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Glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
ACH
See Automated Clearing House.
Acquiring Financial Institution
An acquiring financial institution (or "acquirer") contracts with the bank and merchants to enable credit card transactions. The acquirer deposits the daily credit card totals and debits the end-of-month processing fees from the merchants' accounts.
Acquirer
See Acquiring Financial Institution.
API
See Application Programming Interface.
Authorization
The process of verifying the credit card has sufficient funds (credit) available to cover the amount of the transaction. An authorization is obtained for every sale. An approval response in the form of a code sent to a merchant's POS equipment (usually a terminal) from a card issuing financial institution that verifies availability of credit or funds in the cardholder account to make the purchase. Also see Point-Of-Sale.
Automated Clearing House
A nationwide electronic funds transfer system that provides for interbank clearing of electronic payments for participating financial institutions.
AVS
See Address Verification System.
Address Verification System
A service supported by Visa, MasterCard, Discover and American Express that verifies the cardholder's billing address against the one on file with the issuer. The street address and postal code of the billing address are compared to the billing address on file for the credit card. If the address does not match then the transaction is declined. AVS is designed to help combat fraud in non face-to-face transactions.
Application Programming Interface
The interface (calling conventions) by which an application program performs operations. A programmer uses this specification to make use of software.
Auth
A charge type that holds funds on a credit card without billing the card. An auth must be followed by a capture in order to complete the transaction.
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B
Bankcard
A credit card issued by a Visa or MasterCard-sponsored financial institution. (American Express, Discover, Diners Club, JCB, etc., are issued directly from their respective operations, rather than through banks.)
Batch
The accumulation of captured credit card transactions in the merchant's terminal or POS awaiting settlement.
Browser (Web-browser)
Software for viewing Internet documents (web pages).
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C
CA
See Certificate Authority.
Capture
The submission of an electronic credit card transaction for financial settlement. Authorized credit card sales must be captured and settled in order for a merchant to receive funds for those sales. Also see Settlement.
Cardholder
Any person who holds a payment card account (bankcard or otherwise). Person that uses a credit card to purchase goods and services.
Cardholder Information Security Program (CISP)
The Visa CISP program ensures that its merchants, payment companies and acquiring banks meet high security standards for card not present transactions. The industry-wide standards require that sensitive credit card data is protected when presented to merchants through direct mail, over the telephone or online. The standards were established to help lower the risk of fraud and improve consumer confidence.
Payment Processing, Inc. has been CISP compliant since March 2003.
Card Identification Number (CID)
American Express's implementation of a credit card verification value. A four digit number on the front of an American Express card.
Card Validation Code
MasterCard's implementation of a credit card verification value.
Card Verification Value 2
Visa's implementation of a credit card verification value.
Certificate Authority (CA)
A Certificate Authority or CA, is a trusted third-party company that issues digital certificates. A digital certificate verifies that the user sending information is who they say they are and provides a means to encrypt closed two-way communication between the sender and the receiver of data.
Chargeback
A credit card transaction that is billed back to the merchant after the sale has been settled. Chargebacks are initiated by the card issuer on behalf of the cardholder. Typical cardholder disputes involve product delivery failure or product/service dissatisfaction. Cardholders are urged to try to obtain satisfaction from the merchant before disputing the bill with the credit card issuer.
CID
See Card Identification Number.
CISP
See Cardholder Information Security Program.
Credit
A charge type that debits the merchant and transfers the total to a credit card (See also independent credit and dependant credit).
CVC
See Card Validation Code.
CVV
See Credit Card Verification Value.
CVV2
See Card Verification Value 2.
Credit Card Verification Value
CVV refers to the credit card verification numbers embossed or imprinted on credit cards to reduce fraud risk in card-not-present transactions. All credit card brands use some kind of Credit Card Verification Number, though they are named differently: CVV2 for Visa, CVC2 for MasterCard and CID for American Express. In all cases, it is a 3-4 digit code that is printed on the credit card. CVV ensures that the person using the card in card-not-present transactions has physical possession of the credit card.
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D
Dependant Credit
A credit that references a previous transaction. The credit amount cannot be more than the credit card was originally billed for.
Digital Certificate
Contains the name, serial number, and expiration date of the certificate holder. The digital certificate also contains the certificate holder's public key (used for encrypting data sent over the Internet), and is digitally signed by the Certificate Authority to verify its authenticity.
Discount Rate
The percentage of sales amounts that the bankcard acquirer or T&E card issuer charges the merchant for the settlement of the transactions.
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E
E-check
A generic term for an ACH debit to a consumer account that is originated on the Internet, at the point of sale, over the telephone, or by a bill payment sent through the mail or dropped in an unattended dropbox.
Electronic Check
The term "electronic check" is used to refer to several types of electronic transactions. It is a a catch-all term used loosely to refer to any attempt to initiate payment through PCs, the Internet, and computer systems.
Types of electronic checks include:
ACH-based electronic check: A payment that begins as a paper check is converted into, or truncated to, an ACH debit entry: The paper check is not processed.
Electronic network electronic check: A payment that begins as a paper check is converted into, or truncated to, an electronic network entry, using networks such as an ATM network or a credit card network. The paper check is not processed.
Internet or telephone-initiated payments: A transaction that is initiated over the Internet or via phone, with the debit carried out by an electronic debit, usually an ACH debit.
Encryption
A method of changing data into secret code. Encrypted files can only be read if they can by decrypted into their original form by means of a key or password. Encryption is the cornerstone of data security. Data that is not encrypted is said to be in "plain text" form, readable by anyone who can view a text file.
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F
Follow-on transaction
A transaction that relies on a previous transaction to complete. Dependant credits, captures and voids are follow-on transactions.
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G
Gateway
An interface to a financial institution that allows the processing of credit card transactions.
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H
HTTP
See HyperText Transfer Protocol.
HTTPS
See Secure HyperText Transfer Protocol.
HyperText Transfer Protocol
A protocol used for the transmission of web pages and other documents and files over the World Wide Web.
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I
Independent credit
A credit that does not reference a previous transaction.
Interchange
The standardized electronic exchange of financial and non-financial data associated with sale and credit data between merchant acquirers and card issuers on various types of MasterCard and Visa transactions.
Interchange Fee
A fee paid by an acquirer to an issuer for transactions entered into interchange. The interchange fee is a percentage applied, according to Visa/MasterCard regulations, to the dollar value of each transaction. There are multiple categories of interchange, and Visa and MasterCard each have their own criteria for their own categories. A transaction must meet the specified criteria for a category in order for that category's rate to be applied. Each transaction is evaluated individually, so various interchange rates may apply within one batch of merchant transactions.
Issuer
The issuing financial institution extends credit to a cardholder through bankcard accounts. The financial institution issues a credit card and bills the cardholder for purchases against the bankcard account. Also referred to as the cardholder's financial institution.
Issuing Bank
See Issuer.
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J
JCB J/Secure
JCB's implementation of payer authentication. Similar to MasterCard SecureCode and Verified by Visa.
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K
L
M
Mail Order/Telephone Order (MO/TO)
Credit card transactions initiated via mail, email or telephone orders. Also known as card-not-present transactions.
MasterCard SecureCode
MasterCard payer authentication technology that runs on a Web-browser and verifies that a MasterCard cardholder is authorized to use the card. SecureCode qualifies the transaction for a guaranteed payment that protects against cardholder unauthorized chargebacks. PPI BuyerAuth is an optional product feature that implements MasterCard SecureCode, as well as Verified by Visa and JCB J/Secure.
Merchant Identification Number (MID)
This number is generated by a processor/acquirer and is specific to each individual merchant location. This number is used to identify the merchant during processing of daily transactions, rejects, adjustments, chargebacks, end-of-month processing fees, etc.
Merchant Support Center
Once merchants are actively processing transactions through our
Internet payment gateway, our web-based Merchant Support Center logs all
transaction activity so merchants can review transaction details, process batch
payments, run voids and captures, and perform statistical analysis.
MID
See Merchant Identification Number.
MOTO
See Mail Order/Telephone Order.
MSC
See Merchant Support Center.
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N
Non-Qualified Transaction Fees (NON-Qual)
Bankcard sales transactions that do not meet set Visa/MasterCard criteria for that particular merchant and are processed at a higher interchange rate. An example of this is a merchant that is retail (card present) that processes a card-not-present transaction (or manually enters card data rather than swiping the magnetic stripe through the terminal). The merchant will pay the difference between what they should have paid on retail and what they actually qualified for (card not present). This difference is called non-qualified interchange fees.
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O
P
PCI
see Payment Card Industry Data Security Standard.
POS
See Point-of-Sale.
Payment Card Industry Data Security Standard
The PCI Data Security Standard is a security protocol and requirement for the safeguarding of cardholder data in the payments industry. The PCI Data Security Standard consists of 12 main requirements and other sub-requirements that must be followed by merchants and service providers that store, process or transmit credit card information.
Payment Processing, Inc is PCI compliant.
Payment Gateway
Payment Gateway companies help other Processors conduct secure business on the internet using Secure Socket Layer (SSL) technology. They provide a system that passes credit card data, authorization requests, and authorization responses over the Internet using encryption technology.
The transaction information is sent by the Payment Gateway secure server via leased line to the credit card network where the validity of the card is checked and the availability of funds on that account is verified. An authorization code is returned via leased line to the Payment Gateway; the authorization is encrypted by the Payment Gateway and transmitted in encrypted form to the web server of the merchant, which triggers fulfillment of the order.
Payer Authentication
A means of verifying the identity of a cardholder that is making an online purchase. Payer Authentication products, such as PPI BuyerAuth, implement credit card vendor verification technology, such as MasterCard SecureCode, Verified by Visa, and JCB J/Secure. Merchants using payer authentication are guaranteed payment on authenticated transactions. Payer authentication reduces fraud related losses, such as chargebacks.
Payment Cartridge
A payment solution that provides integrated credit card processing to shopping carts and enterprise applications.
Payment Plug
A payment solution that provides an API for customized integration of credit card processing with merchant applications.
Point-of-Sale
A transaction that occurs in the real world at the point-of-sale. POS software, such as VirtualPay POS, allow merchants to process card present transactions at the physical point-of-sale using a Web-based virtual terminal that performs the same functions as a physical point-of-sale terminal.
Processor
A Processor is the company that actually routes an Authorization Request from a Point of Sale device (such as a Verfone credit card terminal) to Visa or Master Card, and then arranges for Fund Settlement to the merchant. Such processors are traditionally accessed via direct dial out modems connecting to their system.
Processors need to have a Sponsoring Bank in order to gain access to the Visa and Master Card networks. When a Processor or other entity has made such an arrangement with a Sponsoring Bank to resell their services, they are called an Agent of that bank.
Any entity that sells Visa or Master Card must disclose themselves as an Agent of their Sponsoring Bank. Such sales entities may be a Processor, or an ISO/Agent of the Processor or Processor/Bank alliance.
Many banks are also their own processors, while other banks will use a Third Party Processor to handle this processing for them (in their own brand name in some cases).
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Q
R
Real-Time Processing
Real-Time Processing means that when a web site's customer conducts an online purchase, that the check or credit card information is conveyed to the Processor at that exact time so that an authorization can be requested and received at that moment. Real-Time Processing always implies that a Secure Payment Gateway is being utilized, whether proprietary or third party.
Recurring Payments
Payments that occur at set intervals.
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S
Sale
A charge type that bills a customer in one step. A sale is the equivalent of an auth followed by a capture.
Secure HyperText Transfer Protocol
HTTPS is a protocol used for the transmission of sensitive documents and files over the Internet. HTTPS pages are require SSL.
Secure Sockets Layer
A protocol for transmitting sensitive documents and data securely. SSL works by encrypting data then transmitting it via a secure connection where it is decrypted by the recipient. Web pages that use SSL are hosted HTTPS (Secure Hypertext Transfer Protocol) rather than HTTP.
Settlement
The process of sending a merchant's batch to the network for processing and payment. For non-bankcards, the issuer pays the merchant directly (less applicable fees) and then bills the cardholder. For bankcards, the acquirer pays the merchant (less applicable fees) with funds from Visa/MasterCard. The bankcard issuer then bills the cardholder for the amount of the sale. Also see Capture.
Shopping Cart Software
These applications typically provide a means of capturing a client’s Credit Card information, but they rely on the Software Module of the Secure Gateway Provider, in conjunction with the Secure Payment Gateway, in order to conduct secure Credit Card transactions online.
SSL
See Secure Sockets Layer.
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T
Terminal Identification Number (TID)
A unique number assigned to each point-of-sale or virtual terminal.
TID
See Terminal Identification Number.
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U
V
VBV
See Verified by Visa.
Virtual Terminal
A Web-based credit terminal that performs the same processing functions as a physical point-of-sale terminal. A merchant logs on to a secure web page, enters credit card information into a Web form, and submits the transaction data for processing. PPI's VirtualPay and VirtualPay POS are virtual terminals.
Verified by VISA
VBV enabled credit cards have a unique password associated with them to provide additional on-line fraud protection. Visa's implementation of payer authentication similar to MasterCard SecureCode and JCB J/Secure.
Void
A charge type that cancels a previous transaction. That transaction will not appear on the buyer's credit card bill.
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W
WML
See Wireless Markup Language.
Wireless (Wireless Device)
A term used to describe handheld devices, such as PDAs (Personal Digital Assistants), and cell phones, that can connect to the Internet. See also Wireless Markup Language.
Wireless Markup Language
WML is a markup language used to transmit web pages and other Internet documents and files to wireless devices such as handheld devices (PDAs and cell phones).
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X
Y
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