PROCESSING PAYMENTS IS A SCIENCE
After $6 Billion in commerce and counting, we have learned a thing or two. This is white-glove merchant services; your partner in commerce & growth.
- 3-Tier PricingThe 3-Tier Pricing is the most popular pricing method and the simplest system for most merchants, although the new 6-Tier Pricing is gaining in popularity. In 3-Tier Pricing, the merchant account provider groups the transactions into 3 groups (tiers) and assigns a rate to each tier based on a(...)
- 3-D SecureA protocol for e-commerce which is designed to increase the security of online credit card transactions by adding an extra step requiring a PIN or password for authentication. Another name for the Verified By Visa cardholder authentication protocol.
- 6-Tier PricingAs a result of the Wal-Mart Lawsuit and to compete against PIN-based debit cards (which are processed outside of the Visa and Mastercard networks), Visa and Mastercard lowered the interchange rates for debit cards well below those for credit cards. Some providers can pass on the lower cost of(...)
- 12BRetrieval Request
- ABA Routing NumberA unique bank identifying number that directs electronic ACH deposits to the proper bank. This number precedes the account number printed at the bottom of the check.
- Account NumberA unique number assigned by a financial institution to a cardholder account which identifies that issuer and type of financial transaction card. This number is embossed and encoded on the plastic card.
- ACH(Also Automatic Clearinghouse) ACH is a form of epayment or electronic payment. There are two ways payments can be transferred: (1) by wire transfer, or (2) through an automated clearinghouse. Wire transfer is an e-payment system that is designed to handle high-dollar, time-crucial payments,(...)
- Acquirer or aquiring bankFinancial institution which provides the facilities and services for a business to accept credit cards as a means of customer payment.
- Additional cardholderWhen you have a credit card it is possible to add an additional card to the account for use by someone else. The main cardholder has responsibility for ensuring payments on the additional card are made. Purchases are shown on the credit card statement sent monthly.
- Address Verification SystemA method of reducing fraud in mail order, telephone order, and Internet transactions by using cardholder billing address information in the authorization request. (Checks to see that the billing address given by the customer matches the credit card.) If you opt not to use AVS, VISA and(...)
- Affinity CardAffinity cards are credit cards that are linked to organizations like charities, political parties and sports clubs. They are a good way of raising money as the organization receives a donation from the card issuer for every card taken out, and a small percentage based on the amount of money(...)
- Annual FeeSome issuers charge for the management of your credit card account. They sometimes provide access to a number of additional benefits as part of the charge. Expressed as % P.A.
- ATMAllow you to access cash with a credit card or other card associated with your bank account. You need to enter your personal identification number (PIN) into the machine to access cash.
- Audit TrailFor recording purposes, messages created as a by-product of data processing runs or mechanized operations.
- AuthenticationThe process of verifying that the user of a credit card in a particular transaction is entitled to conduct payment transactions. Eg. Signature, Verified by Visa or MasterCard SecureCode PIN or password.
- Authorization CodeA code that an issuer or its authorizing processor provides to indicate approval or denial for an authorizationauthorization request.
- Authorization feeAuthorization fee The Authorization fee (actually an authorization request fee) is charged each time a transaction is sent to the card-issuing bank to be authorized. The fee applies where the request is approved or declined. Note this is not the same as Transaction fee or Per Item fee.
- Automated Teller MachineAllow you to access cash with a credit card or other card associated with your bank account. You need to enter your personal identification number (PIN) into the machine to access cash.
- Automatic Check Handling (ACH)(Also Automatic Clearinghouse) ACH is a form of epayment or electronic payment. There are two ways payments can be transferred: (1) by wire transfer, or (2) through an automated clearinghouse. Wire transfer is an e-payment system that is designed to handle high-dollar, time-crucial payments,(...)
- Average TicketThe average dollar amount of merchant credit transactions for a given time period.
- AVSsee Address Verification Service
- Balance TransferThe process of moving an unpaid credit card debt from one issuer to another.
- Bank AccountBank account number for the merchant to which funds will be deposited.
- Bank Identification NumberThe 6 digits on the credit card assigned by the Federal Bureau of Standards that identify the card issuing institution.
- BankcardA payment card issued by a bank and accepted by merchants. The credit card is the most common form of a bank card.
- Basis PointDiscount rates are expressed as basis points. For instance, 1 basis point is expressed as .0001 or .01%
- BatchIs a collection of credit card transactions that are saved for submitting at the end of the business day.
- Batch CloseThe process of sending a batch to the financial institution for settlement.
- BINsee Bank Identification Number (VISA)Buckets
- Business Card (Business Credit Card)Usually issued to corporate executives or business owners in order to keep business expenses separate from personal charges more easily.
- Card IssuerAny association member financial institution, bank, credit union, or company that issues, or causes to be issued, plastic cards to cardholders.
- Card ReaderA device capable of reading the encoding on plastic cards. see Magnetic Stripe Reader.
- Card Verification Code (CVC2)Numeric security code that is printed on the back of MasterCard credit cards. Requiring this number on order checkouts can reduce credit card fraud and chargeback instances significantly when used in addition to AVS protection.
- Card Verification Value (CVV2)Three-digit security number that is printed on the back of most Visa credit cards. Requiring this number on order checkouts can reduce credit card fraud and chargeback instances significantly when used in addition to AVS protection.
- CardholderA person who has a credit card or debit card.
- Cash BackCash back returns to you a percentage of the total amount spent on your credit card over a specific period of time, usually monthly or quarterly. This is particularly useful if you normally pay your credit card bills in full each month, as it means you get an effective discount on the products(...)
- CBThe act of taking back funds that have been paid to a merchant for a disputed or improper credit card transaction.
- CBRA company that collects information relating to the credit ratings of individuals and makes it available to credit card companies, financial institutions, etc.
- CHA person who has a credit card or debit card.
- ChargebackThe act of taking back funds that have been paid to a merchant for a disputed or improper credit card transaction.
- Chargeback PeriodThe number of days from the transaction processing date during which the issuer may initiate a chargeback, typically a six month period.
- Check Authorization/VerificationThe confirmation that the check presentor has not been linked to excessive returns of previously written checks.
- Check GuaranteeA service that guarantees payment on each check presented. The guarantee service collects any returned items and the merchant typically follows a stringent set of procedures.
- Co-Branded CardA co-branded credit card is sponsored by both the issuing bank and a retail organisation such as a department store or an airline. Cardholders may get benefits such as discounts or free merchandise from the sponsoring merchant based on account usage and terms.
- Commercial CardsA general name for cards typically issued for business use and may include Corporate Cards, Purchase Cards, Business Cards, Travel and Entertainment Cards.
- ComplianceA process where Visa or MasterCard resolves disputes between members arising from violations of the operating regulations and verification by the member that a financial loss has occurred.
- CPSsee Custom Payment Service
- Credit Bureau ReportA company that collects information relating to the credit ratings of individuals and makes it available to credit card companies, financial institutions, etc.
- Credit cardThis is a type of bank card that can be widely used all around the world as a form of payment. The credit card holder must then reimburse the credit card company for the amount of the total sales the holder had charged on that particular credit card.
- Credit Card NumberUnique number assigned to credit card.
- Credit Card ProcessorA company that performs authorization and settlement of credit card payments, usually handling several types of credit and payment cards (such as Visa, MasterCard, and American Express). If merchants wish to sell their products to cardholders, they retain the services of one or more processors(...)
- Credit HistoryA partial profile of your financial life given within a particular time frame (usually measured in years). It shows the extent to which you pay your bills on time and how much you may owe particular parties. Credit card issuers use this information to decide whether to provide customers with(...)
- Credit LimitThe maximum amount of credit a cardholder has available to spend on their credit card.
- Customer CodeA 17 character alphanumeric field that is used with Purchase Card transactions. The code is typically defined by the customer (cardholder) and used for accounting or project tracking purposes.
- Customer Service feeThe customer service fee (also known as a maintenance fee) can be charged by some providers to pay for the cost of customer service.
- CVCCard Verification Code
- CVVCard Validation Value
- D & B Duns NumberDun & Bradstreet Data Universal Numbering System. A unique 9 digit code that identifies and links more than 57 million companies worldwide.
- DDAsee Demand Deposit Account
- Debit Access FeeThe amount the merchant pays per month to have access to all debit networks that the bank belongs to.
- Debit CardAn ATM Bankcard requiring a PIN Code which is used to purchase goods and services and to obtain cash. The transaction will debit the cardholders personal deposit account.
- DeclineResponse to a transaction request meaning that the issuing bank will not authorize the transaction.
- Demand Deposit AccountA standard checking account held by the merchant into which funds are deposited as a result of processed credit transactions.
- DepositProcess of transmitting a batch of transactions from the merchant to the acquiring institution in preparation for settlement. Also known as release.
- Digital CertificateOnline identification that authenticates a consumer, merchant and a financial institution. Digital certificates are used to encrypt information exchanged in secure electronic transactions.
- Digital Receipt Infrastructure(DRI) Utilizing this infrastructure enables consumers and organizations to prove that electronic transactions and events actually took place. In legal terms, these serve as a digital trail, as opposed to a paper trail.
- Digital SignaturesAn electronic signature, which cannot be forged. Instead it is generated from a computed digest of the text that is encrypted and sent with the text message. The recipient decrypts the signature and retrieves the digest from the received text. If the digests match, the message is authenticated(...)
- Discount rateA percentage calculated on the amount charged to the merchant by the acquiring bank for processing a transaction.
- E-commerceThe processing of buying and selling via the Internet.
- EBTsee Electronic Benefits Transfer
- EDCsee Electronic Data Capture
- EDIsee Electronic Data Interchange
- EFTsee Electronic Funds Transfer
- Electronic authorizationObtaining authorization for use of a credit card by electronic means, as via computer equipment and telephone line.
- Electronic Benefits TransferCards holding balance of government benefit funds
- Electronic Data CaptureTo use a Point Of Sale (POS) terminal for submitting credit card transaction information to a merchant account provider. The point-of-sale terminal reads the information encoded in the magnetic stripe of bankcards then electronically authorize and capture transaction data, eliminating the need(...)
- Electronic Data InterchangeThe electronic communication of business transactions, such as orders, confirmations and invoices.
- Electronic Funds TransferThe transfer of money initiated through an electronic terminal, automated teller machine, computer, telephone, or magnetic tape. EFT also applies to credit card and automated bill payments.
- eMerchantViewService offered by MSLTD whereby merchants can track their account online including 6 months of monetary and adjustment history, 6 months of chargeback history, 6 months of retrievals history (documentation requests), 3 months of merchant statements, cardholder inquiries, keyed or swiped(...)
- EncryptionEncryption is the process of disguising a message (using mathematical formulas called algorithms) in such a way as to hide its substance, a process of creating secret writing. Used as a data security technique for credit cards where their machine-readable data is scrambled and must be decoded(...)
- eProcessingNetworkInternet credit card and check processor (www.eprocessingnetwork.com)
- ESOEZ Check Sales Office
- Expired CardA card on which the embossed, encoded, or printed expiration date has passed.
- FDRsee First Data Resources
- First Data ResourcesThis is the company that settles or clears the transactions between the merchant and the cardholder
- Fleet CardA corporate credit card used only for the purchase of fuel and vehicle maintenance services.
- Floor LimitAn amount that Visa and MasterCard have established for single transactions at specific types of merchant outlets and branches, above which authorization is required.
- Force TransactionA sale transaction for which a merchant received a voice authorization or authorization only. A force is done so that the previously authorized transaction can be settled and the merchant can receive funds. (also known as post auth or prior sale)
- Fraudulent TransactionA transaction unauthorized by the cardholder of a bankcard. Such transactions are categorized as lost, stolen, not received, issued on a fraudulent application, counterfeit, fraudulent processing of transactions, account takeover, or other fraudulent conditions as defined by the card company(...)
- ICAsee Interbank Card Association
- ImprintCan be electronic (by swiping the card through a card reader) or manual (by obtaining a physical imprint using an imprinter) one of the two is always required to prove the card was present at the time of the transaction.
- Interbank Card AssociationUnique four digit identification number assigned by MasterCard to identify its members.
- InterchangeThe exchange of information, transaction data and money among banks. Interchange systems are managed by Visa and MasterCard associations according to their requirements and are very standardized so banks and merchants worldwide can use them.
- Interchange FeeA fee paid by the acquiring bank/merchant bank to the issuing bank. The fee compensates the issuer for the time after settlement with the acquiring bank/merchant bank and before it recoups the settlement value from the cardholder
- Internet commerceA term that covers all commercial transaction activity on the Internet.
- Introductory RateVarious credit cards offer a low introductory rate that switches to a higher variable or fixed rate in order to attract customers. It could be described as a special offer, or discount. Make sure that you know how long the introductory rate is applicable and what APR the card will carry after(...)
- ISOsee Independent Sales Organization
- JCBJapanese Credit Bureau
- Level 2 or Level 3 ProcessingPurchasing Cards
- Local ReviewThe ability for a merchant to review, from their terminal the contents of a batch either before or after settlement (also referred to as a bacth report)
- Magnetic StripeA stripe of magnetic information affixed to the back of a plastic credit or debit card. It contains customer and account information required to complete electronic financial transactions.
- Mail Order / Telephone OrderA transaction where a cardholder orders goods or services from a merchant by telephone, mail or other means of telecommunication, and neither the card nor the cardholder is present at the merchant outlet. Defined as a merchant that keys in more than 50% of their transactions without getting(...)
- Manual EntryCredit card information that is entered via terminal keypad or keyboard instead of swiping the card through a card reader.
- Marketing by BanksA bank that has a merchant processing relationship with Visa and Mastercard, also known as a member bank, can issue merchant accounts directly to merchants. To reduce risk, some banks limit approval to merchants in its geographical area, those with a physical retail storefront, or those that(...)
- MATCHMember Alert to Control High Risk
- MCCMerchant Category Code
- Member Service ProvidersThis is an organization licensed by MasterCard that processes merchants online credit card transactions in exchange for a percentage of the sales or transaction fees.
- Merchant AccountAn account that is established by a merchant to receive payment via credit cards.
- Merchant Account MarketingMerchant accounts are marketed to merchants by two basic methods: either directly by the processor or sponsoring bank, or by an authorized agent for the bank and additionally directly registered with both Visa and MasterCard as an ISO/MSP (Independent Selling Organization / Member Service(...)
- Merchant AgreementA written agreement between a merchant and a bank containing their respective rights, duties, and warranties with respect to acceptance of the bankcard and matters related to the bankcard activity.
- Merchant BankBank that has an agreement with a merchant to accept (acquire) deposits generated by bankcard transactions.
- Merchant Category CodeA code assigned by an acquirer to a merchant to identify the merchants principle trade, profession or line of business. This four digit code is also known as the Sic Code.
- Merchant Identification NumberA group of digits provided by a merchant bank to uniquely identify the merchant in an e-commerce transaction. Also called the Merchant ID or Merchant Number
- Methods of processing credit cardsToday a majority of credit card transactions are sent electronically to merchant processing bank for authorization, capture and deposit. The method of processing credit cards will vary by industry. In all circumstances either the entire magnetic strip is read by a swipe through a credit card(...)
- MICRMagnetic Ink Character Recognition (checks swiped for verification of funds)
- MIDsee Merchant Identification Number
- Mid-Qualified RateThis reflects the amount of activity that was hand keyed into the terminal or voice authorized or not processed by closing the terminal within 24 hours. This activity is assessed a higher discount rate (an additional 1%)
- MOTOsee Mail Order/Telephone Order
- MSPsee Member Service Providers
- MUDsee Marketing Unit Director
- Multiple Transaction Processing (Multi-Trans)Electronic communications process where multiple authorization requests and responses are exchanged during a single phone connection with the third-party transaction processor.
- NACHANational Automated Clearing House Association
- NAICS CodeNorth American Industry Classification System. Common industry definitions for Canada, Mexico and the United States. This system is replacing the SIC Code system.
- Non-Qualified RateCharged on anything not qualified or mid-qualified as well as on business cards and manually keyed foreign cards. This activity is assessed the maximum discount rate
- Order NumberA 17 character alphanumeric field that may be used between the Cardholder and the Merchant for accounting or tracking purposes.
- Original DraftThe original copy of the forms and signature used in the transaction
- Partial DownloadThis process is when the credit card terminal dials into our bank to be partially reprogrammed, normally for updated information generally this term is used whenever verifone equipment is programmed.
- Payment Service ProviderA company that specializes in the provision of payment services for merchant on the Internet. The PSP will handle the capture, authorization and settlement of Credit and debit card payments and all the electronic and physical security required. They will often provide additional services such(...)
- Per Transaction FeesFees paid by the merchant to the merchant bank or other contracted party on a per transaction basis.
- Personal Identification NumberA sequence of digits used to verify the identity of the holder of a bank card. It is a kind of password.
- PINsee Personal Identification Number
- Pin PadThis devise is used in conjunction with a terminal when processing debit sales to insure authorized usage. The pin pad will ask for the customers secret 4 digit # during the sale (Pin #)
- PIPRefers to Plural Interface Processing. Capabiltiy that allows the processing of American Express directly through the AMEX Network, thereby eliminating AMEX authorization fees.
- Plastic (Card)This is a generic term used to identify any of the various cards issued to cardholders.
- Point Of SaleLocation in a merchant establishment at which the sale is conducted by payment for goods or services received.
- Point Of Sale terminalElectronic device used by retail businesses to process credit card transactions. If the customer is present, they swipe or slide their credit card through the machine.
- POSsee Point of Sale
- PostingThe process of updating individual cardholder account balances to reflect merchandise sales, instant cash, cash advances, adjustments, payments, and any other charges or credits.
- PresentmentA clearing record that an acquirer presents to an issuer through interchange, either initially (a first presentment) or after a chargeback (a re-presentment).
- Primary Account Number (PAN)The number that is embossed, encoded, or both, on a plastic card that identifies the issuer and the particular cardholder account.
- PrinPrinciple Bank Identifier
- Prior authorizationAn authorization usually done before a transaction takes place. The approved authorization request may be held for an extended length of time before a card is present or not.
- Prior Authorized SaleA transaction for which authorization was obtained at an earlier time (I.E. A merchant had to call for voice authorization, merchant authorized card before services rendered, Hotel reservation, auto rental, etc.)
- Processing bankThe bank that processes the transaction once a credit card number is entered.
- ProcessorThis is the company that processes the merchants batch and submits them to FDR for settlement.
- Proprietary EquipmentThis type of equipment was specifically manufactured for a particular processor
- PSPsee Payment Service Provider
- QualificationA level at which a transaction interchanges level of qualification is dependent on how the credit card number is entered, how quickly a transaction is settled, and type of industry, etc.
- Qualified Retail Discount Ratecharged on all swiped bankcard transactions that are electronically authorized and closed in a daily batch
- Rates and feesA Merchant Account has a variety of fees, some periodic, others charged on a per-item or percentage basis. Some fees are set by the merchant account provider, but the majority of the per-item and percentage fees are passed through the merchant account provider to the credit card issuing bank(...)
- ReceiptA hard copy document recording a transaction that took place at the point of sale, with a description that usually includes: date, merchant name/location, truncated primary account number, amount, and reference number.
- Recurring BillingTransactions for which a cardholder grants permission to the Merchant to periodically charge his account number for recurring goods or services.
- Recurring TransactionA transaction for which permission has been granted by a cardholder to a merchant that is periodically charged to a cardholders account.
- RefundCreate a credit to a cardholder account, usually as a result of a product return or to correct an error.
- Request AuthSubmits a transaction for Authorization Only. (see Authorization)
- Residual Incomewhereby the sales agent receives a portion of the fees charged to a merchant
- Retail MerchantA merchant that provides goods and/or services in the retail industry, but is not a mail/phone merchant, a recurring services merchant, or a T&E merchant.
- Retrieval RequestA request to a merchant for documentation concerning a transaction, usually a cardholder dispute or a suspicious sales/return. A retrieval request can lead to a chargeback.
- Revenue SharingSales agents receive a portion of the overall profit generated by each merchant in their portfolio
- ReversalAn online financial transaction used to negate or cancel a transaction that has been sent through interchange in error.
- RISRisk Identification Service
- RTFReal Time Fraud
- SAFESystem to Avoid Fraud Effectively
- Sales DraftA paper record evidencing the purchase of goods or services by a cardholder. Same as a receipt.
- SettlementThe step in the clearing process when the acquirer credits the merchant account with the amount of a credit card purchase, and the bankcard association (such as Visa and MasterCard) credits the acquirer and debits the card issuer for the transaction.
- Setup feesA fee that is charged by a merchant services provider for establishing a merchant account.
- SICA 4-digit numbering system used to categorize businesses by industry group. This system is being replaced by the NAICS Coding system.
- SIC Codesee Standard Industry Code.
- Smart cardsSimilar to a credit card, but has a small microprocessor built-in to the card that holds and/or processes information for financial and other applications.
- Standard Industry CodeA 4-digit numbering system used to categorize businesses by industry group. This system is being replaced by the NAICS Coding system.
- StatementA written record prepared by a financial institution, usually once a month, listing all transactions for an account, including deposits, withdrawals, checks, electronic transfers, fees and other charges, and interest credited or earned. The statement is usually mailed to the customer.
- Statement feeThe statement fee is a monthly fee associated with the monthly statement that is sent to the merchant at the end of each monthly processing cycle. This statement shows how much processing was done by the merchant during the month and what fees were incurred as a result.
- Stored-Value CardA credit-card-sized device, implanted with a computer chip, with stored money value. A reloadable stored-value card can be reused by transferring value to it from an automated teller machine or other device. A disposable card cannot be reloaded.
- SurchargesAny additional charges to a merchants standard processing fees, they are a result of mid and non-qualified transactions.
- T & EAn abbreviation for Travel and Entertainment. American Express is considered a T&E Card.
- T & E MerchantAn airline, car rental company, or hotel whose primary function is to provide travel-related services. A travel agency (excluding one that is primarily engaged in the sale of transportation or travel-related arrangement services by mail/phone order) is a T&E merchant to the extent that it acts(...)
- Terminal CaptureThe term means that a sale will be registered within the terminal only until the sale is processed for deposit. If for any reason the sale deleted from the terminal before the deposit is processed the merchant will not get paid on the transaction. The merchant is required to do a deposit on(...)
- TIDsee Terminal ID
- TMFsee Terminated Merchant File
- TransactionAction between a cardholder and a merchant or a cardholder and a member that results in activity on the cardholder account.
- Transaction feeA fee charged by a merchant account provider for each credit card transaction completed.
- Transaction IdentifierA unique 15 character value that VISA assigns to each transaction and returns to the Acquirer in the authorization response. VISA uses this value to maintain an audit trail throughout the life cycle of the transaction and all related transactions, such as reversals, adjustments, confirmations,(...)
- Transaction ProcessorAn entity that validates and authorizes credit card purchases. They may also service the actual accounts on behalf of the issuers, emboss cards, and mail cards to cardholders.
- Transaction TypeA specific type of financial detail transaction activity that can be submitted to the clearing system.
- User AuthenticationProcess of validating that a user is who the user represents himself/herself as.
- Validation CodeA unique 4 character value that VISA includes as part of the CPS/ATM program in each authorization response to ensure that key authorization fields are preserved in the clearing or settlement record.
- Variable Interest RateWith variable-rate cards, the APR changes when interest rates or other economic indicators change. Also known as a floating rate.
- VARSValue-Added Resellers
- VBVThe Visa scheme designed to authenticate cardholders so that they cannot subsequently repudiate their use of a card to purchase goods. It will also reduce other fraud as fraudulent users will not generally know the pass phrase or PIN associated with the card.
- Verified By VisaThe Visa scheme designed to authenticate cardholders so that they cannot subsequently repudiate their use of a card to purchase goods. It will also reduce other fraud as fraudulent users will not generally know the pass phrase or PIN associated with the card.
- Voice AuthorizationAn approval response obtained through interactive communication between an issuer and an acquirer, their authorizing processors, or stand-in processing, through telephone, facsimile, or telex communications.
- VoidThe reversal of a current transaction, one that has been authorized, but not settled. Settled transactions require processing of a credit or return in order to be reversed.