The process of not printing the full primary account number and expiration date on a receipt. Typically, only the last four digits of the primary account number are printed.
Acquiring Bank (Merchant Bank)
The bank that is an authorized member of Visa & MasterCard that is in the business of processing credit card transactions on behalf of businesses (merchants)
Address Verification Service (AVS)
A real-time service offered to combat fraud and validate a cardholder's given address (street number and zip code) against the card issuer's records. AVS is used in a non-face to face processing environment (mail order/telephone order). The network response helps the merchant determine the level of accuracy of the address match. AVS only works for US-issued credit cards
American Express (AMEX)
A company that both issues cards and acquires transactions through merchants. This is unlike Visa and MasterCard which are associations of financial institutions
Authorization
The process of verifying with the card issuer that an account has sufficient funds available and is in good standing. The cardholder's available credit limit is reduced by the authorized amount
Authorization Code
A numeric or alphanumeric code sent by the card issuer verifying that the sale has been authorized (approved)
Auto-Close
The process by which daily batches of transactions are automatically summarized and transmitted for end of day settlement processing at a pre-determined time
Automated Clearing House (ACH)
The Automated Clearing House is a batch-oriented electronic funds transfer system which provides for the interbank clearing of electronic payments for participating financial institutions. The Federal Reserve System acts as the ACH operator clearing transactions for financial institutions
Bank Identification Number (BIN)
The first 6-digits of the account number used by the card issuer to identify their institution. The American Express account number range begins with “3”, the Visa account number range begins with “4”, the MasterCard account number range begins with “5” and the Discover account number range begins with “6”
Bankcard
A credit card issued by a Visa or MasterCard member financial institution
Batch Processing
The action of processing transactions together at one time (in a batch) as opposed to individually (one at a time). Typically batch processing occurs in situations where a cardholder signs-up to be billed on a regular basis. This could be a monthly cable TV bill, insurance bill, or subscription service
Card Verification Value (CVV2 – CVC2 – CID- V Code)
The Card Verification Value is the three-digit security code that is printed on the signature panel on the back of a credit card. These numbers provides extra security against unauthorized use during non-face to face transactions. If merchants input the Card Verification Value as part of authorizing a MO/TO transaction, the card issuer will respond that there is a match or no match with what they have on file for this card. By using the Card Verification Value, the merchant is able to make a more informed decision about the validity of the card and the transaction
Card-Swiped Transaction
A transaction where a card is read by a magnetic stripe card reader
Cardholder
The individual to whom the card is issued or who is authorized to use an issued card
Chargeback
A transaction returned by an issuing bank to an acquiring bank. A transaction may be returned because it was non-compliant with association rules and regulations or because it was disputed by the cardholder
Commercial Card
A general name for cards issued to businesses. This includes multiple variations such as Purchasing Cards, Business Cards, Corporate Cards, Travel and Entertainment Cards and Fleet Cards. In some cases, merchants are asked to input additional data as part of the accepting these cards, such as entering the sales tax amount and/or a purchase order number
Credit (Refund)
A transaction where the merchant sends money to the cardholder's account usually because the cardholder has returned merchandise. Credit transactions appear on the cardholder's statement
Credit Card
A card that allows the cardholder to purchase goods or services from a merchant on credit
Daily Discount
The process of deducting the processing fees every day from the merchant's settlement account. Typically this is withdrawn net of the total amount of the sales for the particular day
Debit Card
A card linked to a checking account. Unlike a credit card, debit card transactions are deducted automatically from the cardholder's checking account
Declined Transaction
A transaction that was not approved by the card issuer
Discount Rate
A percentage amount charged to process a transaction
Discover
A company that both issues cards and acquires transactions through merchants. This is unlike Visa and MasterCard which are associations of financial institutions
Electronic Benefits Transfer (EBT)
The processing of federal and state welfare programs via electronic methods. Typically EBT systems replace paper-based processing
Encryption
The scrambling of sensitive information for security purposes. PIN numbers are encrypted prior to transmission to prevent unauthorized tampering
Gift Card
A plastic card with an assigned dollar value issued to a cardholder for use at accepting businesses. A gift card typically replaces a paper gift certificate
Hand-Keyed Transaction
The process of keying an account number for a transaction versus swiping a card through a magnetic strip card reader to read the primary account number
Imprint
The process of manually making a print of the embossed information from a credit or debit card. This is required in a face to face processing environment where a magnetic swipe card reader is unavailable to swipe a credit card or a receipt printer is unavailable
Interchange Fee
The predetermined amount that the merchant bank pays the issuing bank for a transaction. Visa and MasterCard set Interchange fees based on a variety of categories such as card types, industry types, and processing environment. There is one set of Interchange fees for all Visa and MasterCard acquiring and issuing financial institutions
Invoice Number (Ticket Number)
A merchant-defined alphanumeric field that prints on the customer receipt. The invoice number is also required to help qualify a hand keyed transaction for the lowest possible Interchange level
Issuing Bank
A financial institution that issues cards to consumers and businesses
Loyalty Card
A plastic card that identifies participants in a loyalty program. Loyalty programs reward cardholders as they buy more merchandise
Mail Order/Telephone Order (MO/TO)
A transaction that is not conducted face to face between the merchant and the cardholder
MasterCard
An association of financial institutions set-up to both issue cards to consumers and businesses and accept cards for payment of goods and services by businesses
Merchant
A business that is set-up to accept card-based payments
Merchant Account
The type of account used to accept card-based payments
Merchant Agreement
The agreement that governs the processing arrangement between the merchant and the acquiring bank. This typically includes the rates and fees charged the merchant as well as the terms and conditions
Merchant Identification Number (MID)
The account number given to the merchant account
Merchant Services Provider (MSP)
A company that is registered with MasterCard to represent a financial institution for the purpose providing processing services to merchants
Monthly Discount
The process of deducting the processing fees once a month from the merchant's settlement account. The monthly discount method of billing makes reconciliation very easy for the merchant compared with daily discount billing
Payment Gateway
A combination of software and hardware that provides a secure interface to the processing network
Payment Processor
A company that routes transactions from merchant locations to card issuers for authorization and settlement
Personal Identification Number (PIN)
The secret code that a cardholder inputs to identify themselves during a financial transaction
Primary Account Number (PAN)
The account number given to a cardholder's credit or debit card account. The PAN is typically both printed and embossed on the cardholder's credit or debit card
Real-Time Processing
The action of processing transactions one at a time for instant approval. Typically real-time processing occurs in situations where the merchant wants an authorization immediately such as retail and restaurant locations as well as many Internet processing environments
Receipt
A printed record of a transaction including information such as; merchant name, address, phone number, date and time, amount, approval code, cardholder name, and signature
Recurring Transaction
A periodic transaction permitted by the cardholder. For example a monthly cable TV payment, insurance payment, etc. where the cardholder has authorized the merchant to charge their account on a predetermined basis
Retrieval Request
A request by the issuing bank to a merchant for documentation concerning a transaction usually regarding a cardholder dispute or an improper sale or return
Settlement
The financial reconciliation process between merchants, processors, acquiring financial institutions and issuing financial institutions
Statement
The written record prepared by the financial institution, usually once a month, listing all transactions for an account including deposits, withdrawals, and fees
Terminal Identification Number (TID)
An identifying number assigned to a device to process transactions
Transaction Fee
A per transaction amount charged to process a transaction
Truncation
The process of not printing the full primary account number and expiration date on a receipt
Visa
An association of financial institutions set-up to both issue cards to consumers and businesses and accept cards for payment of goods and services by businesses
Voice Authorization
An authorization that is obtained from the card issuer through an interactive voice system
Void
The process of deleting a transaction, usually because of operator error. Once a transaction has been voided, the corrected transaction can be entered and processed.
for more information:
239-449-6040
Naples Merchant Services
12th Avenue South
Naples, FL 34102
239-449-6040
888-601-0801 fax
info@naplesmerchantservices.com
www.naplesmerchantservices.com
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