E-Commerce Glossary Terms

ABA Routing Number - ABA is a unique number, located at the bottom of a check preceding the account number, which directs electronic ACH deposits to the correct bank. Also referred to as a Transit Routing Number. 

Access Number - The telephone number dialed by the modem that lets a computer communicate with an on-line service or ISP (Internet Service Provider).

ACH - See Automated Clearing House 

Acquirer - A financial institution that maintains the merchant credit card processing relationship and receives all transactions from the merchant to be distributed to the Cardmember Banks.

Address Verification - A service in which the merchant verifies the cardmember's address. Primarily used by Mail/Telephone order merchants. Not a guarantee that a transaction is valid.

American Express - An organization that issues cards and acquires transactions, unlike Visa and MasterCard which are bank associations. 

Arbitration - The procedure an Acquirer may use to resolve a complaint with a Card Issuer on behalf of the establishment.

Associations - MasterCard International, Visa U.S.A., or Visa International, which are licensing regulatory agencies for bankcard activities.

Authorization - Approval by, or on behalf of, the card issuer to validate a transaction for a merchant or another affiliate bank. An authorization indicates only the availability of the cardmember's credit limit at the time the authorization is requested.

Authorization Code - A numerical (or alpha numerical) code sent by the card issuer verifying that the sale has been authorized. The authorization may be obtained by voice, software, or terminal transmission. The merchant should include the authorization number on the sales draft to substantiate the authorization. 

Automated Clearing House - An electronic method of transferring funds between banks via the federal reserve system. ACH is used by most banks physically located in the United States. The merchant's bank must utilize ACH transactions in order to deposit credit card funds to the merchant's checking account. 

Auto-representment - Chargebacks (credit not issued, transaction not authorized, etc.) that were automatically resolved on the merchants behalf without their knowledge or intervention.

Average ticket - The average dollar amount of your credit card transactions.

Balance Sheet - A financial statement that shows assets, liabilities, and net worth as of a specific date.

Batch - Usually a day's worth of transactions, including sales and credits to be processed by the card processor.

Card Issuer - Financial organizations authorized by a regulatory organization to issue credit cards to individual cardholders. Also see Cardmember Bank.

Cardmember Bank - The bank that issued a bankcard to an individual. The term is frequently used in conjunction with interchange arrangements to identify the card-issuing bank.

Chargeback - The process of taking back, or debiting, the merchant's credit card funds after the funds have been paid to the merchant. This occurs when a customer disputes a credit card transaction. The merchant must respond to the charge back and provide proof that the product or service was provided to the customer. 

Client Reference Number - An 8-digit number supplied with a credit card transaction. This number is given to the Acquirer along with a retrieval request.

Compliance - Compliance to the Visa and MasterCard regulatory bylaws.

Credit - A refund or price adjustment given for a previous purchase transaction.

Credit Draft - A document evidencing the return of merchandise by a cardmember to a merchant, or other refund made by the merchant to the cardmember.

DDA - Demand Deposit Account. The individual business bank account that is credited or debited for deposits, fees, and adjustments.

Data Encryption - The scrambling of information sent over the Internet. Only the intended users can read and understand encrypted information.

Debit Card - An ATM bankcard, also called a check card, allows a merchant to deduct money directly from a customer's bank account. Debit cards issued with a Visa or MasterCard logo are accepted by any merchant that also accepts Visa or MasterCard credit cards. 

Discount Rate - A percentage rate charged by the bank for processing a merchant's transaction. This rate is usually determined by the type of business and/or how the credit card is processed. Retail based transactions (card present) will always have a lower discount rate than mail, phone, or internet transactions (card absent). 

Exceeded Timeliness - Transaction was deposited late. The authorization date, compared to the processing date, exceeded the time frame allowed for the interchange level for which the merchant is priced.

Expiration Date - The date embossed on the credit card beyond which the card is not acceptable by the establishment at the point-of-sale.

Fraud Investigation - The process of identifying suspicious merchant and/or cardholder activity.

Imprint - An imprint of a customer's credit card can be electronic (swiping the card through a credit card terminal) or manual (taking physical impression of the credit card). Either of these two methods is required to prove the customers credit card was present. 

Issuing Bank - Cardmember's bank, or the bank which has issued a MasterCard or Visa card to an individual.

Manual Entry - Credit Card information is entered via computer keyboard or terminal keypad instead of swiping the card through a credit card reader terminal. 

MasterCard - An association of banks that governs the issuing and acquiring of MasterCard transactions. 

Media - The documentation of monetary transactions (i.e., sales drafts, credit slips, computer printouts, etc.)

Media Retrieval Requests - Media retrieval is the process of obtaining paper documents from a centralized location. You can obtain two types of media retrieval requests: 1) requests for sales record from cardholders and 2) requests for documentation in defense of the chargeback from card issuers. You must fulfill media within 12 days of receipt. If you fulfill media after 12 days of receipt, the status is fulfilled late. If you cannot fulfill the media, the status is expired.

Merchant - A business (Sole proprietor, partnership, incorporation, LLC, etc.) that agrees to accept credit cards and debit cards when properly presented by the customer. 

Merchant Account - A written, commercial bank account established by contractual agreement between your business and a bank. The agreement contains the respective rights, warranties, and duties with respect to accepting the bankcard (i.e. Visa or MasterCard). You must apply for this account much like you would apply for a commercial loan. 

Merchant Account Number - A number that numerically identifies each merchant to the merchant processor for accounting and billing purposes.

Merchant Category Code (MCC) - A code assigned by an Acquirer to identify a merchant's type or mode of business and the merchandise sold.

MID - A unique identification number assigned to a merchant by the Acquirer.

MO/TO - Refers to Mail Order / Telephone Order (card not present transactions). 

Point Of Sale (POS) - The point at which a product is purchased and delivered.

Primary Account Number (PAN) - The cardholders account number to which transactions are to be charged.

Processor - A transaction processor, distinct from the bank, that processes data from the credit card transactions and then distributes funds from the merchant's bank account. 

Protocol - A set of rules that lets computers agree how to communicate over the net

Recurring Transaction - A credit card transaction, which has been permitted by a customer, that is periodically charged to the customer's account. . (i.e. weekly, monthly, quarterly). 

Referral - The message received from an issuing bank when an attempt for authorization requires a call to the Voice Authorization Center.

Representment - A transaction presented to the issuer by the Acquirer when the establishment requests a reversal of a chargeback.

Retrieval Request - A request by a bank to a merchant for documentation concerning a transaction, usually a customer dispute or an improper sale or return. A retrieval request can lead to a chargeback. 

Reversal - A request by the establishment to represent a chargeback to the card issuer.

SIC code - The Standard Industry Classification assigned by an Acquirer to identify a merchant's business type.

Submission - The process of sending batch deposits to the Acquirer for processing.

Summary Adjustment - A correction to an establishment's deposit made by the Acquirer when there is an error in the submitted deposit.

Swiped Card - Credit card information that is electronically input by swiping the credit card through a card reader or terminal. 

TID - A unique identification number assigned to a specific point of sale device by the Acquirer.

Transaction - A credit card sale or refund between the cardholder and merchant, or the processing of the exchange by the Acquirer.

Transaction Fee - A per transaction amount charged by the bank for processing each transaction. This amount is in addition to the discount rate. For example: a discount rate of 3.00% plus 30 cents per transaction. 

Valid Date - The date embossed by the card issuer on the credit card. An establishment cannot accept a card for payment of goods or services prior to this date.

Visa - An association of banks that governs the issuing and acquiring of Visa credit card transactions. 

Voice Authorization - When a merchant calls to obtain credit card authorization rather than using a terminal or credit card software to obtain the authorization. The merchant must, in addition to the voice authorization, submit the credit card information via terminal or software to close out the transaction and transfer the funds to the merchant's bank account.

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