A
ABA Routing Number: The ABA Routing Number is the 9-digit number assigned to individual banks to identify them.
ACH (Automated Clearing House):
The ACH is a secure computer network that efficiently connects individuals, businesses and banks together through the Federal Reserve System enabling electronic payments to flow safely from start to finish.
Acquiring Bank: Need a better description…
Address Verification Service (AVS): The Address Verification Service (AVS) validates a credit card transaction when neither the card nor the cardholder is present by verifying the cardholder’s address against the records of the card issuing bank.
American Express – American Express, also referred to as “AmEx” or “Amex,” is a diversified international financial services company headquartered in New York City.
Annual Fee: An annual fee is any fixed charge that banks or other financial institutions charge for the use of merchant accounts, credit cards or other financial instruments.
Application Fee: An application fee is any charge paid by a potential customer who is asking to be granted permission, access, credit or other services from any institution, financial or otherwise. Application fees for merchant accounts are fairly standard.
Arbitration: A conflict resolution process outside of the court system between two entities that agree to be bound by the arbitrator’s decision.
Authorization: The process whereby a transaction is approved by an issuing bank, authorized agent, or Visa/MasterCard on behalf of that issuer, before the transaction is completed by the merchant via telephone or terminal.
Authorization Code: An authorization code is a numerical or alphanumerical code sent directly by a credit card issuer or issuing bank that is uniquely ascribed to a sales transaction as verification that the completed sale has been authorized.
Authorization Fee – A credit card authorization fee (which is actually an authorization request fee) is the amount of money that is charged directly to an individual merchant account each time communication is made between credit card processing software (when the sale transaction is processed online, etc.) or point of sale (POS) terminal (when the sale transaction is processed physically in person) and the authorizing network.
Authorize.Net: Authorize.Net is a payment gateway service provider, which is a system of processes and technologies that allow merchants to electronically submit credit card payment transactions to payment processing networks, such as a Credit Card Interchange and the ACH Network.
Automated Response Unit: An Automated Response Unit – or ARU – allows the manually keyed entry and the subsequent authorization of a credit card transaction over a traditional landline telephone or cell phone service.
Average Ticket Size (AVT): The average Visa/MasterCard dollar amount of each transaction the merchant anticipates processing or actually processes over time.
AVS: See “Address Verification Service.”
B
Bankruptcy Notification Service – The Bankruptcy Notification Service is a joint effort of the two major worldwide credit card companies (MasterCard and Visa) to log, track and assess bankruptcy filings and related items.
Basis Points: A “basis point” is 1/100th of a percentage point.
Batch Processing: This occurs when a merchant transmits the “batch” of daily sales for processing. An “open” Batch is one that is not yet “closed.” Batching generally occurs at least once per day.
Business Financials: Business Financials are essentially documents for which merchants compile information that describe, in detail, their operation in terms of financial transactions.
C
Cardholder: A cardholder is an individual, merchant or a corporate individual to whom a credit card is issued. The cardholder is the person or company who opens a credit card account and makes purchases using that respective credit card.
Card Present: A card present scenario indicates a merchant, sales or market environment in which credit card transactions can be completed only if both a valid credit card and its respective cardholder are both physically present during the transaction.
Card Issuer: A card issuer is a bank or financial institution that provides “card association” branded payment (credit or debit) cards directly to consumers.
Chargeback: A chargeback is the result of an action taken by a cardholder who disputes a credit card transaction through their credit card issuer. The card issuer initiates a chargeback against the merchant’s account. The sale amount of the disputed transaction is immediately debited from the merchant’s bank account. Merchants have 10 days in which to dispute the chargeback. This may be accomplished by providing the card issuing bank with a proof of purchase by the cardholder. This could be a signature or proof of delivery. A chargeback fee is generally assessed to the merchant account by the merchant bank for the handling of this process.
Charge Off: A Charge-off or write-off is a situation in which a credit card issuing institution is faced with a delinquent loan of such severity that it must temporarily or permanently absorb the entire amount of the debt in order to clear that amount from its records.
Checklister: In the formal course of merchant credit card and other electronic payment processing, a Checklister is a computer program that acts as a system – or what is known as a “gatekeeper” – through which all applications are entered. Once these application are submitted to the Checklister system, each one is automatically checked and verified for completeness and are then subsequently summarized in order to rapidly determine the exact status of that file, such as the acceptance or denial of a payment used in a traditional retail sales transaction or an online sales transaction.
Contingent Liability: Contingent liability is a term often used by financial institution underwriters and sales representatives to properly identify a situation created when merchants process credit card transactions ahead of the date that cardholder customers can expect to receive the goods or services that they originally purchased.
Corporate Resolution: A corporate resolution is a recorded formal process adopted by a majority of a company’s Board of Directors authorizing the company’s officers or management team to undertake actions on behalf of the entire company.
Credit Card – A credit card is a thin plastic card, roughly three by two inches in size, which is used by consumers and companies to make purchases.
Credit Card Fraud: Credit card fraud occurs when anyone uses another person’s credit card as a source of illegal funds.
Credit Card Processing: Credit card processing is a complex series of electronic events that accomplishes the secure, successful transfer of funds from a bank to a merchant in payment for goods and services purchased by a valid credit card holder.
Credit Card Processors: Credit card processors are businesses, including but not limited to chartered financial institutions, that give merchants the ability to accept debit and credit card payments for goods and services.
Credit Card Terminal: A credit card terminal is a real or virtual business device that allows merchants to process cardholder payments.
Credit Report: A credit report is a complete history of financial transactions conducted by an individual, a business or even a country over a fixed period of time.
Customer Satisfaction: Satisfying consumers through quality products or good employee consumer relations.
CVV2: The CVV code (Card Verification Value code) is a three- or four-digit number printed on credit cards, usually on the back. It was created to protect merchants and credit card issuing banks from fraudulent purchases in what are termed “cardholder not present” purchases.
D
Data Capture: Data capture is a broad term that defines any type of information, in any form, that is transmitted through and stored in computers according to specific input fields.
Debit Card: Debit cards have the same form factor and magnetic stripe as credit cards, but are linked to a designated bank account.
Debit Networks: The electronic devices, pathways and terminals that enable debit card transactions.
Deposit Account: A deposit account is any amount of money put into a bank or other financial institution that is set up to remain in the institution for a fixed period of time.
Direct Debit: Direct debit, also referred to as direct withdrawal, electronic checks, and direct payments is a type of payment system that allows businesses to debit funds directly from customers’ bank accounts.
Direct Mail Merchant: A Direct Mail Merchant is a merchant that submits actual sales drafts for payment through the mail for their eventual payment or settlement. They are sometimes referred to as a “paper merchant.”
Direct Marketing: Direct Marketing is a scenario in which a merchant solicits business to individuals who or businesses that did not request this solicitous contact.
Discount Rate: A fee taken by the bank as a percentage of all sales transactions. If the discount rate is 2.50%, for example, the discount rate fee is $2.50 for a $100.00 charge. There different discount rates for each transaction type: Qualified, Mid-Qualified and Non-Qualified. Mid-Qualified is higher than Qualified and Non-Qualified is higher than Mid-Qualified.
Discover Card: Discover Card is one a small group of a major credit cards that is largely issued in the United States. The credit card was initially introduced to the public by The Sears, Roebuck and Company in the mid-1980’s.
Doing Business As (DBA): The DBA is the name the public sees, whether on a physical storefront or on the web. If the merchant has another business, then we would need a separate application for both.
Downgrades: Downgrades are rates changes that occur when merchants do not meet major credit card company requirements for a credit card sales transaction.
E
e-Commerce: This is a generic term denoting business done over the web and/or processed electronically.
EDC Terminal: An EDC terminal – sometimes referred to as Electronic Data Capture terminal – a point-of-sale device that reads information encoded in the bankcard’s magnetic stripe, performs authorization functions, stores transaction data, and batches and transmits that data to the acquirer for processing.
Electronic Funds Transfer: Electronic Funds Transfer – or EFT – is a system of transferring money or funds from one bank account directly to another without any paper money or funds changing hands in the exchange.
Electronic Ticket Capture (ETC): Electronic Ticket Capture (ETC) systems are the devices with which a retailer “swipes” your card when you make a credit card purchase. The device reads your account information from the magnetic strip on the back of the card, adds the amount, date and type of purchase being made, then codes and sends that information to the processing system.
The Electronic Transactions Association: The Electronic Transactions Association – or ETA – is an international trade association based in Washington, D.C. that represents merchants and offers electronic transaction processing products and services. The purpose of the ETA is to influence, monitor and shape the present and future of the merchant acquiring industry by providing distinct leadership through merchant education, advocacy and the exchange of information.
Embossing: Embossing is a hybrid printing/production process whereby numbers and letters are pressed into the surface of the receiving material, either paper, plastic or metal, and can be felt as well as read optically.
Encryption: Encryption is an advanced technology that effectively changes and scrambles information to prevent it from being changed, copied or stolen.
F
Face-to-Face: Face-to-face credit card transactions occur when the card holder is present at a retail establishment and uses his credit card to complete a purchase.
Factoring: Factoring is a process where businesses sell their receivables, that is, the money owed to them by other businesses, to a third party at a discount.
Federal Tax ID Number for businesses are known as Employer Identification Numbers (EIN), and are issued by the Internal Revenue Service to identify particular business entities for tax purposes.
First Data Corporation (FDC) is the largest company in the world whose sole function is to process electronic transaction data. For many of the world’s largest corporations, your local merchants and even individuals, First Data is the gateway company that securely processes all of their electronic transactions.
Full Business Name – A firm’s full business name is the name that was entered onto the registration certificate it filed with the proper federal and state government agencies, as well as the IRS.
G
Gateway - A gateway is a company that provides the connection between a website, a terminal or any other credit card processing device and the credit card companies.
Gateway Fees – are the costs charged by companies like First Data Corporation for access to the networks that handle the financial data processing of credit card purchases. They are thus quite similar to the fees paid to the ISPs (Internet Service Providers) whose networks allow consumer’s access to the Internet.
Global Payment Systems – are worldwide electronic pathways that accept and reconcile payments in numerous currencies, through credit cards and other country specific financial instruments, in numerous languages and dialects.
Guarantor - A guarantor is a person or business entity that makes a financial promise, sometimes backed with collateral, for another person or business entity that is requesting either a loan, credit or some form of financial responsibility for which he or it is unable to qualify on their own. In the event that the primary person or entity requesting the loan or credit defaults, the guarantor is liable for any unpaid or overdue balances.
H
Highly Suspect Merchant - A highly suspect merchant is one who has a disproportionately large amount of questionable transactions in relation to the total business conducted over a fixed period of time. While many factors are used to determine whether or not a merchant is suspect, highly suspect or not suspect at all, the single most damaging category are transactions that were recorded on or near a date that a credit card was reported lost or stolen.
Hypercom - Hypercom Corporation is one of the largest providers of electronic payment solutions and point of transaction services in the world.
Hypercom ICE 5500 – The new countertop point of sale terminal, Hypercom’s ICE 5500, raises the performance bar for all other web enabled countertop merchant transaction processing terminals.
Hypercom Optimum T4100 – The Hypercom Optimum T4100 is a multiple payment card terminal that processes sales transactions and for retail merchants and their customers.
Hypercom T7 Plus – The Hypercom T7 Plus is a payment card processing terminal intended for countertop point of sales (POS) retail operations that require a low cost, efficient and reliable terminal that accepts all types of magnetic stripe cards for payment as well as efficient online transaction authorizations.
Hypercom T77 – The Hypercom T77 dial-up processing terminal is a compact, low cost credit card machine that offers a wide variety of operations including processing of credit cards, debit cards, and stored value cards, in addition to processing checks and proprietary cards.
Holdback - A holdback is a fixed percentage of a merchant’s total dollar volume not delivered to his account but held by the credit card processing bank to cover any future unforeseen catastrophic losses. A holdback percentage is sometimes levied on new merchant account applications if the applicant does not have sufficient credit history or assets to qualify.
I
IC Verify: IC Verify software is a PC-based payment authorization and settlement system that communicates directly with the First Data Merchant Services (FDMS) platforms to authorize payment transactions and store them for end-of-day settlement. Internet pioneer CyberCash initially developed the software, which was acquired in 2002 by First Data along with a number of the original engineering personnel.
Imprinter: The now old fashioned manual, slide type device used to produce an image of the raised (embossed) characters on a credit card, to a transaction slip. All merchants should have a manual imprinter for cases that demand a physical imprint.
Independent Sales Organization (ISO): This acronym refer collectively to people who have contracted to sell our merchant processing services.
Integrated Point of Sale (IPOS): This acronym refers to conventional terminals that are “smarter” and more sophisticated in that they may be setup to communicate with like terminals owned by the same merchant even if they are located at different locations and with different merchant numbers.
Interchange: The term “interchange” refers to both a process and the fee for that process, which involves Visa or MasterCard taking a percentage of retail transactions where a credit or signature debit card is used for payment.
Interchange Fee – “Interchange fee” is a term that is used in the credit card and banking industries to describe the amount that a merchant’s bank (the “acquiring bank) pays a customer’s bank (the “issuing bank”) when merchants accept cards that use major credit card networks such as MasterCard, Visa or Discover for sales transactions.
Internet Merchant Account: A Merchant Account is a relationship between a retailing company and a Merchant Bank, which allows the retailer to accept credit card payments from customers via the Internet.
Issuing Bank: An Issuing Bank is any Visa/MasterCard member bank that enters into contractual relationships with cardholders for the issuance of cards.
K
Keyed - A “keyed” account, more properly referred to as a Keyed Entry Merchant
Account, is one in which businesses process customer payment cards by
manually keying the information into a credit card terminal/machine, an Internet-connected computer or an online (”virtual”) system.
M
Magnetic Stripe: A magnetic stripe (“magstripe”) is essentially a length of recording tape that is bonded to the back of payment cards. The magnetic material, coded with individual account information, is later read by physical contact (“swiping”) on a terminal. Credit cards, driver licenses, security passes and even train tickets are all examples of magnetic stripe cards.
Magnetic Stripe Reading Terminal – A magnetic stripe reading terminal is a point-of-sale (POS) machine that reads the encoded information with a magnetic head, similar to that of a tape recorder, from the magnetic stripe of a credit card or other bankcard when it is swiped through the terminal slot.
MasterCard: MasterCard Worldwide is a multinational corporation headquartered in Purchase, New York, that facilitates transactions between merchants’ banks and purchasers’ banks when its branded credit and debit cards are used for payment. It became a publicly traded company in 2006, but before that MasterCard Worldwide was a “membership organization” owned by the 25,000+ financial institutions issuing its card.
Member Alert to Control High-Risk Merchants (MATCH): When acquiring banks and transaction processors terminate contracts with merchants for certain risk-related reasons, the merchant businesses and their owners end up on a list called the Member Alert to Control High-Risk Merchants (MATCH).
Merchant - In the United States, the term “merchant” commonly refers to a person or firm buying goods at a wholesale price level for sale at retail.
Merchant Account Provider: A merchant account provider is a company that establishes the working relationships between and among merchants and financial institutions, primarily concerning the use of credit cards.
Merchant Accounting System: A merchant accounting system is a computerized means by which a business that accepts payment cards (credit, debit, gift, etc.)
Merchant Accounts – A merchant account is a bank account that is opened by a merchant through a bank or other institution that is a member of the major credit card network.
Merchant Cash Advance – A merchant account cash advance allows a business account holder to borrow true currency against future sales. Unlike a consumer or individual credit card cash advance, in which the amount of cash that is available for such an advance is typically a small percentage of an account holder’s overall credit limit.
Merchant Fees – “Merchant fees” are more commonly referred to as “interchange fees.”
Merchant Identification Number (MID): A merchant identification number (MID) is a unique number assigned to a merchant account to identify it throughout the course of processing activities.
Mid-Qualified - A Mid-Qualified Rate, also called a partially qualified rate, is the percentage rate that merchants are charged whenever they accept credit cards that do not qualify for the lowest rate.
Monthly Minimum The “monthly minimum” is the specific dollar figure in processing fees that must be generated by a merchant account in a particular month.
Monthly Statement - A Monthly Statement is a printed document and/or an electronic equivalent, displayed on- or off-line, that identifies exactly what fees and charges a merchant pays to a merchant service provider for the use of a merchant bank account.
Monthly Volume – Monthly Volume – or MV – is the maximum monthly dollar volume that a merchant is allowed to process for all Visa and MasterCard sales transactions.
N
Non Qualified Rate – The Non-Qualified rate is the highest percentage rate that a merchant is charged whenever they accept a credit card for a sales transaction through their store or business.
Nurit 3010: The Nurit 3010 model from Lipman is a wireless, portable, payment-processing device. Just 3.62 inches thick, 4.25 inches wide, 9.05 inches long and 2.16 lbs. without paper, it offers a comprehensive feature list and important usability options that make it a solid choice for a “pay anywhere” solution.
Nurit 3020: The Nurit 3020 is essentially the landline version of Lipman USA’s Nurit 3010. Whereas the 3010 supports both phone line and wireless connectivity, the 3020 is a “Countertop Payment Solution” not intended for mobile businesses, or even for mobility in a specific business location.
Nurit 8000: The Nurit 8000 – the top-of-the-line wireless payment device from Lipman USA – can process your transactions from almost anywhere, as its connectivity options are virtually unlimited.
O
Offline Transaction Processing is class or series of systems – which may or may not be linked to one another – that facilitate exchange, transaction applications and actions amongst banking institutions, merchant services providers, consumers and other related entities.
Over the Counter: Over the counter – or OTC – refers to a merchant and a respective merchant bank account that a business owner has in which actual credit card sales drafts are submitted to their local bank for payment.
P
Payment Gateway: A Payment Gateway is service provided by an e-commerce application service provider that authorizes all payments for electronic merchants, internet retailers, those companies that use both physical retail spaces and online sales, or traditional brick and mortar retail centers.
Payment Gateway Service Provider: A Payment Gateway Service Provider is the entity or group that provides online businesses the figurative gateway or throughway for sales transaction information to pass from a merchant’s online sales hub to the credit card processing company.
Payment Processor: A Payment Processor is a company that routes credit card transactions from merchant locations to credit card issuers for complete authorization and eventual settlement.
Personal Identification Number: A Personal Identification Number – or PIN – is a numeric password shared between a user and a system that can be used to authenticate the user to the system.
Pinpads: Pinpads are small metallic or plastic boxes with 10-numeric and up to 16 overall keys
Point of Sale: or POS – specifically refers to the location where a transaction occurs.
Point of Sale Terminal – A Point Of Sale Terminal – or POS – is the hardware and software used for sales transaction checkouts at a retail location or online store.
Programming Fee – For retail merchants, a Programming Fee is a fee charged for programming the merchant’s sales terminal or credit card reader.
Purchase Cards: sometimes also known as P-Cards – are credit cards for use specifically by employees of government agencies, schools or individual corporations.
Q
Questionable Merchant: is a merchant or merchant location at which an excessive number of confirmed fraud transactions have occurred within a specified period.
Qualified Discount Rate – A Qualified Discount Rate is the percentage that a business is charged when they process a regular consumer credit card in a conventional manner governed by their merchant account provider that uses an accepted credit card processing solution. This is almost always the smallest rate a merchant may pay when taking credit cards for sales purchases.
Qualified Rate – A Qualified rate is the percentage rate that a merchant is charged whenever that merchant accepts a traditional consumer credit card and processes it in a standard manner defined and determined by their merchant account provider, and employing an approved credit card processing solution.
Questionable Merchant: is a merchant or merchant location at which an excessive number of confirmed fraud transactions have occurred within a specified period.
R
Recurring Transactions: refer to the instance when consumers authorize merchants to charge their credit card or debit cards a specific amount on a regular basis – such as monthly, quarterly or yearly – for a series of goods or regular services.
Refund Policies: A deliberate set of plans of action set by merchants regarding refunds to their customers for goods or services received if either is unsatisfied with the transactions that generated said good or service sales.
Reserve - Reserve, which is also known as Rolling Reserve or even as Hold Back, is an amount of money that is literally held in reserve by the merchant account provider to cover potential customer dispute charges, related chargeback fees and other types of expenses.
Retrieval Request – A “retrieval request” is a request made to a merchant for either a legible copy of a sales transaction record or an original sales record.
S
SSL Certificate – SSL (Secure Sockets Layer) certificates are files, regularly installed on safe online servers, that recognize a specific website.
Secure Server – A secure server is a web server that supports any of the major security protocols, such as SSL, that encrypt and decrypt messages to protect them against third-party tampering or fraudulent use.
Setup Fee – A setup fee is a nominal amount charged by a merchant account service provider when a merchant account is established.
Shopping Cart – In the world of e-commerce and merchant accounts a “shopping cart” refers to special computer software that helps people make purchases and expedites the ordering process at an online store (e-commerce website).
Standard Industry Code/Merchant Category Code (SIC/MCC Code) – The SIC (Standard Industry Code) is a four-digit, numeric identifier of business industries used by the IRS, processing banks and other institutions.
Swipe - A Swipe refers the passage of a magnetic stripe card through a payment processing terminal to process a transaction. The card is run through the terminal which reads the information off of the card with a magnetic reader. It submits it to a merchant service provider and card issuer simultaneously in order process a sales transaction or related transactions for a merchant and customer.
T
Transaction Fee – A transaction fee is a per-item fee that is charged to the merchant by the acquirer for transaction activity such as sales, credits, returns, batch closures and more. A common transaction fee for keyed transactions, for example, is close to 30 cents. If a merchant makes one hundred sales every month, then, of course, the total of all transaction fees will be 30 dollars.
Trade Reference – A trade reference is a company with which a merchant does regular business, used as a means of verifying the creditworthiness of that merchant to a third party considering the extension of credit.
Thales Talento EFT – The Thales Talento EFT is a credit card terminal processing machine that has established itself as a flexible and secure solution within the retail, hospitality, restaurant and service industries worldwide.
Terminal Provider – A terminal provider typically refers to a manufacturer, vendor and/or service provider that offers either actual (physical) point-of-sale (POS) payment card processing terminals and systems, or a virtual credit card processing terminal, to merchants who conduct brick-and-mortar retail and/or online sales.
Terminal Identification Number (TID) – Terminal Identification Number, also known as a TID or TIN, is a unique number assigned and linked to a specific point-of-sale (POS) terminal or workstation that can be used to identify the merchant operating the terminal during credit card sales transaction processing.
Tellan Software – Tellan Software was a leading supplier of PC-based electronic payment solutions for online commerce, businesses that employed PCs as electronic cash registers, mail order companies, home-based businesses and international enterprises that sought to consolidate payment applications into a centralized payment platform.
U
Unsecured credit is credit extended without collateral and without the borrower attaching specific assets in the event of default.
Unique Transactions are payment card sales transactions in which merchants adhere to card acceptance procedures that may be different from ones required of regular payment card sales transactions.
V
Verifone - VeriFone is a company that manufactures and distributes electronic payment equipment.
VeriFone Tranz 460 – The VeriFone Tranz 460 is an inexpensive, reliable and compact point of sale (POS) credit card terminal and printer combination that is ideal for merchants who need to conserve counter or desk space.
Verifone Omni 3750 – The Verifone Omni 3750 is a versatile and powerful point of sale (POS) credit card transaction terminal.
VeriFone Omni 3200 – The Verifone Omni 3200 was first in a line of credit card terminals by this leading manufacturer to display its new eggshell body style.
Verifone Tranz 330 – The Verifone Tranz 330 is a basic payment transaction point of sale (POS) terminal with pre-programmed prompts for banking applications.
