A
AVS - (Address Verification System ) : Checks to see that the billing address given by the customer matches the credit card. If you opt not to use AVS, VISA and MasterCard will not support your transactions and will charge you an additional 1.25% on those sales. Most merchant accounts come with AVS at no extra charge. Acquiring bank : A bank that provides an e-business with a credit card merchant account. The acquiring bank transfers credit card and other purchase information to a credit card association, and they in return forward it onto an issuing bank. ACH (Automatic Check Handling) : ACH can also mean Automatic Clearinghouse. ACH is a form of e-payment 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, usually between large banks. ACH is designed to be an e-check or electronic check. Unlike the wire transfer, it is usually used to process higher volumes or small-dollar payments for settlement issues within 1 to 2 business days. All ACH transactions are settled pretty much the same way checks are. The clearinghouse takes all of the ACH files received daily from member banks, it then divides them by the originating bank (where the check was either cashed or deposited) and the paying bank (the bank where the check was drawn), then it totals the accounts, and credits or deducts the accounts accordingly.Assessments : Fees paid quarterly by members to VISA and MasterCard to support marketing and operating activities.Association : An organization owned by members, which services and obtains processing services for members and functions as a principal/proprietary member of VISA or MasterCard.Authorization : The act of ensuring the cardholder has adequate funds available against his or her line of credit. A positive authorization results in an authorization code being generated, and those funds being set aside. The cardholder's available credit limit is reduced by the authorized amount.Average Ticket: The average size of a merchant bankcard transaction. Generally used in pricing decisions and calculations.B
Banking Business Day : That part of any day on which a Member is open to the public for carrying on substantially all of its business functions, and which is not a legal holiday. The acceptance or approval by a Member of STAR Transactions through a STAR Terminal or acceptance of normal Settlement procedures on a given day shall not, of itself, establish that day as a Banking Business Day.Banknet : The primary data transport communications facility that links all MasterCard customers and MasterCard data processing centers into a single on-line financial network (also called a packet-switching network). Banknet separates communications processing from financial applications processing, allowing an unlimited variety of financial applications to transmit messages over a single communications network.Bankwire Transfer : Transfer of funds to any bank within the Federal Reserve System.Base : The VISANet data processing systems, networks, and operations that provide authorization and authorization-related services to VISA members.Base II: The VISANet data processing systems, networks, and operations that provide clearing, settlement, and other interchange-related services to VISA members.Batch: The accumulation of captured (sale) transactions waiting to be settled. Multiple batches may be settled throughout the day.Batch Authorization Transaction System (BATS): lorem.H: A system designed to allow certain merchants ' for example, mail order merchants ' to batch process authorizations on their own time schedules.Batch Processing: A type of data processing and data communications transmission in which related transactions are grouped together and transmitted for processing, usually by the same computer and under the same applicationBrowser: Short for 'Web Browser,' the tool (program) that allows users to surf the Web. The most popular Web browsers are Netscape Navigator and Microsoft Internet Explorer.Bulletin Board System (BBS): An electronic message system that you dial up directly on your computer to read and post messages or pull off files.Business Day: A day on which a Federal Reserve Bank to which a Member may send applicable items for presentments is open for business, other than a state bank holiday.C
Call Center: A functional area within an organization or an outsourced, separate facility that exists solely to answer inbound or place outbound telephone calls. Usually refers to a sophisticated voice operations center that provides a full range of high-volume, inbound or outbound call-handling services, including customer support, operator services, directory assistance, multilingual customer support, credit services, card services, inbound and outbound telemarketing, interactive voice response and web-based services..Capture: Converting the authorization amount into a billable transaction record within a batch. Transactions cannot be captured unless previously authorized and the goods or services have been shipped or transmitted to the consumer.Cardholder: The person to whom a financial transaction card is issued or an additional person authorized to use the card.Cardholder Bank: The bank that has issued a bankcard to an individual. The term is frequently used in conjunction with interchange arrangement to identify the card-issuing bank.Capture Date: The date on which a transaction is processed by an acquirer.Certificate Authority (CA) : This is the service a bank provides that digitally signs public keys sent to it by a web browser or by the merchant's server software. It issues and validates digital certificates associated with SET transactions.Chargeback: A transaction that is challenged by a cardholder or card issuing bank and is sent back through interchange to the merchant bank for resolution.Chargeback Period: The number of calendar days (counted from the transaction processing date) during which the issuer has the right to charge the transaction back to the acquirer. The number of days varies according to the type of transaction from 45 to 180 days.Chargeback Reason Code: A numerical code which identifies the specific reasons for the chargeback. VISA and MasterCard each have their own chargeback codes.Chargeback Reference Number: A 10-digit number assigned to every chargeback, unique (in a 12-month period) for each individual chargeback. The first four digits of the chargeback reference number are the issuer's identification (BIN/ICA) number.Check Card: A bankcard that enables the user to purchase goods and services and obtain cash disbursements against his or her asset account (generally a checking account). The check card is also called an 'offline debit card' or 'deposit access card.Check Guarantee: A service provided by a third party vendor who guarantees a customer's payment by check for a specified amount. Stipulations require that the merchant follow correct authorization procedures.Check Verification: lorem.H: A service provided in which a merchant accesses a national negative file database through their terminal/register to verify or authorize the person has no outstanding bad check complaints at any of the member merchants. This is not a guarantee of payment to the merchant.Compliance: The procedure a VISA or MasterCard member may use to resolve a dispute between members when no chargeback reason code applies. The challenging member must prove financial loss due to a violation of MasterCard and/or VISA rules by the other member.Cookie: A small chunk of information, stored on your computer by a Web site you have visited, that's used to remind that site about you the next time you visit it.Corporate Card: A bankcard issued to companies for use by company employees. The liability for abuse of the card typically rests with the company and not with the employee.Correspondent Bank: A bank that accepts deposits and performs banking services for other banks. Correspondent banking arrangements exist between local banks and banks located throughout the world.Counterfeit Card: A plastic card which has been fraudulently printed, embossed, or encoded to appear to be a genuine bankcard, but which has not been authorized by MasterCard or VISA or issued by a member. A card originally issued by a member but subsequently altered without the issuer's knowledge or consent.Credit Account: An Access Account which provides for the advance of cash, merchandise, or other commodity, in the present, in exchange for a promise to pay a definite sum at a future date, usually with interest.Credit Card: A plastic card with a credit limit used to purchase goods and services and to obtain cash advances on credit for which a cardholder is subsequently billed by the issuer for repayment of the credit extended.Credit Deposit: The value of a merchant's credit card purchases that are credited to its bank account after the acquiring bank buys the merchant's sales slips. The deposit is credited but is not funded until the acquiring bank gets the monetary value from the issuer during settlement. Also referred to as Deposit Credit.Credit Item: A transaction or Exception Item that causes an increase to a Deposit Account and a decrease to a Credit Account.Credit Limit: The maximum amount the cardholder may owe to the issuer on the card account at any time.Credit Loss: The amount lost (charged off) as a result of failure of the cardholder to repay the amount owed on the account.Credit Scoring: A method for predicting the credit worthiness of applicants for credit.Credit Transaction: A claim for funds by a cardholder for credit against his or her account. At the same time, it provides details of funds acknowledged as payable by the acquirer, the card acceptor, or both, to the card issuer.Current Risk: The risk exposure presented in the given month projected from the prior month's processing volumes.Cyberspace: A term coined by the science-fiction novelist, William Gibson, in his fantasy novel, Neuromancer. Used to describe the 'world' of computers. Used as a reference to the 'Internet.'Cycle: The grouping of cardholder accounts to provide for a distribution of workload and easier account identification.Cycle Billing: The preparation of monthly cardholder statements by group (cycle) for the purpose of evenly distributing the workload and receipt of cardholder payments.Cycle Period: A specific period of time during which both debit and credit transactions are accumulated from billing.D
Data Encryption Key (DEK): Used for the encryption of message text and for the computation of message integrity checks (signatures).Data Encryption Standard (DES): The NIST Federal Information Processing Publication (FIPS Pub. 46) standard which defines the use of the Data Encryption Algorithm.Database: A collection of data organized and designed for easy access i.e., a collection of customer names and addresses.Debit: A charge to a customer's bankcard account.Debit Card: Any card that primarily accesses a Deposit Account.Debit Transaction: A bankcard used to purchase goods and services and to obtain cash, which debits the cardholder's personal deposit account.Decline OR Declined: The denial of an Authorization Request by, or on behalf of, an Issuer Member.Demand Deposit Account (DDA): Usually abbreviated as DDA, it refers to the merchant bank account processor credits or debits for deposits, fees and adjustments.Deposit Account: : An Access Account, other than a Credit Account, maintained by a Member for processing transactions. Deposit Accounts include checking, NOW, savings, share draft, and such other depository accounts as are legal under Applicable Law.Direct Marketing: A transaction category for providing customized services and procedures for merchants that offers merchandise or services via catalogs, telephone calls, mailings, and/or advertisements.Direct Payment: A method of collection used in the ACH network for certain claims, generally those that are repeated over a period of time, under which the debtor gives the originator a standing authorization to debit his or her account.Disclosure: The information required by federal or state law to be relayed to the cardholder concerning the terms of the credit agreement. Disclosure must be made by the issuer before the first use of the card by the cardholder, and must subsequently be included on all monthly statements and other documentation mentioning finance charges.Discount Rate: An amount charged a merchant for processing its daily credit card transactions.Doing Business As (DBA): Refers to the specific name and location of the merchant establishment where credit card purchases are made.Domain Name System (DNS): A general-purpose data query service whose principal use is the lookup of host addresses based on host names. Important domains are .com (commercial), .edu (educational), .net (network), .gov (U.S. government), .mil (U.S. military) and .org (organization).Down Time: A period when all or part of a system or network is not available to end users due to failure or maintenance.Download: To copy a file from a remote computer 'down' to your computer.Dual Control: A process of utilizing two or more separate entities (usually persons), operating in concert, to protect sensitive functions or information (i.e., cryptographic key) whereby no single entity is able to access or utilize the functions or information.Duality: The membership of a financial institution in both MasterCard and VISA. Legality outside of the U.S. varies according to nation.Digital Certificate : Online identification that authenticates a consumer, merchant and a financial institution. Digital certificates are used to encrypt information exchanged in SET transactions. A certificate is a public key that has been digitally signed by a trusted authority (the financial institution) to identify the user of the public key. E
E-Cash: Electronic cash is a payment mechanism designed for the Internet. It is electronic money that can be passed along from person to person like cash. It is anonymous like cash, and has value immediately. It's cash, not a promise to pay later. E-Check: The electronic equivalent of a paper check.E-Commerce : (Electronic Commerce) The processing of buying and selling via the Internet.Electronic Banking: A form of banking in which funds are transferred through an exchange of electronic signals between financial institutions, rather than an exchange of cash, checks or other negotiable instruments.Electronic Wallet (E-Wallet) : Software, residing as a plug-in in the Web browser, that enables a cardholder to conduct online transactions, manage payment receipts and store digital certificates. Like your real wallet, your digital wallet stores your credit card number and shipping details. This wallet initiates the data encryption in a SET transaction.Electronic Data Interchange (EDI) : The electronic communication of business transactions, such as orders, confirmations and invoices.Electronic Funds Transfer (EFT) : The 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.Electronic Data Capture (EDC) : To use a Point Of Sale (POS) terminal for submitting credit card transaction information to a merchant account provider.Encryption: Scrambling of an electronic message (usually e-mail) in a way that only the sender and receiver can read the message.F
Factoring: When used in e-commerce, the term is applied to companies that offer to process credit card transactions through their own merchant account rather then having the merchant purchase their own, in exchange for a percentage of the transaction. This is an illegal practice and will result in heavy fines. Also known as credit card laundering.File Transfer Protocol (FTP): : A method of transferring files from one computer to another over the Internet.Financial EDI: Electronic exchange of payments, payment information or financially related documents in standard formats between business partners.Financial Institution: Any organization in the business of moving, investing, or lending money, dealing in financial instruments, or providing financial services. Includes commercial banks, thrifts, federal and state savings banks, saving and loan associations, and credit unions.Firewall: A specially programmed computer that connects a local network to the Internet and for security reasons only.Fulfillment: The acquirer's response to an issuer's retrieval request for a sales draft. The acquirer supplies the issuer with the original draft or a clear reproduction. The fulfillment record confirms the response and initiates reimbursement to the acquirer for fulfilling the request.Funding Correction: A payment made by the processor to a merchant to rectify an error made by the processor subsequent to clearing a merchant's bankcard deposit/transmission through the Associations and the processor receiving payment from the Associations for said bankcard deposit/transmission.Funds Transfer System: A wire transfer network, ACH, or other communication system or clearing house or association of banks in which the processor's Clearing/Funding Bank is a member and through which a payment order by a bank may be transmitted. Includes: SWIFT, CHIPS, Fedwire, the National Association of Clearing House Associations, MasterCard and VISA.G
Gateway: The interconnection between two networks with different communication protocols.Gross Deposit: Submitting bankcard sales and credits at the face amount. The acquirer later deducts the discount.H
Holdback: Also referred to as a reserve. This is a fee held back from a merchant's credit card transactions to cover any possible charge backs, and other disputed charges that a merchant may encounter. Usually, after a time, the hold backs are returned to the merchant.Hypertext Mark-Up Language (HTML): The language used to write pages for the World Wide Web. This language lets the text include codes that define fonts, layout, embedded graphics, and hypertext links..Hypertext Transfer Porotocol (HTTP): The way in which World Wide Web pages are transferred over the Internet.Hypertext Transfer Protocol Secured (HTTPS): A variant of HTTP that encrypts messages for security.I
Interchange: The domestic and international systems operated by VISA and MasterCard for authorization, settlement and the passing through of interchange and other fees, as well as other monetary and non-monetary information related to bankcard activities.Interchange Fee: Fees paid by the acquirer to the issuer to compensate for transaction-related costs. VISA and MasterCard establish interchange fee rates.Internet commerce : A term that covers all commercial transaction activity on the Internet.Internet Domain Name: A string of alphanumeric characters that identifies an IP Address.Issuing bank : Also known as an "Issuer". This is the bank that maintains a consumer's credit card account and will pay out to a merchant's account when the consumer makes a credit card purchase. At the end of the month the issuing bank will bill the customer for the debt.J
JAVA: A computer language invented by Sun Microsystems. Because Java programs can run on any modern computer, Java is ideal for delivering application programs over the Internet.Japanese Credit Bureau (JCB): Issuers of the JCB card.L
Laundering: The practice of using another company's credit card merchant account to process your credit card transactions. This is an illegal practice that will lead to heavy fines and perhaps more.M
Mail Order/Telephone Order (MOTO): MOTO is a short version to describe businesses that conduct sales via mail and telephone/fax.Merchant : Collective term applied to Web-based e-Tailers who may have online storefronts. Merchant bank : This is the bank that holds the merchant account. When someone buys a product and/or service from a merchant, the merchant bank will place the needed funds into a merchant account in exchange for the right to collect the debt that is owned by the purchasing consumer.Merchant account : An account that is established by a merchant to receive payment via credit cards.Merchant Fraud: The act of submitting sales drafts which are not the result of legitimate sales for the purpose of defrauding the services, the client bank, or individual cardholders. Fraud includes knowingly accepting lost, stolen, or counterfeit credit cards.Merchant Identification Number (MID) : A number provided by a merchant bank to identify the merchant in an e-commerce transaction.Merchant Settlement Amount: The net dollar amount for each business day of card transactions processed, less chargebacks debited to the merchants and other debits or credits to the merchants.M-Commerce : A term used to represent wireless e-commerce or the ordering of goods via wireless solutions like cell phone's, pocket PC's, PDA's, etc.Merchant Service Provider (MSP) : This is a bank or other firm that provides processing for credit card transactions. Most MSP's provide merchant accounts.Monthly minimum : This is the amount of fees you must meet each and every month, usually $25. If month sales do not make the monthly minimum the merchant account holder must make up the difference.Merchant Account Provider (MAP) : Either a bank or other institution that will host a merchant account and process credit card transactions. Micro-payments : The payment acceptance method used by merchants who offer products, services, or information for a few cents to a few dollars. Processing these small payments with a merchant account would significantly reduce the amount of profit you would gain from the sale.Modem: A device that converts serial digital data from a computer to a signal suitable for transmission over a telephone line and then reconverts the signal to serial digital data for the receiving PC.N
Network Service Provider: A terminal-centered system that allows the merchant to obtain authorization and/or data captured through the network. A third party vendor who provides authorization network services such as Banknet, VISANet, and NDC.Non Face-to-Face Transaction: Any transaction where the card is not presented, such as a mail order purchase.Non-Bank: In a payment system, a financial institution not offering retail banking services.O
Operating Risk: The sum total of cumulative chargeback risk exposure plus the cumulative credit risk exposure with a given merchant.Operating Rules: Rules and business practices meant to increase consistency and interoperability among the various financial service providers that will interact with each other and end-users. Examples of operating rules include: authorization procedures, settlement timing requirements, audit and accounting rules, and credit limits.P
Point Of Sale terminal (POS) : Electronic 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.Personal Idenification Number (PIN) : Used to identify a person attempting to use a credit card, or other type of bank card. Can be either an alphanumeric or numeric code.Processing bank : The bank that processes the transaction once a credit card number is entered.Payment gateway : This is the code that will transmit a customer's order to and from a merchant's bank transaction authorizing agent.R
Reason Code: A code used to provide additional information to the receiving clearing member regarding the nature of a chargeback, subsequent presentment, fee collection, funds disbursement, or request for a source document.Recurring fees : Usually means fees that are billed each and every month.Real-Time processing : The processing of a credit card transaction immediately after the purchase has been made. Real-Time is the preferred choice for Internet-based merchants.Reference Number: A twenty-three (23) position number assigned by the acquiring member and used to identify a transaction.S
Secure Socket Layer (SSL): Used to encrypt and protect data usually on an order from an online merchant's web site. Once the order has reached its destination the encrypted data is decoded.Secure Electronic Transactions (SET) : A secure payment protocol developed by MasterCard and Visa designed to ensure security for bank card transactions over the Internet. In denying merchants access to credit card information, details are secured between the shopper and the bank. Server: A computer that provides a service to other computers (known as clients) on a network..Settlement : The 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.Settlement Statement: A document issued to the merchant, indicating the sales and credit activity, billing information, discount fee and chargebacks (if any) occurring during a particular time frame (one week, one month)..Setup fees : A fee that is charged by a merchant services provider for establishing a merchant account..Shopping Cart Software: Shopping cart software allows the cardholder to select items from an online store and place them in a 'virtual shopping basket' or 'shopping cart.' The shopping cart remembers which items are selected while the cardholder views other items within the 'virtual storefront,' keeps a running total, and may calculate taxes and shipping. The items in the shopping cart are eventually ordered if the cardholder chooses.Smart cards : Similar to a credit card, but has a small microprocessor built-in to the card that holds information about the cardholder.Shopping Basket : As you shop online, you add items to your 'virtual' shopping basket. The basket is simply a list of the items you have selected to buy, together with the necessary details (number selected, price of each item etc). You can review what's in your basket at any time as you shop. Soft Decline : A declined response in which authorization is not granted on a valid card, not because it has been stolen or lost, but because the credit card already exceeds the credit line.Submission: The process of sending batch deposits to Merchant Services for processing. This may be done electronically or by mail.Switch: An electronic mechanism that routes transaction data from a point-of-sale terminal to the authorizing data processor for approval of the card-issuing institution.T
T&E CARD: Travel and Entertainment card issued by a private, non-bank company which deals directly with the cardholder and merchant and which generally requires payment in full monthly. T&E MERCHANT: An airline, car-rental company, lodging, or restaurant establishment whose primary function is to provide travel/entertainment-related services.TCP/IP: The system networks use to communicate with each other on the Internet. It stands for Transmission Control Protocol/Internet Protocol.Terminated Merchant File (TMF): A file listing the names of merchants and their principals whose bankcard relationships have been terminated for some reason by an acquirer. Operated jointly by VISA and MasterCard.Turn-key : A solution a firm offers in which they provide an individual with a fully e-commerce enabled web site. Usually complete with shopping cart, web design, hosting and merchant account.Transaction: This is any action between a cardholder and a merchant that results in activity on the account, such as an authorization and settlement. Merchants and financial institutions also conduct follow-on transactions that affect the cardholders' account, such as a capture and credit.Transaction Date: The actual date on which a transaction occurs. Used in recording and tracking transactions.Transaction fee : A fee charged by a merchant account provider for each credit card transaction completed.T-Commerce: The ability to order certain products and/or services right directly from your television. Still a very new concept that is being tested in Europe.Terminated Merchant File (TMF): Merchants with excessive chargebacks are stripped of their merchant account and the ability to accept credit card orders. The merchant is then placed on the TMF match list that all Merchant Service Providers have access to. Being placed on this file can keep you from obtaining another merchant account for several years.U
U-Commerce : Stands for "Universal Commerce". The ability to conduct secure commerce anywhere, anytime, with any type of device.Upload: To transfer data/files from your computer to another computer.V
Virtual Reality: A 3-D visual computer simulation that responds to your inputs so realistically that you feel you're inside another world.Visanet: The data processing systems, networks, and operations used to support and deliver authorization services, exception file services, and clearing and settlement services.Visa PAS (Payment Authentication Service) : Under Visa's PAS, cardholders must authenticate themselves by verifying their identity with a password when buying from a Web storefront. The ultimate aim is to secure merchant databases against compromise by hackers, and to password-protect card numbers that may be stored in a database.Voice Response Unit (VRU): An automated authorization support system for touch-tone telephones.W
Web Browser: A client program that runs on an end STAR Cardholder/Account Holder's computer and is used to navigate on the Internet.Wide Area Network (WAN: A network using common carrier provided lines (in contrast to LAN).World Wide Web (WWW): A hypermedia system that lets you browse through an unlimited amount of interesting information.Z
Zero Floor Limit: Requires that all cardholder transactions be authorized.
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