Glossary

Be In The Know

ABA Routing Number

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ACH / Automated Clearing House

An electronic payment from one bank account to another.

Acquiring Bank

A bank that provides merchant accounts and deposits funds.

Associations / Payment Brands

Visa, Mastercard, American Express and Discover.

ATM Debit Card

A card that withdraws funds directly from a bank account.

Authorization

Validating funds available for a transaction.

Authorization Code

A six to seven digit code returned when a card is approved.

Authorization Fee

A fee charged each time a transaction is sent for approval.

Authorization Only Transaction

Reserves funds on a card for later settlement.

Authorization Response

The issuing bank’s approval, decline or call center message.

Average Ticket Size

The average dollar amount of credit card sales.

Address Verification Service / AVS

A fraud control tool for verifying billing address information.

Basis Points

One basis point equals 0.01%.

Batch Processing

Submitting a group of transactions for settlement.

Breach Security Coverage

Coverage to offset costs of a suspected or actual data breach.

Business Type

Retail, Restaurant, Hotel, MOTO or Internet.

Capture

Collecting card data for processing.

Card Not Present

Online or phone transactions where the card is not physically present.

Card Present

A face to face transaction where the card is physically used.

Chargeback

A disputed transaction initiated by the cardholder.

Credit Card

A payment card issued by a bank for credit purchases.

Credit Card Processing

The electronic settlement of card transactions.

Credit Card Processor

The entity that verifies and processes transactions.

Credit Card Reader

A magnetic stripe or chip reader used at point of sale.

Debit Card

A card that deducts funds directly from a bank account.

Discount Fee

The percentage fee charged for processing credit card payments.

EBT

Electronic Benefits Transfer for government assistance programs.

EFT

Electronic movement of funds between bank accounts.

Electronic Wallet

A digital wallet used to store payment information.

Encryption

Encoding information for secure transmission.

Interchange

A fee set by card networks and paid to issuing banks.

Issuing Bank

An electronic payment from one bank account to another.

Merchant Account

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Merchant Account Provider

The company that provides card processing services.

Merchant Processing Agreement

A contract outlining credit card processing terms.

Mobile Credit Card Processing

Accepting payments via smartphone or tablet.

Monthly Minimum

A minimum required monthly processing fee.

Monthly Processing Limit

The maximum processing amount allowed per month.

Monthly Processing Volume

Total monthly credit card sales.

MOTO

Mail order or telephone order transactions.

Over Limit Fee

A fee charged when monthly processing exceeds approved limits.

Payment Cards

Includes credit, debit, prepaid and EBT cards.

Payment Gateway

Software that routes transactions to your processor.

PCI DSS

Security standards for handling credit card data.

PCI Non Validation Fee

A fee for failing to submit proof of PCI compliance.

Personal Identification Number for debit purchases.

PIN Pad

Device used for entering debit card PIN numbers.

POS

Point of Sale where payment occurs.

POS Terminal

Device used to process card payments.

Recurring Billing

A transaction charged automatically on a schedule.

Real Time Processing

Immediate approval or decline of transactions.

Retrieval

A request for transaction details during a dispute.

SSL

Secure Socket Layer used for encrypting online data.

Terminated Merchant File

A database of merchants removed from processing networks.

Virtual Shopping Cart

Website software allowing customers to add items before checkout.

Voice Authorization

Authorization obtained by phone instead of electronically.