Glossary of Terms
The following terminology is commonly associated with Merchant Acquiring:
3D Secure | The technical standard developed by Visa and MasterCard to further secure card transactions over the internet |
Address Verification System (AVS) | An automated system that allows merchants who accept card not present (CNP) transactions to verify the billing address of cardholders |
APACS | Association for Payment Clearing Services - an association of major banks and building societies set up to manage the development of payment clearing services in the United Kingdom |
ATV | Average transactional value |
Authorisation | A procedure whereby traders contact card companies to seek authority to accept transactions over a specified limit |
Authorisation Code | A code which is generated by a card issuer or acquirer when an authorisation request is approved |
BACS | Bankers Automated Clearing Services - bulk electronic clearing service |
Bank or Base Identification Number (BIN) | The magnetic strip on a card will also contact the valid BIN in the first 4/6 digits , for a merchants terminal to accept such a card |
Banking Window | This is specific to merchants with on-line terminals whereas a merchant has a set time allocated that they are expected to perform end of day reconciliation of transactions. Failure to complete reconciliation in the allotted time means transactions are delayed and not credited to accounts until the following day |
Batch | A batch is a collection of transactions held at a single terminal or outlet. A batch may contain any number of shifts or days data |
Card Authentication Method (CAM) | The means by which a plastic card is determined genuine and not counterfeit. An example of one such feature is the hologram. |
Card Issuer | A financial institution which provides payment cards to its customers |
Card Issuing | The service provided by a card issuer |
Card Not Present (CNP) | A transaction where the merchant does not have physical access to the payment card, an example of this type of transaction is via the internet |
Card Security Code (CSC) | The last 3 or 4 digits of a number printed on or just below the signature panel on the back of payment cards. |
Chargeback | Transactions returned by an issuer to the acquirer because they have been disputed by the cardholder |
Chip and PIN Card | A payment card containing a chip that requires the use of a PIN as preferred method of cardholder verification at the point of sale. This is usually a 4 digit number |
Clearing | Transmissions of instructions and settlement of payments between accounts held at different banks |
Deferred Settlement | Generally the transfer of funds following a transaction takes place within 3~4 days. This settlement period can be deferred by the merchant accepting a longer period up to 28 days. |
EFT | Electronic Funds Transmission - the transfer of funds other than by paper means which is initiated through an electronic terminal or computer so as to instruct or authorise a financial institution to debit or credit an account |
Electronic Commerce (e-commerce) | Transactions that are conducted over an electronic network where the buyer and merchant are not at the same physical location. |
Electronic Point of Sale - EPOS | A terminal or similar device that maybe used at the point of sale |
Electronic Purse (e-purse) | A store value payment card used to pay for goods and services as an alternative to cash. The card can be disposable or re-loadable. |
Floor Limit | A limit on the value of each transaction, agreed between the merchant and the acquiring bank, above which authorisation must be obtained by the merchant from the card issuer |
Forced Authorisation | When an operator "forces" a POS terminal to obtain authorisation either on line or by voice contact |
Interchange Fee | A fee paid by the merchant acquirer to the cardholders bank for each card transaction. These fees are set via the card schemes |
Issuer Processing | The processing of transactions to a cardholder account on behalf of a card issuer |
JCB | Japan credit Bureau - an issuer of the JCB card, the leading Japanese travel and entertainment card. |
Level 1 supplier | Supplier that is non VAT enabled |
Level 2 supplier | Supplier that provides summary VAT information |
Level 3 Supplier | Supplier that provides line item detail with individual VAT amounts |
LID | Line item detail data that is attached to a card transaction to qualify for VAT certification in place of an invoice. |
Magnetic Strip | The stripe that currently appears on the back of all payment cards. It contains essential customer and account information. |
MSC | Merchant Service Charge - the charge on a transaction made with a payment card and paid by the merchant to the merchant acquirer |
MasterCard | An international card scheme |
MasterCard SercureCode | The MasterCard brand name for their service that uses the 3D Secure standard |
Merchant | Merchants are traders, suppliers or retailers that can accept card payments |
Merchant Acquirer | A financial institution which has an agreement with individual traders (merchants) to reimburse them for payment made by payment cards. Sometimes known as an "acquirer" |
Merchant Acquiring | The service provided by a merchant acquirer |
MID | Merchant Identification Number |
MOTO | An acronym for mail order/telephone order that refers to card not present (CNP) transactions |
PAN | Primary account number - the number embossed on payment card and encoded onto the magnetic stripe |
Payment Card | Generic term for any plastic card (credit/debit/store etc.) which may be used on its own to pay for goods and services |
Payment or card Schemes | Payment schemes exist as a way of bringing together card holders, merchants and banks on a common trading platform for the widespread acceptability of cards and other functions such as clearing and authorisation. Visa and MasterCard are the leading examples of a payment scheme. |
PIN | Personal Identification Number - a confidential number encoded on to the magnetic strip of a plastic card and used to identify the card holder at a terminal |
Point of Sale (POS) | A physical location such as a check out till in a retailer where a customer makes a purchase |
Polling | The collection of data stored in a terminal by a central computer or polling service |
Pre-authorisation | Pre-authorisations are used primarily in situations where the cardholder/merchant wishes to obtain advance approval or verification that sufficient funds are available to make the subsequent purchasing using a payment card. |
POS Terminal | An electronic device used to process card payments at point of sale |
PSP | Payment Service Provider - carries out internet transactions for the merchant |
Reconciliation | The method by which a merchant compares the business undertaken at his electronic data capture terminal with that recorded by the acquirer and credited to his bank account |
Settlement | A transfer of funds to completed one or more transactions - normally within 3~4 days |
Swipe | A card is swiped when it is passed through an electronic point of sale terminal and the magnetic stripe is read |
Terminal Identification Number (TID) | A unique identification given to a terminal |
Third Party Processor | A firm which provides services to a card issuer or merchant acquirer as separate businesses. |
Validation | The process within a merchant terminal which checks whether or not the card being used is valid |
Verified by Visa | The Visa brand name for their service that uses the 3D Secure standard |
VGIS | Visa Global Invoice Specification |
Visa | An international card scheme |
Voice Authorisation | Authorisation of a transaction whereby the merchant will call via telephone the acquirers card centre direct |
