Merchant Account Glossary (S-V)

<p><font face="tahoma,arial,helvetica,sans-serif" size="2"><br /><strong>Sales Draft</strong><br />A paper record evidencing the purchase of goods or services by a cardholder. <br /><strong><br />SDP Program</strong><br />Acronym for Site Data Protection program. An information security standard sponsored and promoted by MasterCard that applies to any organization that stores or handles their credit card account numbers.<br /><strong><br />Secure Payment Gateway</strong><br />Secure Payment Gateway companies help other Processors conduct secure business on the internet using Secure Socket Layer (SSL) technology.<br /><br />-They provide a system that passes credit card data, authorization requests, and authorization responses over the internet using encryption technology.<br /><br />-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.<br /><br />-Rather than try and create their own Secure Web System, many Banks and Bank/Processor alliances will use a Secure Payment Gateway Provider to perform this task for them.<br /><br /><strong><br />Secure Payment Software/Software Module/Payment Module</strong><br />-In order to conduct secure business on the web, the Secure Gateway Provider runs a Secure Host<br />System, and sells/licenses software modules that allow Shopping Carts and other applications to request and receive Credit Card Authorizations via their system using encrypted communications. (This is called Real Time Authorization.)<br /><br />-The other features of this licensed software are the functions provided to merchants online when they connect to the Secure Payment Gateway host; merchant can access their own account information, use a &ldquo;Virtual Terminal&rdquo; to conduct transactions, handle administrative tasks, etc. (These features all &ldquo;live&rdquo; on the provider&rsquo;s Host computer system.)<br /><br /><strong>Security</strong><br />A department of a processing bank that is charged with the responsibility to protect merchants from fraud and make certain merchants are processing as to the terms of the signed merchant agreement. <br /><br /><strong>SET (Secure Electronic Transaction)</strong><br />A standardized global security protocol, being developed by the credit card companies and several major banks for online credit card purchases, that combines 1,024-bit encryption with digital certificates.<br /><br /><strong>Settlement</strong><br />The reporting of settlement amounts owed by one member to another, or to a card issuing concern, as a result of clearing. This is the actual buying and selling of transactions between the merchants, processors, and acquirers; along with the card issuing entities. <br /><strong><br />Settlement Bank</strong><br />A bank, including a correspondent or intermediary bank, that is both located in the country where a member&#39;s settlement currency is the local currency, and authorized to execute settlement of interchange on behalf of the member or the member&#39;s bank. <br /><br /><strong>Setup Fees</strong><br />The initial costs that are incurred by a merchant in the process of establishing a merchant account with an acquiring bank or other merchant services provider, including application fees, software licensing fees and equipment purchases.<br /><strong><br />Shopping Cart Software </strong><br />-These applications typically provide a means of capturing a client&rsquo;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.<br /><br />-Any given shopping cart can work with any given Secure Gateway Provider, the only requirement being that some computer code be written or provided to communicate with the Secure Gateway of choice, and that this code be integrated into the Shopping Cart Application.<br /><strong><br />Shopping Cart Software Providers</strong><br />Shopping Cart Software Providers are software companies that either produce, utilize or resell Shopping Cart Applications (programs) that display merchandise and/or services, and take orders for merchants.<br /><strong><br />SIC Code</strong><br />Standard Industry Classification Code. A system used to categorize businesses by industry group. This system is being replaced by the NAICS Coding system.<br /><br /><strong>Signature Capture</strong><br />Standard Industry Classification Code. A system used to categorize businesses by industry group. This system is being replaced by the NAICS Coding system.<br /><br />Electronic capturing of the cardholder&#39;s signature is becoming a powerful tool for charge back defense. At the point of sale, the customer is asked to sign the invoice, folio, or charge slip over a special digital device that turns the signature into a manageable set of digital events so that a program can reproduce the signature faithfully. A capture of the swipe and an electronic signature at the point of sale virtually assures that the customer and card were physically there and an authorization was obtained for the purchase of goods and/or services. A database maintains the signature in an encrypted form to be reproduced when requested for retrieval requests.<br /><strong><br />Smart card</strong><br />A plastic card containing a computer chip with memory and CPU capabilities. Such a card may be used for identification, to store information or financial amounts, or other forms of data. Also called an integrated circuit card or a chip card. <br /><br /><strong>Software</strong><br />A POS Terminal Application or PC or Internet Application that runs transactions and associated administration.<br /><br /><strong>Split Dial </strong><br />A separate terminal key can be used to dial out to another service such as a check guarantee company. <br /><br /><strong>Sponsoring Bank</strong><br />A Sponsoring Bank is a Chartered Bank or S &amp; L that has obtained membership in Visa or Master Card in order to allow a Processor access to the Visa and Master Card networks ( in order to process these types of transactions).<br /><br />-Since only a Bank may join Visa or Master Card, many Processors make deals with a Sponsoring Bank in order to gain access to the Visa and Master Card networks.<br /><br />-Because these Sponsoring agreements are usually like a partnership, the line between the Sponsoring Banks and their Processors is not always clear; sometimes the partnership is referred to by the name of the bank, while other times they are referred to by the name of the Processor.<br /><strong><br />SSL</strong><br />Acronym for Secure Sockets Layer. An encryption standard devised by Netscape Communications for secure communication over the World Wide Web<br /><strong><br />Standard Floor Limit</strong><br />A floor limit that varies by merchant type. This refers to a dollar limit on transactions above which authorization requests are required. <br /><strong><br />Statement</strong><br />A written record prepared by a financial institution, usually once a month, listing all transactions for an account, including deposits, withdrawals, checks, electronic transfers, fees and other charges, and interest credited or earned. The statement is usually mailed to the customer.<br /><br /><strong>Statement Fee</strong><br />The monthly charge for developing and mailing a credit card transaction statement showing merchant activity for the month. <br /><br /><strong>Stored-Value Card</strong><br />A stored-value card is a credit-card-sized device, implanted with a computer chip, with stored money value. A reloadable stored-value card can be reused by transferring value to it from an automated teller machine or other device. A disposable card cannot be reloaded. <br /><strong><br />Surcharge </strong><br />Added to a retail rate when a card is keyed rather than swiped. Also can be an added charge by a merchant for accepting a debit card at POS. <br /><br /><strong>Swiped</strong><br />Trade term for card present at retail so it can be &ldquo;swiped&rdquo; and the magnetic stripe is read in the terminal. <br /><br /><strong>Swipe Discount Rate</strong><br />The lower discount rate that is charged by an acquiring bank or merchant services provider for any transactions that occur during which both the credit card and the cardholder&#39;s signature are available for visual inspection by the merchant.<br /><br /><strong>T&amp;E</strong><br />An abbreviation for Travel and Entertainment. <br /><strong><br />T &amp; E cards</strong><br />Credit or charge card used by businesses for travel and entertainment expenses. Examples of these cards are American Express, Diners Club, Carte Blanche and JCB. Also see Corporate Cards.<br /><br /><strong>T&amp;E Merchant</strong><br />An airline, car rental company, or hotel whose primary function is to provide travel-related services. A travel agency (excluding one that is primarily engaged in the sale of transportation or travel-related arrangement services by mail/phone order) is a T&amp;E merchant to the extent that it acts as the agent of an airline, car rental company, or hotel. <br /><br /><strong>TCP/IP</strong><br />Acronym for Transport Control Protocol/Internet Protocol. A standard format for transmitting data from one computer to another. TCP deals with the construction of the data. IP routes the data from one computer to another. <br /><strong><br />Terminal</strong><br />Equipment used to capture, transmit and store credit card transactions.<br /><strong><br />Terminal Capture</strong><br />Transactions are held in the memory of the terminal or other POS device for transmitting closed batch at the end of the day or shift. Transactions can be held at the host for the purpose of editing tips or updating data such as check in and check out for the lodging application. (Different from Host Capture above).<br /><br /><strong>Terminal ID </strong><br />In the payment card industry, a number provided to a merchant by a credit card processor when that merchant retains the services of that credit card processor to uniquely identify a terminal. Also sometimes called the terminal number. A credit card processor may assign several terminal IDs to a given merchant&#39;s terminals although that merchant has a single merchant ID with that processor.<br /><strong><br />Terminal Identification Number (TID)</strong><br />Acronym for Terminal Identification Number, which identifies which POS unit, is sending data to the processor. If more than one device is used with the same MID, different TID&rsquo;s are needed to separate data. <br /><br /><strong>Terminal Software</strong><br />Programming that determines the characteristics and features of the terminal.<br /><strong><br />Thermal Printer </strong><br />Newer manufactured terminals have built-in printers with either 2-piece NCR paper or 1-piece thermal paper for receipts. Thermal units are smooth, quiet and faster. A receipt comes out for signature followed in a few seconds by the customer copy. The paper is archival to last 7 + years. <br /><strong><br />Third-Party Processor</strong><br />A Third Party Processor is an independent processor that is contracted with by a Bank or Processor to<br />conduct some part of the transaction processing process.<br /><br />-Some of these Third Party Processors specialize in running and hosting networks of Point Of Sale (POS) terminals connected to their Host via dial out modem; they produce the software in the POS terminals as well as in their host, and route authorization requests to Visa or Master Card as needed (MAPP, MDI, FDR, for example).<br /><br />-Other Third Party Processors specialize in the Settlement of credit card transactions with Visa and<br />Master Card so that merchants can be paid (FDR for example).<br /><br />-In the world of Internet Credit Card Processing, the Secure Payment Gateway Provider is another typeof Third Party Processor.<br /><br /><strong>Third Party Secure Payment Gateway</strong><br />In this model, the Third Party Secure Payment Gateway&#39;s server-computers have to provide a connection between the merchant&#39;s web site and the Visa/MC (or Check) Merchant Processor. This is done via telephone (or leased land line). The Merchant Processor will receive the transaction through it&#39;s non-internet modem bank, and then send the transaction through it&#39;s direct connection to the Card Network (like Visa) for approval., The Merchant Processor returns a response via land line to the Secure Payment Gateway, which encrypts the message and transmits it over the web back to the originating secure web site host. The Third Party Secure Payment Gateway is a different company than the Merchant Processor, and has it&#39;s own fees that are separate from any Merchant Processing fees. Examples of these are Cybercash and Authorize.net.<br /><br />Rather than try and create their own Secure Web System, many Banks and Bank/Processor alliances will use a Secure Payment Gateway Provider to perform this task for them.<br /><strong><br />Ticket Size</strong><br />The actual monetary value of the goods or services purchased in a single credit card transaction.<br /><strong><br />Tip Program</strong><br />An application, which allows a service gratuity to be added to the receipt. Used in restaurants and salons or anywhere a tip is routinely added by customers. <br /><strong><br />TMF </strong><br />Acronym for Terminated Merchant File. A shared file of merchant names that have been terminated from processing rights by a processor for serious violations of rules or fraudulent activity. Processing banks have access to this networked list. <br /><br /><strong>Track I/II </strong><br />Credit card magnetic stripe holds both the card number (Track I) and cardholder name (Track II). When a credit card is swiped through the POS terminal, the magnetic strip can read Track I/II data depending on type of terminal. <br /><br /><strong>Transaction</strong><br />(1) any agreement between two or more parties that establishes a legal obligation. (2) the act of carrying out such an obligation. (3) all activities that effect a deposit account that are performed at the request of the account holder. (4) All events that cause some change in the assets, liabilities or net worth of a business. (5) Action between a cardholder and a merchant or a cardholder and a member that results in activity on the cardholder account. Also called an &ldquo;authorization&rdquo;, in any credit card sale, keyed or swiped. <br /><strong><br />Transaction Fee</strong><br />The pre-determined and customary charge that is incurred for each individual credit card transaction a merchant processes, and collected by the merchant account provider or the ISO.<br /><strong><br />Transaction Identifier</strong><br />A unique 15 character value that VISA assigns to each transaction and returns to the Acquirer in the authorization response. VISA uses this value to maintain an audit trail throughout the life cycle of the transaction and all related transactions, such as reversals, adjustments, confirmations, and chargebacks.<br /><strong> <br />Transaction Processor</strong><br />An entity that validates and authorizes credit card purchases. They may also service the actual accounts on behalf of the issuers, emboss cards, and mail cards to cardholders. <br /><strong><br />Transaction Type</strong><br />A specific type of financial detail transaction activity that can be submitted to the clearing system. <br /><strong><br />Travel Card</strong><br />Travel Card(s) are one type of corporate/commercial card. They are typically issued to individuals who have to travel and incur travel-related expenses on behalf of their organization. A travel card program may be configured in many different ways by the card-holding organization and its issuer to meet a variety of business needs.<br /><strong><br />Triple DES (DES3 OR 3DES)</strong><br />A data encryption algorithm based on DES in which information is processed through the DES algorithm three times.<br /><br /><strong>Truncation </strong><br />The cardholder&rsquo;s credit card number is partially deleted on the receipt for protection against fraud such as a stolen credit card number or if the receipt and manipulated by a thief. <br /><br /><strong>UN/SPSC Code</strong><br />Universal Standard Product and Service Classification Code. A Global commodity standard - 10 digit, hierarchical code used to consistently classify products and services<br /><strong><br />Unbundled Fees</strong><br />Other fees paid by the merchant to the merchant bank or other contracted party for transaction processing. <br /><strong><br />Uniform Commercial Code (UCC)</strong><br />A set of business-related laws dealing with the sale of goods, their transportation and delivery, financing, storage, payments, and various other commercial transactions. These model laws have been adopted, with minor modifications, by most states to provide some consistency among states&#39; commercial laws. They were drafted by the National Conference of Commissioners on Uniform State Laws. <br /><br /><strong>Uniform Commercial Code Article 4a (UCC 4A)</strong><br />Uniform Commercial Code (UCC) is a comprehensive body of state law governing commercial transactions. Article 4A covers certain funds transfers, including ACH credit transactions not subject to the Electronic Funds Transfer Act<br /><br /><strong>User Authentication</strong><br />Process of validating that a user is who they represent themselves to be.<br /><br /><strong>User ID</strong><br />The identity of the person authorized to log on to the system.<br /><strong><br />Validation Code</strong><br />A unique 4 character value that VISA includes as part of the CPS/ATM program in each authorization response to ensure that key authorization fields are preserved in the clearing or settlement record. <br /><br /><strong>VAR </strong><br />Acronym for Value Added Reseller. Third-party vendor that enhances or modifies existing hardware or software, adding value to the services provided by the processor or acquirer.<br /><br /><strong>Visa</strong><br />Visa International Service Association and all of its subsidiaries and affiliates. <br /> <br /><strong>Visa Acquirer</strong><br />A member that signs a Visa merchant or disburses currency to a Visa cardholder in a cash disbursement, and directly or indirectly enters the resulting transaction receipt into interchange. <br /><br /><strong>Visa Card</strong><br />A card that bears the Visa symbol, enabling a Visa cardholder to obtain goods, services, or cash from a Visa merchant or an acquirer. <br /><br /><strong>Visa Commerce</strong><br />Visa Commerce is a newly released offering by Visa to support corporate card programs by allowing the buyer and seller to establish the trading rules supporting their businesses.<br /><br /><strong>Visa Issuer</strong><br />A member that issues Visa Cards. <br /><br /><strong>Visa Merchant</strong><br />A merchant that displays the Visa symbol and accepts all Visa cards. <br /><br /><strong>Visanet</strong><br />The systems and services, including the V.I.P. system and BASE II, through which Visa delivers online financial processing, authorization, clearing, and settlement services to members. <br /> <br /><strong>Voice Authorization</strong><br />An approval response obtained through interactive communication between an issuer and an acquirer, their authorizing processors, or stand-in processing, through telephone, facsimile, or telex communications. <br /> <br /><strong>Void</strong><br />A credit card transaction may be voided before transmitting the closed batch in the POS device. May occur if an entry error is made or some other change prior to completing a sale. (A &ldquo;return&rdquo; would be done after a closed batch has been transmitted which included the transaction in question) <br /><strong><br />Void Transaction</strong><br />Delete the transaction information<br /><strong><br />Void(Ed)</strong><br />Nullifies a transaction that has been recorded for settlement, but not yet settled. This removes the transaction from the batch of transactions to be settled.</font></p><p>&nbsp;</p><p><strong><font face="tahoma,arial,helvetica,sans-serif" size="2"><a href="http://www.offshoremerchantexperts.com/offshore_merchant_account_terminogies_o_to_r.html">previous</a>, <a href="http://www.offshoremerchantexperts.com/offshore_merchant_account_terminologies_a_to_c_.html">1</a>, <a href="http://www.offshoremerchantexperts.com/offshore_merchant_account_terminologies_d_to_g.html">2</a>, <a href="http://www.offshoremerchantexperts.com/offshore_merchant_account_terminologies_h_to_i.html">3</a>, <a href="http://www.offshoremerchantexperts.com/offshore_merchant_account_terminogies_k_to_n.html">4</a>, </font></strong></p>