Merchant Academy....

 

We believe in the notion that education is power. We provide this information so you can make an informed decision about the services you require for your business.

Glossary of Merchant Services Terms

 

ABA Routing Number 

Also referred to as a Transit Routing Number. Directs electronic ACH deposits to the proper bank institution.

 

ACH (Automated Clearing House)

The paperless funds transfer system maintained by the Federal Reserve or other entities that have networks to exchange electronic funds transfer items.

 

Acquirer

Any bank, financial institution, and public or private company that maintains a Seller's credit card processing relationship and receives all transactions from the Seller to be distributed to the credit card issuing banks.

 

Address Verification Service (AVS)

A service provided in which the Seller verifies the Cardholder's address with the Issuing Bank. Address verification is not a guarantee that a transaction is valid.

 

Adjustment

A debit or credit to a Cardholder or Seller account to correct a transaction error.

 

Arbitration

The process followed by the Card Associations to determine whether an Issuer or an Acquirer has ultimate responsibility for a chargeback. Either member initiates this process after the re-presentment process is completed.

 

Associations

Any entity formed to administer and promote credit cards, including but not limited to MasterCard International®, VISA®, U.S.A., or VISA International®, that are licensing and regulatory agencies for credit card activities.

 

Authorization

Approval of a bankcard transaction by the card-issuing banks or approved independent service providers, for a specified dollar amount. An authorization indicates only the availability of the card member's credit limit at the time the authorization is requested.

 

Authorization response

The reply to a request for approval on a transaction.

 

Authorization response code

A code returned in the authorization response to indicate approval of a transaction. The code is recorded on the transition receipt as proof of Authorization.

 

Back-end Processor

A data processing company that contracts with Acquirers to provide communication and processing systems that connect with the interchange systems for clearing and settlement services on behalf of those Acquirers. (In some cases the Acquirer may act as its own back-end processor.)

 

Bankcard

Any valid card issued by a Card Association or other card-issuing organization that is presented in payment for goods and services or to obtain cash advances.

 

BIN (Bank Identification Number)

The 6-digit range of numbers assigned by the Federal Bureau of Standards and used by card companies to identify their financial transactions. The Discover® range begins with '6' (6xxxxx), the MasterCard® range begins with '5' (5xxxxx), and the VISA® range begins with '4' (4xxxxx).

 

Card Association

Any entity whose members issue credit or debit cards or acquire card payment transactions on behalf of their customers.

 

Card not present transactions

Transactions that are processed without the card or the cardholder being present, e.g., phone or Internet orders.

 

Card present transactions

Transactions in which the cardholder and the card are present.

 

Cardholder

A person or entity that is issued a credit or debit account that is accessed through the use of a card.

 

Chargeback

When a credit card transaction is disputed (either at the request of the Cardholder or by a card Issuer), the dispute is handled through a chargeback. A chargeback will cause the amount of the original sale and a chargeback fee to be deducted from the checking or savings account you provided.

 

Clearing

The transfer of data between Issuers and Acquirers.

 

Control Number

Number that uniquely identifies a retrieval request or chargeback.

 

Credit/Pending Settlement

Transactions of this status have been entered as credits, but have not yet been submitted for settlement. These transactions will remain in this unsettled state until they are submitted for settlement. Once a credit has been settled, its status changes to Credited.

 

Credit Slip

A paper or electronic representation of credit that is issued to a Cardholder on a prior credit card sale.

 

CVV2 / CVC2

CVV2 / CVC2 is the three-digit value printed on the signature panel on the bank of cards immediately following the card account number. The 3-digit value helps validate that the cardholder has a card in his/her possession, and the card account is legitimate. A paper or electronic representation of credit that is issued to a Cardholder on a prior credit card sale.

 

Discount Rate

A discount rate is a fee associated with collecting, assessing, approving, processing, and settling credit card transactions. This fees is often a percentage of the transaction value.

 

Fees

Fees for screening and processing online payments may include, but are not limited to, costs for the following: – Monthly Account– Discount rate– Per item charges for credit card and electronic check transactions.

 

 

Learn more by clicking through our Merchant Academy articles here:  

 

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What is Tiered Pricing?

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Glossary of Terms Pt.2                                   PCI/DSS What is it?

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