Industry Terms

  • Account Number
    A unique sequence of numbers assigned to a cardholder account that identifies the issuer and type of financial transaction card.
  • Acquirer
    Electronic Merchant Systems or another financial institution, which receives electronic financial data from a Merchant relating to a transaction and initiates that data into an interchange system.
  • Authorization
    This is a process that assesses transaction risk, confirms that a given transaction does not raise the account holder’s debt above the account’s credit limit and reserves the specified amount of credit.
  • Average Ticket
    A predetermined dollar amount that the merchant can process on a per-sale basis.
  • AVS (Address Verification Service)
    A service provided by Visa that checks to match the street number and zip code of the cardholder’s address. It provides a level of fraud protection that helps to prevent fraud and charge-backs.
  • Batch
    A collection of transactions that are processed as a group. You can batch orders for authorization or for capture. Your processing requests may in turn be batched for settlement by banks.
  • Capture
    A transaction sent after the merchant has shipped the goods. This transaction will trigger the movement of funds from the Issuer to the Acquirer and then to the merchant’s account.
  • Cardholder
    Customer associated with the primary account number requesting the transaction from the card acceptor.
  • Credit
    A claim for funds by the cardholder for the credit of his account. At the same time it provides details of funds acknowledged as payable by the acquirer (and/or the card acceptor) to the card issuer.
  • Chargeback
    A chargeback is when a customer calls their credit card company disputing a charge because the products/services were not received. If the merchant cannot prove otherwise, then the charge is refunded to the customer at the merchant’s expense.
  • Discount Rate
    The fee a merchant pays its acquiring bank/merchant bank for the privilege to deposit the value of each day’s credit purchases. The fee is usually a small percentage of the purchase value
  • Factoring
    This term refers to the practice of allowing more than one merchant to process transactions through a single merchant account. Factoring is not permitted under Visa, MasterCard and American Express regulations.
  • Interchange
    The exchange of information, transaction data and money among banks. Interchange systems are managed by Visa and MasterCard associations and are very standardized so banks and merchants worldwide can use them.
  • Interchange Fee
    A fee paid by the acquiring bank/merchant bank to the issuing bank. The fee compensates the issuer for the time after settlement with the acquiring bank/merchant bank and before it recoups the settlement value from the cardholder.
  • Internet Payment Gateway
    A payment gateway is a service that gives merchants the ability to perform real-time credit card authorizations from a web site over the Internet.
  • Issuer
    A financial institution that issues the identification payment card (e.g. Visa® Card) to the cardholder identified by the primary account number.
  • Merchant
    An Electronic Merchant Systems approved seller of goods, services, and or other information who accepts payment for these items electronically. The merchant may also provide electronic selling services and/or electronic delivery of items for sale.
  • Monthly Minimum
    Charge levied by the merchant bank instead of the monthly credit card volume multiplied by the discount rate if the merchant’s monthly credit card volume multiplied by the discount rate is less than the monthly minimum.
  • Monthly Volume
    A predetermined dollar amount that the merchant can process.
  • Retrieval Request
    A request from a cardholder’s bank for information about a charge, which is being disputed. Retrieval requests usually precede a chargeback.
  • Reversal
    A transaction from the acquirer to the card issuer informing the card issuer that the previously initiated transaction cannot be processed as instructed, i.e., is undeliverable, unprocessed or cancelled by the receiver.
  • Real-time
    The term “real-time” means to incur immediately. For credit card processing, this means that the validity of a customer’s credit card, as well as their available credit limit can be checked immediately before processing is accepted. This is extremely important for card-present and Internet transactions, in which it is difficult and costly to get back in touch with the customer.
  • Secured Sockets Layer (SSL)
    SSL is used to encrypt and protect data usually on an order from an online merchants web site. Since the intended client machine can be identified, only that machine is able to decrypt the transmission.
  • Settlement
    As the sales transaction value moves from the merchant to the acquiring bank, to the issuer, each party buys and sells the sales ticket. Settlement is what occurs when the acquiring bank and the issuer exchange data or funds during that function.
  • Shopping Cart
    On an e-commerce enabled web site, a method of collecting the items chosen by a consumer for purchase from an on-line catalog.
  • Statement Fee
    Charge levied by the merchant bank for monthly reports detailing activity on a merchant account.
  • Ticket
    Another name for the sales slip or its monetary value that results when a credit card purchase is made.
  • Transaction
    There are several types of transactions but the most common transaction is the process that takes place when a cardholder makes a purchase with a credit card.
  • Transaction Fee
    A per transaction fee that is charged by the bank for processing transactions