Merchant Account Glossary
<p><font face="tahoma,arial,helvetica,sans-serif" size="2"><strong><br /></strong>Have you ever experienced bumping to people talking about the stuf that exist in your parallel universe? It's like you want to say, "Speak english,please?" Same scenario goes when people talk about business terms. Though there are a lot of online dictionaries 'bout business terms, they don't exactly focus on one specific area. Which shouldn't be the case because the world of business is as vast as the continents combined, metaphorically speaking,of course</font></p><p> <br /><font face="tahoma,arial,helvetica,sans-serif" size="2">So, here's an online glossary on <strong>offshore merchant account</strong> and other merchant accounts services, credit card processing, and payment processing services.</font></p><p><font face="tahoma,arial,helvetica,sans-serif" size="2"><strong>Access Control</strong><br />The process of ensuring that systems are only accessed by those authorized to do so, and only in a manner for which they have been authorized.<br /><br /><strong>Account Number</strong><br />A unique number assigned by a financial institution to a customer. On a credit card, this number is embossed and encoded on the plastic card.<br /><br /><strong>ACH</strong><br />Acronym for Automated Clearing House. A method of electronic payment typically used to process a group of transactions that are each for relatively small amounts. ACH transactions function like "electronic checks" that are settled (paid) within one or two business days using procedures that are similar to the way that paper checks are settled.<br /><strong><br />ACH File</strong><br />A file with instructions for the exchange and settlement of electronic payments passed between financial institutions. It represents debits and credits to be deducted from an account automatically as they occur.<br /><strong><br />Acquirer</strong><br />An Acquirer is a Visa / Master Card Affiliated Bank or Bank/Processor alliance that is in the business of processing credit card transactions for businesses and is always acquiring new merchants.<br /><strong><br />Acquiring Bank</strong><br />A financial institution that provides credit card processing accounts for merchants. Also referred to as a merchant bank or an acquirer, the bank receives funds from a cardholder when a credit card transaction is completed, and then deposits the payment amount, less any fees, into the merchant's business checking account.<br /><strong><br />Address Verification Service (AVS)</strong><br />The process of validating a cardholder's given address against the issuer's records, to determine accuracy and deter fraud. This service is provided as part of a credit card authorization for mail order/telephone order transactions. A code is returned with the authorization result that indicates the level of accuracy of the address match and helps secure the most favorable interchange rates.<br /><strong><br />Adjustment</strong><br />An adjustment is initiated by the acquirer to correct a processing error. The error could be a duplication of a transaction or the result of a cardholder dispute. The acquirer debits or credits the merchant DDA account for the dollar amount of the adjustment.<br /><strong><br />Aloha System</strong><br />A restaurant software application designed to work in a PC environment with levels of capability such as placing food orders on “touch screens”, which are transmitted into the kitchen or bar. Credit cards can be swiped and tips added. This is a 3rd party VAR solution and must be programmed by the contracted vendor. Support is provided at a cost by the vendor.<br /><strong><br />American Express</strong><br />A financial organization that issues their own charge and credit cards. American Express also performs their own transaction processing within their own processing network.<br /><strong><br />ANSI</strong><br />American National Standards Institute - The organization that issues standards in the US.<br /><strong><br />API</strong><br />Acronym for Application program interface</font></p><p><font face="tahoma,arial,helvetica,sans-serif" size="2"><strong><br />Application</strong><br />A merchant must apply for the ability to process credit cards. The merchant application describes how and what is sold. Credit and applicant information is verified and reviewed by underwriters for an approved merchant number (MID).<br /><br /><strong>Application Layer</strong><br />The layer of the ISO Reference Model which provides communication between applications.<br /><strong><br />Application Security</strong><br />The provision of security services within user applications running above the Application Layer of the ISO model.<br /><strong><br />Application Terminal</strong><br />Terminals are downloaded with various applications that are applicable to the trade style, i.e.; retail, restaurant with tips, corporate or purchase card, etc.<br /><br /><strong>Approval Response</strong><br />An authorization response received when a transaction is approved.<br /><br /><strong>ASCII</strong><br />Acronym for American Standard Code for Information Interchange. The standard system for representing letters and symbols. Each letter or symbol is assigned a unique number between 0 and 127.<br /><br /><strong>ATM</strong><br />Automated Teller Machine used for cash withdrawals from bank accounts.<br /><br /><strong>ATM Card</strong><br />For use in ATM’s. ATM cards are also issued to be used as a debit and/or credit card in POS terminals.<br /><br /><strong>Audio Response Unit (ARU)</strong><br />This is an electronic authorization and capture product where the merchant uses a touch-tone telephone to process transactions.<br /><br /><strong>Authentication </strong><br />The process of assuring that data has come from its claimed source, or of corroborating the claimed identity of a communicating party.<br /><br /><strong>Authorization</strong><br />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 is 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.<br /><strong><br />Authorization Amount </strong><br />Dollar amount approved.<br /><br /><strong>Authorization Code</strong><br /><br />A code that a credit card issuing bank returns in an electronic message to the merchant's POS equipment that indicates approval of the transaction. The code serves as proof of authorization.<br /><br /><strong>Authorization Date</strong><br />Date and Time that transaction was authorized.<br /><strong><br />Authorization Only</strong><br /><br />An Auth can be obtained via phone. (Voice auth). Allows merchants to verify that a transaction amount is within credit card balance available; however, transaction amount is not deducted from the credit card balance. An “auth only” is only good for a limited time<br /><br /><strong>Authorization Number</strong><br />Confirmation number assigned to identify an approval received on a transaction. The confirmation number prints on the credit card transaction receipt or displays on the terminal screen. If an electronic printer is not used, the authorization number is written on a paper sales draft.<br /><br /><strong>Authorization Response</strong><br />An issuing financial institution's electronic message reply to an authorization request, which may include:<br /><br />Approval -- transaction was approved<br /><br />Decline -- transaction was not approved<br /><br />Call Center -- response pending more information, merchant must call the toll-free authorization phone<br /><br />number.<br /><strong><br />Authorized Amount</strong><br />Dollar amount approved<br /><br /><strong>Authorized Transactions</strong><br />Transaction that has been approved<br /><br /><strong>Auto Close</strong><br />A terminal feature that allows an end-of-day batch closing to occur automatically at a specified time, without having to be initiated by the merchant.<br /><br /><strong>Average Sale/Ticket </strong><br />The average dollar amount of a merchant's typical sale. The average ticket amount is calculated by dividing the total sales volume by the total number of sales for the specified time period.<br /><br /><strong><br />Back End Processor </strong><br />Term describing the data processor that settles, records and forwards deposits or withdrawals to merchant. Generates monthly merchant account statement.<br /><br /><br /><strong>Bank Account</strong><br />Bank account number for the merchant to which funds will be deposited.<br /><br /><br /><strong>Bank Identification Number (Bin)</strong><br />The first six digits of a Visa or MasterCard account number. This number is used to identify the card issuing institution.<br /><br /><strong>Bankcard</strong><br />A credit card issued by a Visa or MasterCard-sponsored financial institution. (American Express,<br />Discover, Diners Club, JCB, etc., are issued directly from their respective operations, rather than through banks.)<br /><br /><strong>Batch</strong><br />The total of a day’s or shift’s transactions sent to processor when POS device is automatically or manually closed.<br /><br /><strong>Batch Close </strong><br />The process by which a merchant gathers all of the credit card transactions that have occurred over a specified period of time, usually one full day, and submits them to the financial institution acting as the acquiring bank for settlement.<br /><br /><strong>BIN</strong><br />See Bank Identification Number.<br /><br /><strong>Calcard</strong><br />Name of the California Purchasing Card program. Currently, the card issuer is USBank and the program features a Visa commercial card.<br /><br /><strong>Capture</strong><br />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.<br /><br /><strong>Card Issuer</strong><br />Any association member financial institution, bank, credit union, or company that issues, or causes to be issued, plastic cards to cardholders.<br /><br />Bank that issues a credit card to a consumer or business organization.<br /><br /><strong>Card Issuing Bank</strong><br />An EFT Network Member-Bank that runs a credit card or debit card "purchasing service" for their account holders. An example is CitiBank and the CitiBank Visa Card that they issue.<br /><br /><strong>Card Reader</strong><br />A device capable of reading the encoding on plastic cards. See Magnetic Stripe Reader.<br /><br /><strong>Cardholder</strong><br />Consumer or business organization holding rights to a credit card and its use.<br /><br /><strong>Certificate</strong><br />A digital identifier linking an entity and a trusted third party able to confirm the entity?s identity.<br /><br /><strong>Certification Authority (CA)</strong><br />A trusted entity issuing certificates confirming the identity of, or given facts associated with, the certificate's subject<br /><br /><strong>Chargeback</strong><br />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.<br /><strong><br />Chargeback Period</strong><br />The number of days from the processing date or endorsement date transaction during which the issuer may initiate a chargeback.<br /><br /><strong>Check Card</strong><br />Issued by a bank to be used as a credit, ATM, or debit card. Has a Visa or Master Card logo on front and debit network logos on the back. Can be processed as a debit card or a credit card depending on whether cardholder’s PIN is requested by merchant. (It is limited by the amount of money in cardholder’s checking account)<br /><strong><br />Check Guarantee</strong><br />An insurance service merchants use to protect against non-sufficient funds checks i.e. “bad checks”.<br /><br /><strong>Check Reader</strong><br />A device that reads check information for transmittal to a check guarantee company.<br /><br /><strong>CISP</strong><br />Acronym for Cardholder Information Security Program. An information security standard sponsored and promoted by Visa USA that applies to any organization that stores or handles their credit card account numbers.<br /><br /><strong>Close Batch</strong><br />The process of sending the batch for settlement.<br /><br /><strong>Code 10 Authorization</strong><br />If you suspect a card is fraudulent at the time of the transaction, the merchant can call their voice authorization phone number and ask for a code 10. The voice operator will instruct the merchant on how to proceed.<br /><br /><strong>Commercial Card</strong><br />Credit or charge cards issued to businesses to cover expenses such as travel and entertainment and procurement. Includes the multiple payment card brands of purchasing cards, business cards, corporate cards and multi-utility fleet cards. Visa and Master Card now have special procedures for passing billing information back to the card issuing bank so that it can be displayed on card holder statements; this is a program for promoting the use of credit cards for business purchases by providing purchase tracking to business users. New regulations require that this billing information be passed back with the transactions, otherwise a higher pass through fee will be incurred.<br /><strong><br />Cookie</strong><br />A small amount of information stored on a client computer by a Web site that is sent back to the site each time the user visits it. The use of cookies to maintain persistent, client-side state information significantly extends the capabilities of Web-based client/server applications.<br /><strong><br />Corporate Card</strong><br />A credit card issued to a business organization, which is treated differently from a consumer card. The broad definition encompasses specific types of card programs such as travel cards, fleet cards, and purchasing cards (or purchase cards, or procards) Corporate card transactions are often surcharged when certain data requirements are not transmitted during the credit card authorization process.<br /><br /><strong>Corporate Procurement Card</strong><br />Corporate procurement cards are one type of corporate card. They are typically issued to individuals that have the authority to make purchases on behalf of their organization. The cards are centrally billed to the card-holder's organization.<br /><strong><br />Corporate Purchasing Card</strong><br />Corporate Purchasing Card is another name for corporate procurement card (or procard).<br /><br /><strong>CPS</strong><br />Acronym for Custom Payment Service. Visa's regulations for the information that must be submitted with each transaction. Transactions must meet CPS criteria in order to qualify for lowest transaction processing fees available. Similar to MasterCard's Merit system.<br /></font></p><p><font face="tahoma,arial,helvetica,sans-serif" size="2"><br /><strong>Credit</strong><br />More commonly referred to as a "refund", this is a transaction initiated by the acquiring bank that transfers money out of the merchant account and back into the credit card holder's account.<br /><br /><strong>Credit Card Gateway</strong><br />Credit card, or Internet payment, B220.<br /><br /><strong>Credit Card Number</strong><br />Unique number assigned to credit card.<br /><strong><br />Credit Card Processing</strong><br />The general term for processing transactions against bankcards according to terms defined by Visa and MasterCard.</font></p><p><font face="tahoma,arial,helvetica,sans-serif" size="2"><strong><br />Credit Card Processor</strong><br />A company that performs authorization and settlement of credit card payments, usually handling several types of credit and payment cards (such as Visa, MasterCard, and American Express). If merchants wish to sell their products to cardholders, they retain the services of one or more processors who handle the credit cards that the merchant wishes to accept. When a merchant retains the services of a credit card processor, it is issued a merchant ID.<br /><br /><strong>Credit Limit</strong><br />The dollar amount assigned to a cardholder to which they are approved to borrow.<br /><br /><strong>Credit (Reversal):</strong><br />Nullification of an authorized transaction (sale) that has not been settled. If supported by the card issuer, a reversal will immediately "undo" an authorization and return it to the open-to-buy balance on a cardholder's account. Some card issuers do not support reversals.<br /></font></p><p><font face="tahoma,arial,helvetica,sans-serif" size="2"><br /><strong>CRL</strong><br />A Certificate Revocation List. A database of certificates no longer valid within a given security infrastructure.<br /><br /><strong>Cryptographic Key</strong><br />A mathematical term or other parameter used to define how a given algorithm will transform data into ciphertext.<br /><br /><strong>Cryptography</strong><br />The art or science of transforming clear, meaningful information into an enciphered, unintelligible form using an algorithm and a key.<br /></font></p><p><font face="tahoma,arial,helvetica,sans-serif" size="2"><br /><strong>CS</strong><br />Acronym for Commerce Service Provider. Supplies the system and services to establish the back-office infrastructure for businesses. Major aspects include: the processing of secure transactions, the developing and managing of customer relationships, the collecting of payment, and the delivering of products or services over the Web. A CSP may provide the following services: buyer authentication, order taking, details of what is for sale in an electronic offer, validation, payment processing (via traditional credit card payment processors), and generation of electronic receipts. Fulfillment may be made of electronic goods or physical goods.<br /><br /><strong>Currency</strong><br />Default is USD for U.S. dollars. This feature will be used when non-U.S. dollars are used in a transaction.<br /><br /><strong>Customer</strong><br />Aka “cardholder” used to distinguish from “merchant” in trade conversation. </font></p><p><font face="tahoma,arial,helvetica,sans-serif" size="2"><br /><br /><strong>Customer Code</strong><br />A 17 character alphanumeric field that is used with Purchase Card transactions. The code is typically defined by the customer (cardholder) and used for accounting or project tracking purposes.<br /><br /><strong>CVV2 </strong><br />An identification number shown on a credit card to further protect against fraud or verify the cardholder has the card in their possession. The number is 3-4 digits located on the signature panel on the reverse side of the card.<br /><br /><a href="http://www.offshoremerchantexperts.com/offshore_merchant_account_terminologies_d_to_g.html" target="_blank"><strong><br />next</strong></a><br /></font></p>
