Find definitions of common terms with our glossary
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z
A
- ABA Routing Number
- A unique nine-digit number assigned to each banking institution, used to identify the bank and direct ACH debits and credits. The ABA routing number is usually found at the bottom of a personal or business check.
- ACH
- Automated Clearing House - group of processing institutions linked by a computer network to process electronic payment transactions between financial institutions.
- Acquirer, Acquiring Bank, Acquiring Financial Institution
- A financial institution that is a member of Visa and/or MasterCard and maintains the merchant credit card processing relationship. The acquirer receives all transactions from the merchant to be distributed to the issuing banks. Merchants must maintain an account with an acquiring financial institution to receive credit for credit card transactions. Daily credit card totals are deposited into the merchant's account minus any fees.
- Address Verification Service (AVS)
- AVS verifies the cardholder’s numeric portion of the address and zip code with what is on file with the bank at the time of the transaction.
- Affinity Card
- A card offered by two organizations, one a lending institution, the other a non-financial group. Schools, non-profit groups, pro wrestlers, popular singers and airlines are among those featured on affinity cards. Usually, use of the card entitles holders to special discounts or deals from the non-financial group. See also co-branded cards.
- American Express ( AmEx)
- A company that specializes in the issuance of Travel and Entertainment (T&E) cards. American Express services the cards it issues, serving as its own transaction processor with its own processing network.
- Annual Fee
- A bank charge for use of a credit card levied each year, which can range from $15 to $300, billed directly to the customer's monthly statement. Many credit cards come without an annual fee.
- Approval Response
- An affirmative reply following a transaction authorization request.
- Arbitration
- A procedure used by an acquirer on behalf of the merchant to resolve a chargeback-related dispute with a card issuer.
- Association
- MasterCard International, Visa U.S.A. or Visa International, which are licensing regulatory agencies for bankcard activities.
- ATM/Debit Card
- The plastic card used in an ATM for deposits, cash withdrawals, account transfers and other related functions. A PIN must be entered to withdraw cash and access account functions. An ATM card may also be used to make a debit purchase if the merchant has a PIN pad to accept the key entry.
- Authorization
- The process by which a transaction is approved by the issuer, or by Visa/MasterCard on behalf of the issuer. Permission is given to (or denied) the merchant, via the acquirer, to accept a specific transaction from the cardholder account. An authorization indicates only that the card is valid and that sufficient funds are available on the cardholder's credit limit at the time the request is made.
- Authorization Approval Code
- The numerical code designated by the issuer, assigned to a sales transaction as verification that the sale is authorized.
- Authorization Only (Auth Only)
- Used to reserve an amount against a credit card's available credit limit for intended purchases. Authorization Only is most frequently used in the lodging (check-in), restaurant (tab) and car rental (pick-up) industries, where an approval is received for an estimated amount prior to the finalization of the charge amount.
- Authorization Request
- A merchant's request for an authorization to accept a cardholder's sales transaction. An authorization request can occur electronically via a credit card processing terminal or via telephone as a voice authorization.
- Authorized User
- Any person to whom you give permission to use a credit card account.
- Auto Representment
- Automatically sending information to resolve a chargeback on a merchant's behalf without the need for merchant intervention.
- Average Ticket
- The average dollar amount of sale for credit card transactions.
- AVS
- Address Verification Service - a service supported by Visa, MasterCard, Discover and American Express that verifies the cardholder's billing address against the one on file with the issuer. AVS is designed to help combat fraud in non-face-to-face transactions.
B
- Back-End Network
- The settlement provider responsible for finalizing transactions, routing payment to a merchant's account and generating statements.
- Balance Transfer
- The process of moving an unpaid credit card debt from one issuer to another. Card issuers sometimes offer teaser rates to encourage balance transfers coming in and balance transfer fees to discourage them from going out.
- Bankcard
- A card issued by a banking institution with a MasterCard or Visa brand.
- Batch
- A group of approved credit card transactions, usually accumulated during one business day.
- Batch Deposit
- The electronic depositing of a batch file transmitted to the transaction processor for settlement.
- Batch Processing
- The authorization of transactions offline when immediate approval is not required - Transactions are collected in a batch and sent as one transmission for authorization and/or settlement. Batch processing is generally used with mail/telephone order transactions.
- BIN
- Bank Identification Number - a unique series of numbers assigned by Visa/MasterCard to a member institution, which identifies that institution in transaction processing. The BIN comprises the first six digits of a standard credit card number.
C
- Capture
- Receiving and storing transaction data at the processor's host computer, to be submitted later for processing and payment.
- Card-Not-Present
- A type of card transaction in which the card is not present at the point of sale for the magnetic stripe to be read. These are considered higher risk transactions.
- Card Present
- A type of transaction in which the card is present and is swiped through an electronic device that reads the contents of the magnetic stripe on the back of the card.
- Card Reader
- Input device on a card terminal that translates the information stored on the magnetic stripe on the back of a card.
- Cardholder
- The person to whom a payment card is issued, or an additional person authorized by the original cardholder to use the card.
- Card Holder Agreement
- The written statement that gives the terms and conditions of a credit card account. The card holder agreement is required by Federal Reserve regulations. It must include the Annual Percentage Rate , the monthly minimum payment formula, annual fee , if applicable, and the card holder's rights in billing disputes. Changes in the card holder agreement may be made, with written advance notice, at any time by the issuer. Rules for imposing changes vary from state to state, but the rules that apply are those of the home state of the issuing bank, not the home state of the card holder.
- Cardholder Account Number
- A sequence of numbers assigned specifically to a cardholder account that also identifies the issuer and type of payment card. The cardholder account number is the embossed number imprinted on the payment card.
- Cardholder-Initiated Chargeback
- A chargeback that results when a cardholder contacts the card issuer and refuses to accept a charge appearing on a monthly billing statement. A cardholder has 90 days to initiate a chargeback.
- Card Security Code (CSC or CVV/2)
- This is typically a 3 or 4 digit number on the back of the card, which is separate from the credit card number. CSC CVV/2 is referred to by different names depending on the card association.
- Cash Cards
- Cash cards, similar to pre-paid phone cards, contain a set amount of value, which can be read by a special cash card reader. Participating retailers will use the reader to debit the card in increments until the value is gone. The cards are like cash - they have no built-in security, so if lost or stolen, they can be used by anyone.
- CDPD
- Cellular Digital Packet Data - a method of sending data through cellular networks. CDPD is used with wireless credit card terminals to transmit transactions and deposits in mobile environments.
- Chargeback
- A challenge to a transaction initiated by the issuer or cardholder that is returned to the acquirer for resolution.
- Chargeback Fee
- The amount assessed by the acquirer for processing chargebacks.
- Chargeback Reason Code
- A numerical code which identifies the specific reason for a chargeback. MasterCard and Visa each have their own chargeback codes.
- Charge Card
- A card that requires a full payment of the charge by the due date. Unlike credit cards, which give borrowers a revolving line of credit and lets them borrow against it, carrying a balance with an agreed-to interest rate , charge cards do not allow carrying a balance and no interest is charged. American Express and Diner's Club are examples of charge cards.
- Check Card
- A bankcard that can be used with a PIN at an ATM or without a PIN at the point of sale, also known as an offline debit card. When used at the point of sale, the transaction is processed through interchange as a credit card transaction with the funds debited from the cardholder's checking account.
- Check Digit Verification (MOD-10 check)
- A check digit is the last position of a card account number, generated from an algorithm performed on a primary card account number. Verification of this number is referred to as a MOD-10 check and is used to validate a credit card number.
- Check Guarantee
- A service that guarantees check payment to a merchant up to a specified amount. However, merchants are required to perform correct authorization procedures.
- Check Reader
- A device that reads the numbers encrypted on the bottom of most checks.
- Check Verification
- A service that provides merchants with some security against bad checks. The person writing the check is matched against a national negative file database to flag outstanding or bad checks on record from other members of this service.
- CID
- Card Identification Number/Card Identifier - An American Express and Discover verification process that utilizes a non-embossed three- or four-digit number printed when authorizing credit card transactions where the physical card is not present.
- On American Express cards, the CID is a four-digit code printed on the front of the card.
- On Discover cards, the CID is a three-digit code printed next to the card number in the signature panel.
- Close
- Sending a merchant's completed transactions to the host for processing. (See also "Settlement")
- Closed Account Fee
- A fee charged for shutting down an account. Sometimes charged if the account is closed before a certain time period has passed.
- Co-branded Cards
- A type of affinity card issued through a partnership between a bank and another retail company. For instance, a large department store may co-brand a card with a bank. The card would have two brand names on it - the bank's name and the store's name. Usually, the attraction of the card is special deals with the retail partner. Many - particularly the ones affiliated with airlines that offer air miles - are popular enough to command a hefty annual fee.
- Code 10 Authorization
- If the POS device reads "Lost or Stolen Card," or "Pick Up Card" or a similar message, the merchant should call the authorization center for a Code 10 Authorization. The operator will ask questions to determine if the transaction is valid. Commercial Cards Formal name for the following three types of cards:
- Corporate Card; usually issued to the employees of a large corporation where the corporation assumes all liability for the card's usage.
- Purchasing Card; issued to corporations. It allows the corporation numerous parameters to control daily and monthly spending limits, total credit limits and where the card may be used. Many employees may be issued the same card number.
- Business Card; similar to the Corporate Card, but issued to a business with fewer employees. Each employee is responsible for his or her purchases.
- Compliance to the Visa and MasterCard regulatory bylaws. Also, a method of resolving a dispute between members if no chargeback reason code applies. The challenging member must prove financial loss due to a violation of MasterCard or Visa rules by the other member.
- Collection Agency
- A company that will attempt to obtain payment from you. If this happens, your account may be listed as a "collection account" on your credit report. If you do not pay your bill and your card issuer has to go to a collection agency to attempt to obtain payment from you, you may be liable for the cost of the collection agency's services. Check your cardholder agreement to see if your card includes this potential fee.
- Credit Card
- A plastic card that with a coded magnetic stripe that, when signed, entitles its bearer to a revolving line of credit , whose size and interest rate are determined by the borrower's income and credit report . Credit cards began in the late '40s when banks began giving out paper certificates that could be used like cash in local stores. The first real credit card was issued in 1951 by Franklin National Bank in New York.
- Credit Slip
- A form stating a refund or price adjustment will be credited to a cardholder account. Also referred to as a credit voucher or credit draft.
- Cryptography
- The process of protecting information by transforming it into an unreadable format. The information is encrypted using a "key" that makes the data unreadable. It is later decrypted, making the information readable again.
- CVC2
- Card Validation Code - MasterCard term for the three-digit code printed next to the card number in the signature panel and used as part of the authorization process. For a list of CVC2 response codes, click here.
- CVV2
- Card Verification Value - Visa term for the three-digit code printed next to the card number in the signature panel and used as part of the authorization process. For a list of CVV2 response codes, click here.
D
- DBA
- Doing Business As - the name a business uses to operate.
- DDA
- Demand Deposit Account - a checking account.
- Debit Card
- A bankcard used to purchase goods and services and to obtain cash, which debits the cardholder's personal checking account. During online debit transactions, the cardholder must enter a PIN. The card acts like a check with the money withdrawn from the existing account balance. The withdrawal of funds is immediate with online debit cards, delayed a day or two with offline debit cards . Debit cards that carry the logo of either MasterCard or VISA can be used at any location that displays that network's logo.
- Debit Switch
- A portal that transmits debit data between gateway banks and debit card issuers - also referred to as "Debit Network." Only financial institutions may be members of debit switches.
- Decline
- A response from the card issuer denying the use of the card for the attempted transaction. If a request for approval is declined, the merchant must ask the cardholder for another form of payment.
- Default
- An account on which the payments have not been made according to the terms of the card holder agreement is in default. Some card issuers now declare you in default - enabling them to penalize you via a higher interest rate - if you miss a payment with any creditor.
- Dial-Up Terminal
- An authorization terminal that uses a telephone line to communicate with the authorization center.
- Digital Certificate
- An encrypted attachment to an electronic message, used for security purposes. The most common use of a digital certificate is to verify that a user sending a message is who he or she claims to be. The receiver is also provided with a way to encode a reply.
- DIP Switches
- Dual In-Line Package Switches - a series of connected switches that determine the proper configuration for a payment card terminal printer.
- Direct Response
- Term used to describe a merchant processing primarily non-face-to-face or card-not-present transactions.
- Discount Rate
- The fees charged by the card acquirer to the merchant for processing payment card transactions.
- Display
- The backlit panel on a payment card device that shows characters on the screen.
- DUKPT
- Derived Unique Key Per Transaction - a method of PIN pad encryption.
E
- EBT
- Electronic Benefits Transfer - the automation of government benefits through electronic authorization, data capture and settlement processes. Plastic cards with magnetic stripes are used, eliminating paper benefits and coupon distribution.
- ECA/ECP
- Electronic Check Acceptance/ Electronic Check Processing - process that converts a paper check into an electronic check at the point of sale. The check is electronically processed through the ACH network.
- e-Commerce
- Electronic commerce is the buying and selling of products or services over the Internet. This also includes the exchange of data to facilitate the financing and payment aspects of the business transaction.
- ECR
- Electronic Cash Register - a cash register that also emulates a point-of-sale terminal for processing credit card transactions.
- EDC
- Electronic Draft Capture - the use of a point-of-sale device to authorize and settle credit card transactions.
- EFT
- Electronic Funds Transfer - an electronic system that automatically moves funds, e.g., an ATM withdrawal or pay-by-phone transaction.
- Encryption
- Method of scrambling data to protect a cardholder's personal information.
- Entitlement
- License or permission to accept a particular type of payment card or other payment vehicle.
- EPROM
- Erasable Programmable Read Only Memory - industry-initiated standards used to identify terminal types and components.
- Exceeded Timeliness
- A transaction that is deposited too late to qualify for the best interchange rate.
- Expiration Date
- The embossed date on a bankcard. After that date, the card becomes invalid and should no longer be accepted.
F
- F (Fixed)
- If the letter "F" appears after the annual percentage rate (APR) the interest rate is fixed and not subject to adjustment.
- Factoring
- When a legitimate merchant processes another merchant's transactions in return for payment. This practice is forbidden by the associations.
- Fair Credit Billing Act
- Passed by Congress in 1975 to help customers resolve billing disputes with card issuers. Disputes include everything from computational errors and incorrect charges to the crediting of payments. The act requires issuers to credit payments to a customer's account the day they are received. To be protected under the law, the consumer must write to the issuer within 60 days of the mailing date on the bill with the error. The issuer is then required to investigate and either correct the mistake or explain why the bill is correct within two billing cycles . The issuer also must acknowledge a customer's complaint in writing within 30 days. Each issuer is allowed to set specific payment guidelines. If any of the guidelines are not met, the issuer can take as many as five days to credit the payment.
- Financial Institution
- Any organization in the business of moving, investing or lending money, dealing in financial instruments, or providing financial services. This includes commercial banks, thrifts, federal and state savings banks, saving and loan associations, and credit unions.
- Fleet Card
- Payment card designed mainly for fueling, maintenance and repairs of corporate motor vehicles. Fleet cards are normally used to provide specialized reporting.
- Folio
- A number assigned by a lodging merchant for tracking a guest's charges.
- Force
- The process by which a voice-authorized transaction is key-entered to be settled electronically with a batch of transactions. Also known as a post-auth.
- Foreign Currency Surcharge
- A new charge imposed by some credit card issuers that imposes a fee on purchases made in a foreign currency.
- FPO
- Flexible Payment Options - a product that allows merchants to design flexible payment plans to increase incremental sales.
- Frame Relay
- A TCP/IP link for data that has high transmission speeds, low network delay, high connectivity and efficient bandwidth use.
- Fraud Investigation
- The process of identifying suspicious merchant or cardholder activity.
- Front-End Network
- Network provider responsible for authorizing and capturing transactions and forwarding the information to the back-end network.
G
- Gateway
- Manages the electronic connection between consumers and their financial institutions and transmits data.
- Gift Card
- A reusable, stored-value card that enables merchants to have an electronic alternative to paper gift certificates.
- Good Faith
- An attempt by a card association member to resolve a dispute with another member in writing. A good-faith attempt at resolution must be made before filing
H
- Hard Decline
- A declined authorization attempt resulting from a lost or stolen card, pick-up card, etc. A Code 10 call should be made by the merchant to the authorization center.
- HCS
- Host Capture System - a transaction is transmitted with an authorization request to the host computer at the front end, the information is captured at the host, then sent back to the POS device. Since the information is already stored at the host, it can be settled without the merchant performing a settlement function.
- Hologram
- A laser-created photograph that uses a three-dimensional image that is difficult to duplicate. Used as an anti-counterfeiting measure on many payment cards.
I
- Idle Prompt
- The standard display on a payment card terminal waiting to process the next transaction.
- Imprinter
- A device used to imprint embossed card information onto a sales draft for payment card transactions. An imprinter is used if the card is present and the POS device cannot read the contents of the magnetic stripe.
- Interchange
- The exchange of transaction data between acquiring and issuing institutions.
- Interchange Fees
- Fees paid by the acquirer to the issuer to compensate for transaction-related costs. MasterCard and Visa establish interchange fee rates.
- ISP
- Internet Service Provider - an organization that provides access to the Internet.
- Issuing Financial Institution, Issuing Bank
- The financial institution and member of Visa or MasterCard that holds contractual agreements with, and issues cards to, cardholders. They issue the credit card and bills the customer for purchases made against the card account. Also see national issuers
L
- Leased Line
- A dedicated telecom connection with either point-to-point or multi-point configuration.
- Level I Data
- Level I purchasing card data include the same information captured during a traditional credit card purchase transaction. This includes: total purchase amount, date, merchant category code and supplier/retailer name.
- Level II Data
- Level II purchasing card data includes the same information captured at Level I, plus the following: sales tax amount, customer's accounting code, merchant's tax ID number, applicable minority- and women-owned business status, and sales outlet zip code.
- Level III Data
- Level III purchasing card data includes the same information captured at Levels I and II, plus the following: quantities, product codes, product descriptions, ship to zip, freight amount, duty amount, order/ticket number, unit of measure, extended item amount, discount indicator, discount amount, net/gross indicator, tax rate applied, tax type applied, debit or credit indicator, and alternate tax identifier.
- Lockbox
- A service that processes payments by check and credits the appropriate business.
M
- Magnetic Stripe
- A panel located on the back of a payment card containing magnetically encoded cardholder account information.
- Magnetic Stripe Reader
- A point-of-sale device that reads the encoded information from the magnetic stripe when the card is passed through the reader. Readers may read Track Two, which contains the cardholder account number and expiration date, or both Track Two and Track One, which contains the cardholder name.
- MasterCard International Incorporated
- A member-owned international bankcard association, governed by a board of directors, which licenses members to issue cards or accept merchant drafts under the MasterCard Program. MasterCard owns and operates its own international processing network.
- MasterCard
- MasterCard, a product of MasterCard International, is distributed by issuing financial institutions around the world. Card holders borrow money against a credit line and pay it back with interest if the balance is carried over from month to month. Its products are issued by 23,000 financial institutions in 220 countries and territories. In 1998, it had almost 700 million cards in circulation, whose users spent $650 billion in more than 16.2 million locations.
- MCC
- Merchant Category Code - a universal four-digit merchant classification code that identifies the merchant by type of processing, authorization and settlement. Similar to a Standard Industrial Classification (SIC), but more defined.
- Media
- The documentation of monetary transactions (i.e., sales drafts, credit slips, computer printouts, etc.).
- Media Retrieval Requests
- Media retrieval is the process of obtaining paper documents from a centralized location. There are two types of media retrieval requests: 1) requests for sales records from cardholders, and 2) requests for documentation in defense of a chargeback from card issuers.
- Member
- A financial institution that is a member of Visa and/or MasterCard. A member is licensed to issue cards to cardholders (issuer) and/or accepts merchant drafts (acquirer).
- Merchant
- Store owner or seller of products.
- Merchant Account
- An account setup by a Merchant Bank (in this case, Innovative Merchant Solutions) which is used by the Gateway to process your credit card transactions.
- Merchant Agreement
- The written contract between the merchant and acquirer that details their respective rights, responsibilities and warranties.
- Merchant Bank
- See Acquiring Financial Institution.
- Merchant Discount
- The fee an acquiring member charges the merchant to cover the costs of providing deposit credit and handling credit card sales transactions. See Discount Rate.
- MICR Number
- Magnetic Ink Character Recognition - the bank routing and transit, checking account number and check number encoded at the bottom of a check that can be used to authorize the check.
- MID
- Merchant Identification Number - The identification number assigned to a merchant by the acquirer.
- MOP
- Method Of Payment - the way a merchant chooses to accept payment for products or services. Examples include: MasterCard, Visa, American Express, Discover, Carte Blanche, Diners Club, JCB, Electronic Check and private label cards.
N
- National Issuers
- The overwhelming majority of credit cards in the U.S. come from a handful of national issuers, such as First USA, MBNA America and Bank of America. They often originate from lender-friendly states such as Delaware and South Dakota that impose no limits on what card holders can be charged.
- Network
- An entire system of communication hardware and software used to transfer electronic information during the authorization and settlement process.
- Non Face-to-Face Transaction
- Any transaction in which the card is not presented, such as a phone, mail or Internet purchase. See Card-Not-Present.
- No-Show
- A charge to a cardholder account by a lodging merchant if the person either fails to arrive or fails to cancel the guaranteed reservation.
O
- Offline Debit Card
- A new development in cards that share traits of both ATM and credit cards. Offline debit cards have the VISA or MasterCard logo on them and can be issued by a bank, either instead of or in addition to an ATM card. These cards can be used at any establishment which displays the VISA or MasterCard logo, but using them doesn't access a line of credit - it debits a customer's checking account. It is "offline" because the account isn't directly accessed - there's a delay of 24 to 72 hours before the debit is made in the account. If you sign a slip of paper to conclude the transaction, it was offline. In the U.S., no Personal Identification Number (PIN) is required to use an offline debit card.
- Offline Transaction
- A transaction that is authorized through a voice authorization and later keyed into a POS terminal prior to settlement.
- OK Number
- A validation number from the host computer confirming a successful batch deposit.
- Online Transaction
- A transaction that is authorized electronically from the front-end network.
- Online Debit Card
- An online debit card deducts funds from the bank account immediately, as soon as the card is used. It may have the VISA or MasterCard logo, or only the issuing bank's logo, like an ATM card. There is no delay for processing the transaction - the money is immediately deducted from your account. In the U.S., if you entered a Personal Identification Number (PIN) during the transaction, it was online.
- Over-the-limit Fee
- A fee charged for exceeding the credit limit on the card.
P
- PBX Access Code
- An access number that is dialed to reach an outside line.
- Personal Identification Number (PIN)
- As a security measure, some cards require a number to be punched into a keypad before a transaction can be completed. The number can usually be changed by the card holder.
- Pick Up Card
- An issuer's electronic response to an authorization request, asking that the card be retained by the merchant and returned to the issuer.
- PIN
- Personal Identification Number - a numeric code used as verification to complete a transaction via a payment card. The number is entered into a keypad and is encrypted to travel along with the authorization.
- Point of Sale (POS)
- Point Of Sale - the location at which a payment card transaction occurs, usually by way of a device such as a credit card terminal or cash register. Also an increasingly popular way for consumers to avoid ATM surcharges is to get cash returned from their online debit card via a cash return at the point of sale - such as a grocery store.
- POS Terminal
- A terminal at the point of sale, connected via telecommunication lines to a central computer. Authorization, recording and transmission of electronic transactions are performed through the terminal.
- Post-Auth
- A Post Auth confirms you are ready to capture payment of your existing Pre Authorized transaction. A Post Auth cannot be Voided.
- Posting
- The process of recording debits and credits to an account.
- Prenote
- In the electronic check-processing environment, a non-dollar transaction sent through the ACH network for the purpose of verifying the accuracy of the cardholder's account data.
- Pre-approved
- A credit card offer with "pre-approved" only means that a potential customer has passed a preliminary credit-information screening. A credit card company can spurn the customers it invited with "pre-approved" junk mail if it doesn't like the applicant's credit rating.
- Pre-Auth
- A Pre Auth is a type of authorization that reserves (holds) a pre determined dollar amount on the customer’s credit card for the merchant to Post Auth Capture in 7-14 days. If this transaction is not Post Authorized, then at the end of the hold period, the funds are automatically returned to the cardholder’s available credit. They (customer) are not billed in this example. A Pre Auth transaction cannot be Voided.
- Private Label Cards
- A private label card is issued by a retail outlet, such as a department store or gasoline company, and contains the logo of the retailer. It is accepted only by the retailer who issued it. Retailers partner with a bank or a card-issuing management company to back the cards.
- Processing Fees
- The fees associated with the processing of credit card transactions.
- Processor
- A company responsible for processing interchange transactions - operated by an acquirer or acting on the acquirer's behalf.
- Protocol
- A set of rules that allow data communications to work.
- Purchasing Card
- A payment card used by companies to replace paper invoices.
R
- Reason Code
- A two-digit code identifying the reason a chargeback was initiated.
- Re-authorization (re-auth, add auth)
- To request an additional amount to be authorized on an existing transaction. Used in the lodging industry when the original authorization is not sufficient to cover the charges.
- Rebate Card
- This is a card that allows the customer to accumulate cash, merchandise or services based on card usage
- Recurring Transaction
- A transaction charged to a cardholder's account (with prior permission) on a periodic basis for recurring goods and services, i.e., subscriptions or club memberships.
- Referral
- The message received from an issuing bank when an attempt for authorization requires a call to the Voice Authorization Center.
- Refund
- A refund occurs when the merchant rebates all, or a portion, of an original transaction amount to the cardholder. Refunds are made to the same card that was used for the original transaction. Similar to a Credit.
- Representment
- An attempt to reverse a chargeback initiated by a merchant or acquirer to the issuing bank that presented the chargeback, backed by supporting documentation.
- Retail Transaction
- A face-to-face transaction in which the cardholder presents a card to the merchant to pay for goods or services.
- Retrieval Request
- A request by the issuer to the acquirer for a copy of the original sales ticket.
- Reversal
- When an acquirer successfully represents a chargeback to the issuer, the chargeback is reversed and the funds are returned to the merchant.
- Revolver
- A term credit card issuers use for card holders who roll over part of the bill to the next month, instead of paying off the balance in full each month. About seven out of 10 card holders revolve the debt.
- ROM
- Read-Only Memory - memory and information that cannot be changed.
- RS232
- The standard port on POS device used to support a wireless transmission via VSAT, Frame, VPN or Motient. May also be used with various peripheral devices i.e. Check Reader or Personal Computer.
S
- Sales Transaction Fee
- The amount the financial institution charges a merchant for each sales transaction.
- SDK
- Software Development Kit - a "kit" that is built to help a developer incorporate software into another program or system.
- Secured Card
- A credit card that a card holder secures with a savings deposit to ensure payment of the outstanding balance if the card holder defaults on payments. It is used by people new to credit, or people trying to rebuild their poor credit ratings.
- Settlement
- The process in which a merchant transmits batches of transactions to the acquirer. In interchange, it is the process by which acquirers and issuers exchange financial data resulting from sales transactions, cash advances, merchandise credits, etc.
- SIC
- Standard Industrial Code - a universal four-digit code that designates a merchant's industry type. Similar to an MCC code.
- Smart Card
- A payment card with a built-in microprocessor (chip) that stores information. Smart cards can be used for stored-value cards, credit cards, loyalty programs and security access. Smart cards, sometimes called chip cards, contain a computer chip embedded in the plastic. Where a typical credit card's magnetic stripe can hold only a few dozen characters, smart cards are now available with 16K of memory. When read by a special terminals, the cards can perform a number of functions or access data stored in the chip.
- Soft Decline
- A declined authorization attempt that does not necessarily mean the card is bad (i.e., call referral, issuer unavailable or cardholder over limit). These transactions may be resubmitted a day or two later in an attempt to obtain a valid authorization.
- Split Dial
- The capability of a card terminal to dial different telephone numbers to obtain an authorization or settlement of different card types.
- Standard Card
- The basic card offered by issuers. Customers with higher incomes and good credit reports can qualify for the higher-limit gold and platinum cards.
- Stored Value Card
- A stored value card is used by a merchant to issue spending credit to their customers. The merchant's customers are given a magnetic stripe card in exchange for money received, merchandise returned or other considerations. The card represents a dollar value that the merchant's customer can either use or give to another individual. There is no security associated with the card itself. The actual record of the balance on the card is maintained on a stored value card database. Learn more...
- Submission
- A file sent by the merchant that contains one or more transactions.
- Summary Adjustment
- A correction to a deposit, made by the acquirer, when there is an error in the submitted deposit.
- Synchronous
- Communication method that transmits continuously with no stops and start bytes between information bytes.
T
- T (tiered)
- If the letter T appears after the annual percentage rate (APR) ,the interest rate is based on tiered pricing, with different periodic rates applied to different levels of the outstanding balance. The rate shown applies to the lowest of the balance tiers.
- T&E Cards
- Cards that are developed for and used primarily in travel-related services.
- T&E Merchant
- An airline, car rental company or lodging establishment with a primary function of providing travel-related services.
- TCS
- Terminal Capture System - the process in which transactions are stored in the terminal until the batch is settled to the host. Most often used in restaurant applications where tip adjustments need to be made.
- Teaser Rate
- Often called the introductory rate, it is the below-market interest rate offered to entice customers to switch credit cards
- Transaction Date
- The date that goods or services were purchased or the date the cash advance was made.
- Trans Union
- One of the three major Credit Reporting Agencies
- Two-cycle billing
- With the two-cycle method, the average daily balance is calculated from two billing cycles rather than one and finance charges are typically higher This method, in effect, wipes out the grace period for customers who carry a balance. If the bill is not paid in full at the first billing, interest becomes retroactive back to the purchase date. Most credit card issuers use the single-cycle average daily balance method to calculate finance charges.
- TID
- Terminal Identification Number - number identifying a merchant to the front-end network.
- Track One
- Track One information, stored on the magnetic stripe on the back of a card, has the cardholder's name in addition to the account number and expiration date stored in it.
- Track Two
- Track Two information, stored on the magnetic stripe on the back of a card, has the account number and expiration date.
- Transaction
- Any action between a cardholder and a merchant or member that results in activity on the account, such as a purchase, cash advance or credit.
- Transaction Date
- The actual date on which a transaction occurs.
- Transaction Fee
- The amount a merchant pays per transaction for processing.
V
- VISA a.k.a. VISA USA
- VISA cards, a product of VISA USA, are distributed by financial institutions around the world. A VISA card holder borrows money against a credit line and repays those funds with interest if the balance is carried over from month to month in a revolving line of credit. Nearly 600 million cards carry one of the Visa brands, and more than 14 million locations accept Visa cards.
- Valid Date
- The date embossed on a payment card stating when the card may first be used.
- VAR
- Value Added Reseller - a third-party that certifies their software to be used on a processor's system
- Voice Authorization
- Transactions authorized by a voice operator. Voice-approved transactions must be "forced" into a terminal batch for settlement.
W
- Warning Signs
- These are the signals that credit bureaus look for in credit card customers' credit reports. They include frequent late payments, over-the-limit fees, and frequent balance transfers.
Z
- Zero Floor Limit
- Requires that all transactions receive authorization.
Australia
Brazil
China
India
Mexico
Philippines
United Arab Emirates
Canada
United Kingdom
