| ABA
ROUTING NUMBER |
| Unique
bank identifying number that directs electronic ACH
deposits to the proper bank. This number is usually printed on the bottom
of a check with magnetic ink. |
| ACCOUNT
NUMBER |
| A
unique sequence of numbers assigned to a cardholder account which
identifies the issuer and type of financial transaction card. |
| ACCOUNT
NUMBER TRUNCATION |
A
security feature which refers to replacing digits in the cardholder’s
account number with the letter x so that the entire card number does not
print. It is required in some states.
|
| ACH |
| See
AUTOMATED CLEARINGHOUSE |
| ACQUIRER |
| A
bank that sponsors merchants for the acceptance of credit card
transactions. |
| ACQUIRING
BANK |
| The
bank that maintains the merchant relationship and receives all
transactions from the merchant. |
| ADDRESS
VERIFICATION SYSTEM |
| Address
Verification Service is a system available to merchants who key
transactions which matches the street number and zip code of the
cardholder with the information given to the merchant. This allows the
merchant to verify that the person requesting the goods or services is the
person who owns the cards. |
| APPROVAL |
| A
code issued by a card issuing bank allowing a sale to be charged against a
cardholder's account. Approval means that the amount is within the
cardholder's remaining credit limit and the card has not been reported
lost or stolen. Approvals are requested via an AUTHORIZATION. |
| AMERICAN
EXPRESS |
| An
organization that issues cards and acquires transactions, unlike VISA
and MASTER CARD, which are bank associations. |
| AMEX |
| See
AMERICAN EXPRESS. |
| ARBITRATION |
| The
procedure used to determine the responsibility for a chargeback-related
dispute between two members. |
| ASYNCHRONOUS |
| A
method of transmitting data in which the data elements are identified with
special start and stop characters. An asynchronous modem cannot
communicate with a synchronous modem. Compare with SYNCHRONOUS
(e.g. standard Hayes compatible modem). |
| ATM |
| ATM is an acronym for Automated Teller Machine. |
| AUTHORIZATION |
| The
request to charge a cardholder. Reduces the cardholders "Open to
Buy" but does not actually charge the account. Authorization must be FORCED
in order to charge the account. If not used within a certain time period,
the authorization will expire. Time period determined by issuing bank. |
| AUTHORIZATION
CODE |
| The
numerical or alphanumerical code sent by the card issuer, given to a sales
transaction as verification that the sale has been authorized. The
authorization code is always included on the merchant sales draft. |
| AUTH
ONLY |
| A
transaction in which the merchant does not intend to charge the cardholder
until a later time, if at all. See PRIOR
AUTHORIZATION. |
| AUTOMATED
CLEARING HOUSE |
| A
method of transferring funds between banks via the Federal Reserve System
used by most, but not all, financial institutions. |
| AVERAGE
TICKET |
| The
average dollar amount of merchant credit transactions. |
| A.V.S. |
| See
ADDRESS VERIFICATION SERVICE |
| BANK
IDENTIFICATION NUMBER |
| The
digits of a credit card that identify the ISSUING
BANK. Sometimes the first six digits. Often referred to as a BIN. |
| BASIS
POINT |
| One
one-hundredth of a percent. DISCOUNT rates are
expressed as basis points. |
| BATCH |
| A
collection of transactions. Usually a merchant has on batch per day or per
shift. |
| BATCH
PROCESSING |
| A
type of data processing where related transactions are transmitted as a
group for processing. |
| B.I.N. |
| See
BANK IDENTIFICATION NUMBER. |
| BUNDLED
RATE |
| A
discount rate which includes communication costs as well as transaction
fees. Also referred to as a flat rate. |
| CAPTURE |
| In
a terminal based system, refers to SETTLEMENT.
In a host based system, transactions are usually captured when authorized,
but may still require settlement. |
| CARD
ISSUER |
| See
ISSUER, ISSUING BANK. |
| CARD
VALIDATION CODE |
A
unique encrypted 3-digit value that is encoded in the magnetic stripe and
printed on the back of a MasterCard. It is used as an additional means of
Cardholder validation during the authorization or referral process.
|
| CARD
VERIFICATION VALUE 2 |
A
unique encrypted 3-digit value that is encoded in the magnetic stripe and
printed on the back of a Visa Card. It is used as an additional means of
Cardholder verification during the authorization or referral process.
|
| CHARGEBACK |
| The
act of taking back funds that have been paid to a merchant for a disputed
or improper credit card transaction. This procedure is initiated by the
issuer after the acquirer has begun the clearing process. |
| CHARGEBACK
PERIOD |
| The
number of calender days in which a MEMBER may charge
sales back to the merchant, beginning with the day after the sate the
record is first received by the member or agent and continuing until the
end of the day on which it is dispatched as a chargeback item. |
| CHARGEBACK
REASON CODE |
| A
two digit code identifying the specific reason for a chargeback. |
| CHECK
GUARANTEE |
| A
service which guarantees check payment (up to the limit defined for the
account), provided that the merchant follows correct procedures in
accepting the check. The service determines whether the check writer has
previously written delinquent checks. |
| CLEARING |
| The
process of exchanging financial details between an ACQUIRER
and an ISSUER to facilitate posting of a cardholder's account and
reconciliation of a customer's settlement position. |
| CLOSE
BATCH |
| The
process by which transactions with authorization codes are sent to the
processor for payment to the merchant. |
| COPY
REQUEST |
| See
RETRIEVAL REQUEST. |
| CREDIT |
| The
return of funds to a cardholder's account for a sale that has already been
authorized and settled. |
| CVC |
See
Card Validation Code.
|
| CVV2 |
See
Card Verification Value 2.
|
| DDA |
| See
DEMAND DEPOSIT ACCOUNT. |
| DEBIT
CARD |
| An
ATM bankcard used to purchase goods and services ant
to obtain cash, which debits the cardholder's personal deposit account.
Requires a PIN (Personal Identification Number) for
use. |
| DECLINE |
| Response
to transaction request meaning that the card issuing bank will not
authorize the transaction. |
| DEPOSIT |
| When
a merchant closes a batch and sends the transactions to the host computer
for settlement. Compare to RELEASE. Batches should
be closed on a daily basis to ensure the lowest discount rates. |
| DEMAND
DEPOSIT ACCOUNT |
| A
standard checking account into which electronic funds can be transferred. |
| DISCOUNT
RATE |
| Amount
charged to a merchant by the ACQUIRING BANK for
processing a transaction. It is usually a percentage of the transaction
amount. The rate is typically based on transaction volume (total dollars)
and average ticket. |
| DRAFT
CAPTURE |
| Refers
to SETTLEMENT. |
| ELECTRONIC
DRAFT CAPTURE |
| A
system in which each transaction is routed to the host computer for
processing and storage. The stored transactions are used to create
settlement files and transactions reports. |
| ELECTRONIC
FUNDS TRANSFER |
| The
paperless act of transmitting money through a computer network. Usually
does not refer to CHECK GUARANTEE. |
| ENCRYPTION |
| The
process of encoding a PIN pad with the processor's
configuration and key injection for the purpose of accepting debit cards.
Most common formats are DUKPT (Derived Unique Key Per Transaction) and
Masterkey (MasterCard's debit key encryption format). |
| EXTERNAL
SALES AGENT |
| AMEX
term for ISO's. |
| FLOOR
LIMIT |
| This
was a preset limit established by issuer the allowed merchants to accept
credit card sales with authorization provided the merchant check to see
that the card number was not listed on a Warning Bulletin for lost or
stolen cards. Floor limits are now rarely used. |
| FORCE |
| A
sale transaction for which a merchant previously received a voice
authorization. A Force is done so that the previously authorized
transaction can be settled and the merchant can receive funds. Also known
as POST AUTHORIZATION. |
| HARD
COPY |
| A
paper copy of a transaction. |
| HOST
CAPTURE |
| Type
of transaction capture in which transaction information is stored in the
processor's host computer and not at the merchant's POS
system. Compare to TERMINAL CAPTURE. Settlement
occurs at the host computer and is automatic: no merchant initiation is
required. |
| HOST
COMPUTER |
| Refers
to the computer at the processor that is dialed for authorization and
settlement. |
| HOST
SETTLE |
| The
Base I authorization system automatically closes a batch. |
| IMPRINT |
| Can
be electronic (by swiping a card thru a card reader) or manual (by
obtaining a physical imprint using an imprinter). One of the two is always
required on a credit card transaction to prove that the card was present. |
| INTERCHANGE |
| The
flow of information between issuers and acquirers, e.g. transactions,
retrieval requests, chargebacks. |
| ISO |
| Refers
to Independent Sales Office. |
| ISSUER |
| A
bank that provides credit cards to consumers. |
| ISSUING
BANK |
| Same
as the issuer. The issuer of the customer credit card. |
| KEYED
ENTRY |
| See
MANUAL ENTRY. |
| LOCAL
REVIEW |
| The
ability for a merchant to review, from their terminal, the contents of a
batch before settlement. |
| MAG
STRIPE |
| See
MAGENTIC STRIPE. |
| MAGNETIC
STRIPE |
| A
stripe on the back of a bankcard that contains magnetically encoded
cardholder account information. The name of the cardholder is stored on
Track I and the account number and expiration date are stored on Track II. |
| MANUAL
ENTRY |
| Credit
card information that is entered via terminal keypad or keyboard instead
of swiping the card through a card reader. |
| MASTERCARD |
| An
association of banks that governs the issuing and acquiring of MasterCard
credit card transactions and Maestro debit transactions. |
| MEMBER |
| A
financial institution that is a member of VISA USA
and/or MASTER CARD International. |
| MEMBER
SERVICE PROVIDER |
| MasterCard
term for a company that is sponsored by an acquiring bank to solict and
sometimes support merchants. |
| MERCHANT |
| A
retailer, or any other entity (pursuant to a Merchant agreement), that
agrees to accept credit cards, debit cards, or both, when properly
presented. |
| MERCHANT
AGREEMENT |
| A
written agreement between a merchant and a bank (or possibly a merchant, a
bank, and an ISO) containing their respective
rights, duties, and warranties with respect to the acceptance of the
bankcard and matters related to bank card activity. |
| MERCHANT
BANK |
| A
bank that has entered into an agreement with a merchant to process bank
card transactions, also called the ACQUIRER or ACQUIRING
BANK. |
| MERCHANT
CATEGORY CODE |
| A
code assigned by an Acquirer to a Merchant to identify the Merchant's
principal trade, profession, or line of business. This four digit code is
also referred to as the SIC CODE. |
| M.I.D. |
| Refers
to the Merchant Identification Number. This unique number identifies a
merchant. |
| MID-QUALIFIED |
| A
broad term that describes a transaction that did not interchange at the
best rate because it was entered manually or was not settled in a timely
manner. |
| M.I.C.R.
(Magnetic Ink Character Recognition) |
| Characters
(i.e. account information) printed on a check with ink containing
particles of a magnetic material. |
| MODEM |
| Stands
for MOulatorDEModulator. An electronic telecommunications hardware device
used by the terminal or PC POS to dial up the PROCESSOR. |
| MOTO |
| Refers
to Mail Order/Telephone Order. |
| MULTI-TRANS
MODE |
| A
HOST COMPUTER which allows multiple transactions
with the same telephone call. |
| NODE |
| One
of many points that are connected together to form a network. The terminal
dials the closest node and becomes connected to a nationwide
telecommunications network. |
| NON-QUALIFIED |
| A
broad term that describes a transaction that did not interchange at the
best rate. Usually a government, business, or foreign card, or a
transaction that was not settled in a timely manner. |
| OPEN
TO BUY |
| The
amount of credit available at a given time on a card holder's account. |
| ORIGINAL
DRAFT |
| The
original copy of the forms and signature used in the transaction. Also
referred to as the HARD COPY. |
| PIN |
| Personal
Identification Number used by cardholder to authenticate card ownership
for ATM or debit card transactions. The cardholder
enters his/her PIN into a PIN pad. Customer entry of his/her PIN is
required to complete an ATM/Debit card transaction. |
| PIP |
| Refers
to Plural Interface Processing. Split dial capability that allows terminal
to process American Express directly thru the AMEX
network, thereby eliminating AMEX authorization fees. |
| POINT
OF SALE (POS) |
| The
place and time at which a transaction occurs. This term also refers to the
devices or software used to capture transactions. |
| POST
AUTHORIZATION |
| A
sale transaction for which you received a VOICE
AUTHORIZATION at an earlier time. |
| POSTING |
| The
process of recording debits and credits to individual cardholder account
balances. |
| PRIOR
AUTHORIZATION |
| An
authorization that has been obtained previously, either through operator
or through credit card equipment. |
| PRIVATE
LABEL CARD |
| A
bank card that can be used only in a specific merchant's store. Typically
not a bank card. |
| PROCESSOR |
| A
transaction processor; a large computer center that processes data from
credit card transactions and settles funds to merchants. |
| QUALIFICATION |
| A
level at which a transaction interchanges. Level of qualification
(qualified, mid-qual, e.t.c.) is dependent on how credit card number is
entered, how quickly a transaction is settled, the type of industry,
specific information, etc. |
| RECEIPT |
| A
hard copy description of the transaction that occurred at the point of
sale. Minimum information contained on a receipt is: date, merchant name
and location, account number, type of account used (VISA,
AMEX, etc), amount, reference number and/or
authorization number, and action code. |
| REFERENCE
NUMBER |
| A
code given to a transaction by Host based processors. |
| RELEASE |
| A
BATCH is sent to the Base II processor for SETTLEMENT. |
| RETREIVAL
REQUEST |
| A
request to a merchant for documentation concerning a transaction, usually
a cardholder dispute or suspicious sale/return. A Retrieval Request can
lead to a CHARGEBACK. |
| SETTLEMENT |
| The
process by which transactions with authorization codes are sent to the
processor for payment to the merchant. |
| S.I.C.
CODE |
| Refers
to Standard Industry Classification. These codes are four digits used to
identify the business type. |
| SWIPED
CARD |
| Credit
card information that is read directly into the terminal as a result of
swiping or sliding the credit card thru a card reader. The information
magnetically encoded in the magnetic stripe is transmitted. This
information includes secret data that helps validate the card. |
| SYNCHRONOUS |
| A
method of transmitting data in which data elements are sent at a specific
rate so that start and stop characters are not needed. Used by older
modems, AMEX PIP terminals, etc.
Compare to ASYNCHRONOUS. |
| T
& E CARD (Travel and Entertainment) |
| Credit
cards that typically require payment in full each month, e.g. American
Express, Diner's Club, Carte Blanche. |
| TERMINAL
CAPTURE |
| Type
of software in which transaction information is stored in software, not at
the host computer. Merchants using terminal capture must initiate SETTLEMENT
at the end of each day or shift. Compare to HOST
SETTLE. |
| THIRD
PARTY PROCESSOR |
| A
non-member agent, employed by an acquiring bank, which provides
authorization, settlement, and merchant services to a merchant. |
| TRANSACTION |
| Action
between cardholder and merchant that results in activity on a cardholder
account. |
| TRANSACTION
FEE |
| A
per transaction charge incurred by merchants. This is in addition to the
percentage DISCOUNT fees. |
| TRANSACTION
FILE |
| A
file created by processors that contain all of the transactions for the
previous day. Some processors create two files, one of authorized
transactions and one of settled transactions. |
| VISA |
| An
association of banks that governs the issuing and acquiring of Visa credit
card transactions. |
| VOICE
AUTH |
| A
transaction authorization that is provided by an operator, usually when an
issuer sends a "Please Call" message to the merchant instead of
an authorization number. |
| VOID |
| The
reversal of a current transaction, one that has been authorized but not
settled. Settled transactions require processing of a CREDIT
in order to be reversed. |
