The merchant is listed on the TMF match list that all merchant service providers have access to, and will have difficulty entering into another merchant account contract until the previous activity is resolved.
Test Transaction
A test transaction is a means for the merchant to test a
terminal that has been freshly down-loaded or changed in some way.
Ticket Another name for the sales slip or its monetary value that
results when a debit card or a credit card purchase is made.
Trade Reference A trade reference is a business that extends credit or otherwise has a business relationship with the applicant.
Transaction
The initiation of a sale inquiry, or a consummation of a sale/rental of products or of a credit to a cardholder by merchant by means of a sales record or credit record, respectively, as well as a batch closing to processor.
Transaction Fee The cost charged to Merchant on a per transaction basis.
Transit Routing Number / ABA #
A nine-digit identification number assigned to a financial institution necessary to Authenticate Automated Clearinghouse (ACH) transmissions regarding a merchant account.
Transmittal The process whereby sales records and credit records are
electronically transferred in the form of electronic records.
Travel and Entertainment (T&E)
This phrase refers to American Express (Amex) and Diners Club cards where a cardholder normally pays off the card each month.
Upload This is the process of transferring data from one computer to
another via the internet.
Uniform Resource Locator (URL) This term, as well as domain name, describes the location and access method of a resource on the Internet
World Wide Web (www) An information system using the Internet to access information stored on computers worldwide.
*The Industry Terms contained herein are for informational and reference purposes only. While every effort has been made to provide accuRate and helpful information, nothing here should be interpreted as legally binding. Many terms have multiple meanings. We have endeavored to provide the definition that is generally used in our industry.
