Glossary Of Credit Card Processing Terms

--- Acceptor:
A business that is qualified to accept credit or debit cards as payment.

--- Acquirer:
An acquirer is an organization that underwrites the credit card transactions of the acceptor; enabling the acceptor to accept credit cards.

--- Address Verification Service (AVS):
The process of validating a cardholder's given address, which is an important measure to deter fraud.

--- Adjustment:
An adjustment is executed by the acquirer to correct a processing error.

--- Authorization:
The process of verifying that the credit card has sufficient funds available to cover the amount of expense incurred.

--- Authorization Response:
    Approval - transaction was approved
    Decline - transaction was not approved

--- Authorization Code:
Code that serves as proof of authorization.

--- Bankcard:
A credit card issued by a Visa or MasterCard-sponsored financial institution.

--- Capture:
The submission of a credit card for transaction uses.

--- Cardholder:
A person that uses a credit card to purchase goods and services.

--- Chargeback:
A credit card transaction that is returned back to the merchant after the sale has been completed.

--- Code 10 Authorization:
A method of checking a suspicious card with a phone operator.

--- Credit (Reversal):
Nullification and refund of an authorized transaction.

--- Debit Card:
A payment card that withdraws funds directly from the cardholder's checking account.

--- Discount Rate:
The percentage that the acquirer charges the merchant for the settlement of transactions.

--- Electronic Cash Register (ECR):
A device used for cash sales.

--- Internet Service Provider (ISP):
Web Site Hosting companies that run merchant’s web sites.

--- Issuing Financial Institution:
The bank or other financial institution that extends credit to a cardholder.

--- Magnetic Stripe:
A strip of magnetic tape on the back of credit cards containing identifying data.

--- Mail Order/Telephone Order (MOTO):
Credit card transactions via mail, email or telephone.

--- Point Of Sale (POS):
A location where credit card transactions take place.

--- POS Terminal:
Equipment used for credit card transactions at the point of sale.

--- 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. Please see Secure Payment Gateways and Real Versus Non-Real Time Processing.

--- Secure Payment Gateway:
Secure Payment Gateway companies help process secure business transactions over the Internet using Secure Socket Layer (SSL) technology.

--- Settlement:
The process of sending a merchant's batch to the network for processing and payment.

--- Shopping Cart Software:
A means of capturing a client’s Credit Card information over the internet.
Smart card: A credit-type card that electronically stores account information in the card itself.

--- Terminal:
Equipment used for store credit card transactions.

--- Terminal Software:
Programming that determines the unique functions and features of the terminal.

--- Terminal Identification Number (TID):
A unique number assigned to each POS terminal.

--- Third-Party Processor:
A Third Party Processor is an independent processor that is outsourced by a merchant to handle credit card transactions.