A -
ABA Routing Number - Also referred to as Transit Routing Number. Directs electronic ACH deposits to the proper bank institution.
ACH - The electronic funds transfer system controlled by the Federal Reserve. Merchant's funds are deposited directly into their business account via ACH (Automated Clearing House).
Acquiring Bank - Bank or financial institution that acquires all merchant's sales drafts and credits the tickets' value to the mechant's account.
Authorization - A process defined in operations regulations whereby a transaction is approved by or on behalf of an issuer; commonly understood to be receiving of a sales validation by the merchant, by telephone, or authorization terminal.
AVS (Address Verification System) - An authorization process that matches the card holder's name with their application address, specifically zip code. Used primarily for Internet and Mail Order/Telephone Order sales.
B -
Back-End Processor - A vendor that records merchant credit card transactions, processes interchange and chargebacks, produces monthly merchant statements and provides daily reporting for fraud control and accounting purposes.
Bank Identification Number (BIN) - A unique series of numbers assigned by the card associations to a principal member institution that identifies the member in transaction processing. It is the first three to six digits of a standard cardholer account number.
Bankcard - A card issued by a financial institution and used for financial transactions.
Basis Point - A basis point is 1% of 1% (example: 1.99% = 199 basis points).
Batch - A collection of credit card transactions saved for submitting at one time, usually each day.
C -
Card Associations - The term "Card Associations" refers to V/MC.
Card Issuer - The financial institution or company that issues a credit card to a cardholder.
Capture - The submission of a credit card transaction for processing and settlement.
Cardholder - A person who has been issued a financial transaction card.
Chargeback - The procedure wherein a cardholder's issuing bank electronically charges an interchange transaction back to the Acquirer in accordance to card association regulations. Chargebacks often result from one of the following: no imprint, non-receipt of merchandise, expired card, no cardholder signature, etc.
Check Guarantee - A merchant service that validates payment by personal or company check. This service guarantees that if the check is returned for insufficient funds, the merchant can collect payment (up to a specified amount) from the check Guarantee Company.
Check Verification - A service provided in which a merchant accesses a national negative file database through their terminal to verify or authorize the person has no outstanding bad check complaints at any of the member merchants. This is not a guarantee of payment to the merchant.
Clearing - The accounting process wherein the Issuing and Acquiring banks exchange financial transaction information. Clearing facilities posting of a cardholder's accounting and reconciling a customer's settlement position.
Code 10 Authorization - This is a voice authorization code that you might initiate when you suspect a card is stolen or fake, or when a customer is acting suspiciously.
CVC/CVV - Card Verification Code/Value. A unique value calculated from the data encoded on the magnetic stripe of a credit card, validating card information during the authorization process.
D -
Debit Card - A card that accesses funds on deposit (i.e. savings or checking) at the cardholder's financial institution.
Discount Rate - A quoted percentage fee taken out of each sale transaction by the merchant's bank or processor to cover processing services.
E -
EBT - (Electronic Benefits Transfer) The electronic delivery of government benefit funds (i.e. food stamps, Social Security).
F -
Front-End Processor: Front-end processors provide the communications systems that connect the merchant's point-of-sale device to the front-end's credit card authorization and data capture networks. Front-end networks perform authorization and capture of merchant credit card transactions.
I -
Imprinter - A devide used by merchants to imprint embossed card information onto the sales drafts for bankcard transactions.
Interchange - The term used to describe the exchange of credit card transaction data between Acquirers and Issuers (or the clearing and settlement system).
Interchange Network - An electronic network, maintained by the card associations that exchanges data related to the value of card sales and credits among Issuers and Acquirers.
Interchange Rate - The percentage fee (set by the card associations) that is taken from each credit card sale and paid to the Issuing Bank by the Acquiring Bank for processing the transaction.
Issuing Bank - Any financial institution that establishes and maintains customer credit lines that are accessed through the use of a card.
J -
JCB - Japanese Credit Bureau. Issuers of the JCB card.
M -
Magnetic Stripe - A stripe on the back of the bankcard that has been encoded with the cardholder's account information.
Merchant - A company or organization that requires credit card authorization services to process the sale of goods and services.
Mid-Qualifying Transaction - A transaction that does not qualify for the lowest quoted interchange level. Usually a manually key-entered transaction with the consumer present.
MOTO Mail Order/Telephone Order - The purchase of goods and services by credit card when the card itself is not present.
N -
Non-Qualifying Rate - The interchange rate that is incurred as the result of a transaction not meeting certain minimum requirements.
P -
Purchasing Card - A card designed to help companies control authorization, tracking and reconciliation of smaller employee purchases. When an employee purchases goods or services, the purchasing card transaction sends both standard transaction data and accounting information back to the corporation.
R -
Retrieval - A request made by a cardholder's Issuing Bank for a copy of a specific sales draft.
Retrieval Notice - A form sent from the Issuing Bank to the merchant's Acquiring Bank requesting a copy of the sales draft for a sale transaction. If a legible copy of the sales draft is not returned within a specified number of days, a chargeback will occur.
S -
Sales Draft - The paper form, either electronically or manually imprinted, documenting a sale transaction and requiring a cardholder signature.
Settlement - Settlement is the excahange of actual funds and associated fees, between the parties involved in a sale transaction.
SIC Code - Also called MCC Code; a numeric merchant classification code that identifies a merchant based on the type of business they conduct and the transactions they process.
Smart Card - A card that looks similar to a credit card but contains a microprocessor which can perform calculations and/or store data. Smart cards are commonly used for storing financial and security records and prepaid transactions.
T -
T&E Card - Travel and entertainment card issued by a private, non-bank company which deals directly with the cardholder and merchant and which generally requires payment in full monthly.
Terminated Merchant File (TMF) - A file listing the names of merchants and their principals whose bankcard relationships have been terminated for some reason by an acquirer. Operated jointly by the card associations.
