Acquirer/Acquiring Bank/Merchant Bank: A financial
institution that provides accounts for merchants. Your merchant account
at the acquiring bank receives funds when a transaction is complete.
Acquirers are so named because they acquire a merchant's sales tickets
and credit the order value to the merchant's account.
API (Application Programming Interface): APIs streamline
development by allowing users to program to pre-existing interfaces instead
of custom
development.
Approval: A positive reply from a transaction authorization request.
Arbitration: Process used by acquirers to resolve a chargeback related dispute with an issuer.
Authorization: The approval or guarantee of funds given by the card issuer to the acquirer.
Average Ticket: Average dollar amount of sales for card transactions.
Back-end Network: Settlement provider responsible for finalizing transactions, routing payments and generating reports for a merchant.
Bank Identification Number (BIN): The six-digit number
assigned by Visa and MasterCard to identify a member (Issuer or
Acquirer) or processor for authorization, clearing or settlement
processing. The Issuer assigns the six digits as the first six digits of
the card number. The Acquirer assigns the six digits as the first six
digits of the merchant number. A Visa number always begins with 4,
MasterCard numbers with a ԓ5.
Batch: A collection of transactions that are processed
as a group. You can batch orders for authorization or for capture. Your
processing requests may in turn be batched for settlement by banks.
B2B (Business to Business):Ԡ The exchange of goods or services between one business and another business.
B2C (Business to Consumer): The exchange of goods and services between a business and a consumer.
Card Issuer: Financial institution that issues the
payment card to the cardholder. The card issuer remains unchanged
throughout a transaction.
Card Present: Card is present at the POS and swiped through an electronic device that reads the magnetic stripe on the card.
Card Not Present: Type of transaction where the card
is not presented at the POS and no magnetic stripe is read. These are
usually considered higher risk transactions.
Card Reader: Input device on a card terminal that
reads the information stored on the magnetic stripe. May also be
referred to as a magnetic stripe reader.
Cardholder: Customer associated with the primary
account number (or an additional authorized user) that requests a
transaction from a merchant.
Cardholder-Initiated Chargeback: Cardholder contacts the Issuer with-in 90 days of a transaction and refuses to accept the charge.
Chargeback: A payment dispute initiated by the
cardholder with their credit card issuing bank. The amount of the
disputed transaction is partially or completely reversed and immediately
withdrawn from the merchant's bank account. The merchant can dispute
the chargeback with proof of purchase, signature, proof of delivery,
etc.
Chargeback Fee: Amount charged to a merchant, by an acquirer, for processing a chargeback.
Close Batch: The end-of-day or end-of-shift process in
which the merchant balances and submits transactions for clearing and
settlement. This process occurs on a terminal-based capture system.
This process is automatic on host-based capture systems at a
predetermined time of day. The automatic process is an optional
setting.
CVV (Card Verification Value): Term for 3-digit code in signature panel to verify that the card is in the cardholders possession.
Debit Transaction: An approval by the cardholder of
the debit to his account. At the same time it provides a claim of funds
made by the acquirer (and/or the merchant) against the card holder's
bank account.
Decline: Negative issuer response to an authorization request on card payment. Merchant must request a different form of payment.
Dial-up Terminal: POS terminal that uses a telephone line for communications.
E-Commerce/Electronic Commerce: A way of doing
real-time business transactions via the Internet using any combination
of technologies designed to exchange data (such as EDI or e-mail),
access data (such as shared databases or electronic bulletin boards) and
capture date (through bar coding and magnetic or optical character
readers).
EFT (Electronic Funds Transfer): A method of
transferring money from one bank account to another using a variety of
electronic methods such as bank wire transfer, federal wire transfer and
international wire transfer.
Encryption: Way of scrambling data to protect personal information.
Factoring: This term refers to the practice of
allowing more than one merchant to process transactions through a single
merchant account. Factoring is not permitted under Visa, MasterCard and
American Express regulations.
Financial Institution: Any organization that supplies financial services such as commercial banks, thrifts, savings banks and credit unions.
Financial Transaction: A transaction from the Acquirer
to the Issuer containing all the necessary data elements for
authorization, posting and reconciliation.
Front-end Network: A provider that authorizes and captures transactions and sends information to a back-end network.
FTP (File Transfer Protocol): Used to transfer files over TCP/IP network (Internet).
Issuer/Issuing Bank: Member of MasterCard and/or Visa that issues payment cards.
IVR (Interactive Voice Response): A telephony technology in which someone uses a touch-tone telephone to interact with a database to acquire information from or enter data into the database
Mag Stripe (Magnetic Stripe): Panel on back of payment card that contains magnetically encoded cardholder account information.
Magnetic Stripe Reader: POS device that reads the information on the magnetic stripe. May also be referred to as a card reader. Merchant: Seller of products or services. Merchant Agreement: Contract between a Merchant and Acquirer that outlines payment processing rights and responsibilities. Merchant Bank: See Acquirer. MID (Merchant Identification Number): Unique number assigned by an Acquirer to identify a specific merchant. MO/TO: Mail order, telephone order. A
classification of merchant account with a specific set of rules that is
more restrictive than for retail merchants but enables a merchant to
accept a credit card payment without a cardholder's signature. The
merchant and the cardholder do not need to be in the same physical
location. MOTO accounts are also known as Card Not Present or CNP
accounts.
Notification: A message where the sender notifies the receiver of an activity taken, requiring no approval or response.
Payment Cards: A broad term that encompasses all
types of plastic cards used to make payments including credit, debit,
stored value and prepaid.
Payment Gateway: Electronic connection between a Merchant and Acquirer that transmits payment data. Personal Identification Number (PIN): A cardholders secret identification number that completes an online debit transaction.Ҡ
Point of Interaction: Applies to wherever a
transaction takes place (in-person, Internet, phone, mail order) and
there is an transaction between the cardholder and merchant. Point of Sale (POS): Usually associated with
retail points-of-sale, but also applies to any initial point where the
customer presents payment to the merchant, such as by telephone or
Internet.
Real-Time Authorization: Merchant requests and receives an authorization/decline for a credit card purchase as the customer makes their purchase. Typically take 2-3 seconds. Reconciliation: An exchange of messages between two
institutions (Acquirer, Issuer or their agents) to reach agreement on
their financial totals. Recurring Payment: A pre-authorized recurring transaction charged to a cardholders account (i.e. phone bill, memberships).Request:Ҡ A message where the sender informs the
receiver that a transaction is in progress and a response is required to
complete the activity. Retrieval Request: Request by an Issuer for a copy of the original sales ticket from the Acquirer. Reversal: A transaction from the Acquirer to the
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).
Scrip: A two-part paper receipt dispensed by a
scrip terminal that prints scrip. Usually this document is then handed
to a clerk to procure goods or services.
SDK (Software Development Kit): A kit that helps a developer integrate software into another program. Settlement: A transfer of funds to complete one or more prior transactions made, subject to final accounting. Smart Card: A payment card with a built in chip to store information. Stored Value Card: Card that represents a specific value. Often known as gift or pre-paid cards.Ticket Size: The monetary value of a purchase placed on a payment card. TID (Terminal Identification Number): Number that identifies a merchant to the front-end network. A unique number is assigned to each POS terminal.Transaction: Transfer of goods or services between a customer and merchant that results in payment. Transaction Date: Actual date transaction was made. Transaction Fee: Amount merchant pays per transaction for processing. Voice Authorization: The process of obtaining an
authorization by phone, which is typically a back-up procedure when the
authorization cannot be completed online. An authorization code
identifies the transaction as voice-authorized.
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