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A
ACH
See Automated Clearing House. |
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Acquiring Financial
Institution
An acquiring financial institution (or "acquirer") contracts
with the bank and merchants to enable credit card transactions.
The acquirer deposits the daily credit card totals and debits
the end-of-month processing fees from the merchants' accounts.
Acquirer
See Acquiring Financial Institution.
API
See Application Programming Interface.
Authorization
The process of verifying the credit card has sufficient
funds (credit) available to cover the amount of the transaction.
An authorization is obtained for every sale. An approval
response in the form of a code sent to a merchant's POS
equipment (usually a terminal) from a card issuing financial
institution that verifies availability of credit or funds
in the cardholder account to make the purchase. Also see
Point-Of-Sale.
Automated Clearing House
A nationwide electronic funds transfer system that provides
for interbank clearing of electronic payments for participating
financial institutions.
AVS
See Address Verification System.
Address Verification System
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. The street address and
postal code of the billing address are compared to the billing
address on file for the credit card. If the address does
not match then the transaction is declined. AVS is designed
to help combat fraud in non face-to-face transactions.
Application Programming Interface
The interface (calling conventions) by which an application
program performs operations. A programmer uses this specification
to make use of software.
Auth
A charge type that holds funds on a credit card without
billing the card. An auth must be followed by a capture
in order to complete the transaction.
B
Bankcard
A credit card issued by a Visa or MasterCard-sponsored financial
institution. (American Express, Discover, Diners Club, JCB,
etc., are issued directly from their respective operations,
rather than through banks.)
Batch
The accumulation of captured credit card transactions in
the merchant's terminal or POS awaiting settlement.
Browser (Web-browser)
Software for viewing Internet documents (web pages).
C
CA
See Certificate Authority.
Capture
The submission of an electronic credit card transaction
for financial settlement. Authorized credit card sales must
be captured and settled in order for a merchant to receive
funds for those sales. Also see Settlement.
Cardholder
Any person who holds a payment card account (bankcard or
otherwise). Person that uses a credit card to purchase goods
and services.
Cardholder Information Security Program (CISP)
The Visa CISP program ensures that its merchants, payment
companies and acquiring banks meet high security standards
for card not present transactions. The industry-wide standards
require that sensitive credit card data is protected when
presented to merchants through direct mail, over the telephone
or online. The standards were established to help lower
the risk of fraud and improve consumer confidence.
Card Identification Number (CID)
American Express's implementation of a credit card verification
value. A four digit number on the front of an American Express
card.
Card Validation Code
MasterCard's implementation of a credit card verification
value.
Card Verification Value 2
Visa's implementation of a credit card verification value.
Certificate Authority (CA)
A Certificate Authority or CA, is a trusted third-party
company that issues digital certificates. A digital certificate
verifies that the user sending information is who they say
they are and provides a means to encrypt closed two-way
communication between the sender and the receiver of data.
Chargeback
A credit card transaction that is billed back to the merchant
after the sale has been settled. Chargebacks are initiated
by the card issuer on behalf of the cardholder. Typical
cardholder disputes involve product delivery failure or
product/service dissatisfaction. Cardholders are urged to
try to obtain satisfaction from the merchant before disputing
the bill with the credit card issuer.
CID
See Card Identification Number.
CISP
See Cardholder Information Security Program.
Credit
A charge type that debits the merchant and transfers the
total to a credit card (See also independent credit and
dependant credit).
CVC
See Card Validation Code.
CVV
See Credit Card Verification Value.
CVV2
See Card Verification Value 2.
Credit Card Verification Value
CVV refers to the credit card verification numbers embossed
or imprinted on credit cards to reduce fraud risk in card-not-present
transactions. All credit card brands use some kind of Credit
Card Verification Number, though they are named differently:
CVV2 for Visa, CVC2 for MasterCard and CID for American
Express. In all cases, it is a 3-4 digit code that is printed
on the credit card. CVV ensures that the person using the
card in card-not-present transactions has physical possession
of the credit card.
D
Dependant Credit
A credit that references a previous transaction. The credit
amount cannot be more than the credit card was originally
billed for.
Digital Certificate
Contains the name, serial number, and expiration date of
the certificate holder. The digital certificate also contains
the certificate holder's public key (used for encrypting
data sent over the Internet), and is digitally signed by
the Certificate Authority to verify its authenticity.
Discount Rate
The percentage of sales amounts that the bankcard acquirer
or T&E card issuer charges the merchant for the settlement
of the transactions.
E
E-check
A generic term for an ACH debit to a consumer account that
is originated on the Internet, at the point of sale, over
the telephone, or by a bill payment sent through the mail
or dropped in an unattended dropbox.
Electronic Check
The term "electronic check" is used to refer to several
types of electronic transactions. It is a a catch-all term
used loosely to refer to any attempt to initiate payment
through PCs, the Internet, and computer systems.
Types of electronic checks include:
ACH-based electronic check: A payment that begins as a paper
check is converted into, or truncated to, an ACH debit entry:
The paper check is not processed.
Electronic network electronic check: A payment that begins
as a paper check is converted into, or truncated to, an
electronic network entry, using networks such as an ATM
network or a credit card network. The paper check is not
processed.
Internet or telephone-initiated payments: A transaction
that is initiated over the Internet or via phone, with the
debit carried out by an electronic debit, usually an ACH
debit.
Encryption
A method of changing data into secret code. Encrypted files
can only be read if they can by decrypted into their original
form by means of a key or password. Encryption is the cornerstone
of data security. Data that is not encrypted is said to
be in "plain text" form, readable by anyone who can view
a text file.
F
Follow-on transaction
A transaction that relies on a previous transaction to complete.
Dependant credits, captures and voids are follow-on transactions.
G
Gateway
An interface to a financial institution that allows the
processing of credit card transactions.
H
HTTP
See HyperText Transfer Protocol.
HTTPS
See Secure HyperText Transfer Protocol.
HyperText Transfer Protocol
A protocol used for the transmission of web pages and other
documents and files over the World Wide Web.
I
Independent credit
A credit that does not reference a previous transaction.
Interchange
The standardized electronic exchange of financial and non-financial
data associated with sale and credit data between merchant
acquirers and card issuers on various types of MasterCard
and Visa transactions.
Interchange Fee
A fee paid by an acquirer to an issuer for transactions
entered into interchange. The interchange fee is a percentage
applied, according to Visa/MasterCard regulations, to the
dollar value of each transaction. There are multiple categories
of interchange, and Visa and MasterCard each have their
own criteria for their own categories. A transaction must
meet the specified criteria for a category in order for
that category's rate to be applied. Each transaction is
evaluated individually, so various interchange rates may
apply within one batch of merchant transactions.
Issuer
The issuing financial institution extends credit to a cardholder
through bankcard accounts. The financial institution issues
a credit card and bills the cardholder for purchases against
the bankcard account. Also referred to as the cardholder's
financial institution.
Issuing Bank
See Issuer.
J
JCB J/Secure
JCB's implementation of payer authentication. Similar to
MasterCard SecureCode and Verified by Visa.
K
L
M
Mail Order/Telephone Order (MO/TO)
Credit card transactions initiated via mail, email or telephone
orders. Also known as card-not-present transactions.
MasterCard SecureCode
MasterCard payer authentication technology that runs on
a Web-browser and verifies that a MasterCard cardholder
is authorized to use the card. SecureCode qualifies the
transaction for a guaranteed payment that protects against
cardholder unauthorized chargebacks. PPI BuyerAuth is an
optional product feature that implements MasterCard SecureCode,
as well as Verified by Visa and JCB J/Secure.
Merchant Identification Number (MID)
This number is generated by a processor/acquirer and is
specific to each individual merchant location. This number
is used to identify the merchant during processing of daily
transactions, rejects, adjustments, chargebacks, end-of-month
processing fees, etc.
Merchant Support Center
Once merchants are actively processing transactions through
our Internet payment gateway, our web-based Merchant Support
Center logs all transaction activity so merchants can review
transaction details, process batch payments, run voids and
captures, and perform statistical analysis.
MID
See Merchant Identification Number.
MOTO
See Mail Order/Telephone Order.
MSC
See Merchant Support Center.
N
Non-Qualified Transaction Fees (NON-Qual)
Bankcard sales transactions that do not meet set Visa/MasterCard
criteria for that particular merchant and are processed
at a higher interchange rate. An example of this is a merchant
that is retail (card present) that processes a card-not-present
transaction (or manually enters card data rather than swiping
the magnetic stripe through the terminal). The merchant
will pay the difference between what they should have paid
on retail and what they actually qualified for (card not
present). This difference is called non-qualified interchange
fees.
O
P
PCI
see Payment Card Industry Data Security Standard.
POS
See Point-of-Sale.
Payment Card Industry Data Security Standard
The PCI Data Security Standard is a security protocol and
requirement for the safeguarding of cardholder data in the
payments industry. The PCI Data Security Standard consists
of 12 main requirements and other sub-requirements that
must be followed by merchants and service providers that
store, process or transmit credit card information.
Payment Gateway
Payment Gateway companies help other Processors conduct
secure business on the internet using Secure Socket Layer
(SSL) technology. They provide a system that passes credit
card data, authorization requests, and authorization responses
over the Internet using encryption technology.
The transaction information is sent by the Payment Gateway
secure server via leased line to the credit card network
where the validity of the card is checked and the availability
of funds on that account is verified. An authorization code
is returned via leased line to the Payment Gateway; the
authorization is encrypted by the Payment Gateway and transmitted
in encrypted form to the web server of the merchant, which
triggers fulfillment of the order.
Payer Authentication
A means of verifying the identity of a cardholder that is
making an online purchase. Payer Authentication products,
such as PPI BuyerAuth, implement credit card vendor verification
technology, such as MasterCard SecureCode, Verified by Visa,
and JCB J/Secure. Merchants using payer authentication are
guaranteed payment on authenticated transactions. Payer
authentication reduces fraud related losses, such as chargebacks.
Payment Cartridge
A payment solution that provides integrated credit card
processing to shopping carts and enterprise applications.
Payment Plug
A payment solution that provides an API for customized integration
of credit card processing with merchant applications.
Point-of-Sale
A transaction that occurs in the real world at the point-of-sale.
POS software, such as VirtualPay POS, allow merchants to
process card present transactions at the physical point-of-sale
using a Web-based virtual terminal that performs the same
functions as a physical point-of-sale terminal.
Processor
A Processor is the company that actually routes an Authorization
Request from a Point of Sale device (such as a Verfone credit
card terminal) to Visa or Master Card, and then arranges
for Fund Settlement to the merchant. Such processors are
traditionally accessed via direct dial out modems connecting
to their system.
Processors need to have a Sponsoring Bank in order to gain
access to the Visa and Master Card networks. When a Processor
or other entity has made such an arrangement with a Sponsoring
Bank to resell their services, they are called an Agent
of that bank.
Any entity that sells Visa or Master Card must disclose
themselves as an Agent of their Sponsoring Bank. Such sales
entities may be a Processor, or an ISO/Agent of the Processor
or Processor/Bank alliance.
Many banks are also their own processors, while other banks
will use a Third Party Processor to handle this processing
for them (in their own brand name in some cases).
Q
R
Real-Time Processing
Real-Time Processing means that when a web site's customer
conducts an online purchase, that the check or credit card
information is conveyed to the Processor at that exact time
so that an authorization can be requested and received at
that moment. Real-Time Processing always implies that a
Secure Payment Gateway is being utilized, whether proprietary
or third party.
Recurring Payments
Payments that occur at set intervals.
S
Sale
A charge type that bills a customer in one step. A sale
is the equivalent of an auth followed by a capture.
Secure HyperText Transfer Protocol
HTTPS is a protocol used for the transmission of sensitive
documents and files over the Internet. HTTPS pages are require
SSL.
Secure Sockets Layer
A protocol for transmitting sensitive documents and data
securely. SSL works by encrypting data then transmitting
it via a secure connection where it is decrypted by the
recipient. Web pages that use SSL are hosted HTTPS (Secure
Hypertext Transfer Protocol) rather than HTTP.
Settlement
The process of sending a merchant's batch to the network
for processing and payment. For non-bankcards, the issuer
pays the merchant directly (less applicable fees) and then
bills the cardholder. For bankcards, the acquirer pays the
merchant (less applicable fees) with funds from Visa/MasterCard.
The bankcard issuer then bills the cardholder for the amount
of the sale. Also see Capture.
Shopping Cart Software
These applications typically provide a means of capturing
a client’s Credit Card information, but they rely on the
Software Module of the Secure Gateway Provider, in conjunction
with the Secure Payment Gateway, in order to conduct secure
Credit Card transactions online.
SSL
See Secure Sockets Layer.
T
Terminal Identification Number (TID)
A unique number assigned to each point-of-sale or virtual
terminal.
TID
See Terminal Identification Number.
H
V
VBV
See Verified by Visa.
Virtual Terminal
A Web-based credit terminal that performs the same processing
functions as a physical point-of-sale terminal. A merchant
logs on to a secure web page, enters credit card information
into a Web form, and submits the transaction data for processing.
PPI's VirtualPay and VirtualPay POS are virtual terminals.
Verified by VISA
VBV enabled credit cards have a unique password associated
with them to provide additional on-line fraud protection.
Visa's implementation of payer authentication similar to
MasterCard SecureCode and JCB J/Secure.
Void
A charge type that cancels a previous transaction. That
transaction will not appear on the buyer's credit card bill.
W
WML
See Wireless Markup Language.
Wireless (Wireless Device)
A term used to describe handheld devices, such as PDAs (Personal
Digital Assistants), and cell phones, that can connect to
the Internet. See also Wireless Markup Language.
Wireless Markup Language
WML is a markup language used to transmit web pages and
other Internet documents and files to wireless devices such
as handheld devices (PDAs and cell phones).
X
Y
Z
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© Copyright 2011 CardFlex, Inc. All rights reserved. CardFlex is a registered MSP of Pacific Mercantile Bank. |
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