Glossary

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  • 3D Secure

    An XML-based protocol developed as an added layer of security for online debit card and credit card transactions, 3D Secure was developed by Visa and has been adopted by MasterCard, American Express and others. While it is aimed at improving online authentication by adding an authentication step, academic analysis has shown that there are security problems, including the shift of liability in cases of fraud and a large surface area for phishing.

  • ACCEL/Exchange

    Connecting more than 245,000 ATMs across the United States and 2,300 in Canada, The Exchange interbank network was founded in 1974 in the Pacific Northwest and was the first 24-hour ATM network. ACCEL was founded separately in 1985 and the two networks merged in 1991. Because of mergers and acquisitions, Key Bank is the only bank in the Pacific Northwest that is still part of this network.

  • Account Number

    Simply a series of numbers that identifies the financial transaction card or account type and the account holder specifically, an account number contains information that can verify its accuracy. In the case of credit cards, there is a series of digits as part of the number that indicate the type of card involved.

  • ACH

    The Automated Clearing House is a mechanism available through the Federal Reserve that allows banks to provide money to or take money from merchants or others automatically. This regional organization also allows banks to transfer money between themselves electronically. Like a check, an ACH transaction can bounce and can take time to clear.

  • ACH Return

    When an ACH transactions does not complete correctly, an ACH return with an associated return code results. These codes explain why the transaction did not complete and can help determine whether representment is allowed or practical. Merchants may pass along costs associated with an ACH return to the customer or absorb the charge.

  • Acquirer/Acquiring Bank

    An acquiring bank is the provider of credit card merchant accounts and has a relationship with Visa, MasterCard and other card companies and the merchant’s own bank. Sometimes called a clearing bank, the acquirer handles funds from the time they are charged to the cardholder until they arrive at the merchant’s bank.

  • Alaska Option

    With the aim of providing competitively priced quality electronic transaction services to its financial institutions, Alaska Option establishes gateway connections with Visa, MasterCard and more and provides other services. It is owned by four Alaska banks and has more than 120 other financial institutions involved. Through relationships, Alaska Option cards are accepted at more than million merchants.

  • Alliance One

    An ATM network and provider of other financial services, Alliance One focuses on giving people access to their money when traveling. The network provides access to more than 4,900 ATMs, and customers can access their accounts through the network without being charged a foreign ATM surcharge. ATMs are available across the U.S., including D.C. and Puerto Rico.

  • Amex (American Express)

    An American financial services company with operations in many countries, American Express is based in New York City and was founded in 1850. As one of the 30 companies that make up the Dow Jones Industrial Average, AmEx is known mostly for its credit card and traveler’s check business. About a quarter of the total U.S. dollar value of credit card transactions take place on AmEx cards.

  • Authorization

    The process of checking the availability of funds to complete a credit card sale, an authorization is expected to result in a positive response and the generation of a six or seven digit authorization code as well as the setting aside of those funds and the reducing of the available credit of the cardholder by that amount. A negative authorization or decline can result when funds are unavailable, a card is over its limit or for other reasons.

  • Authorization Currency

    The authorization currency is the native currency of a transaction and is directly related to the currency in use at the location where the transaction takes place. Conversion between currencies may take place later to properly fulfill the requirements of the transaction. The date of the transaction is important in determining the exchange rate.

  • Authorize.net

    When Visa acquired Authorize.net’s parent company CyberSource in 2010, Visa became the sixth owner of this ecommerce pioneer that was founded in Utah in 1996, three years before Google launched and contemporary with Yahoo! And Amazon. More than 400,000 merchants use this largest of the payment gateway providers.

  • AVS (Address Verification System)

    Required for use on all keyed-in or card-not-present transactions, AVS requests the street address, ZIP code and time of the transaction as well as the card number, expiration date and the amount of the transaction. The ZIP code is used to verify the validity of the billing address as a fraud control measure.

  • Bank Routing Number

    A special unique code for a particular bank or, in some cases, a specific bank branch, a bank routing code is a nine-digit number. It is the first nine digits that appear at the bottom of a check along with the account number and the check number. This routing number is used for ACH transactions.

  • Batch

    A batch is a collection of a whole day’s worth of transactions or, in some cases, a collection of transactions from a segment of the day that are accumulated together and sent for processing as a unit. Batch processing is the process of sending them in together rather than sending each transaction individually.

  • BIC (Bank Identifier Code)

    This collection of 8 to 11 numbers and letters identifies a specific bank or bank branch. It involves a four-character code for the bank, a two-character code for the country and a two-character location code as well as a three-character branch code in some cases. This code is used for communication between banks.

  • BIN (Bank Identification Number)

    The first six numbers in a MasterCard or Visa account number, this code identifies which bank issued the card. This identification is useful in transaction processing and in fraud control and can be used by the member’s affiliates when necessary for transaction processing.

  • BridgePay

    Providing connectivity to more than 30 processors, 6 ACH providers and 5 gift card companies, the BridgePay gateway is available for both card-present and card-not-present transactions. In the form of a suite of web-based solutions, it includes tools for tokenization, encryption and more. It is a vendor-neutral and processor-neutral gateway and provides needs-based solutions rather than one-size-fits-all products.

  • Business Day

    Loosely defined as the time when a banking institution is open, it is more precisely used to specify a day during which a Federal Reserve Bank and member banks can complete transactions. During a business day, items can be sent for presentment. Federal and state holidays are also bank holidays are not business days.

  • Capture

    This term is simply the industry’s word for the collection of information from a point-of-sale device. This can happen when the card is swiped or when information is manually entered. It is nothing more than the collection of information by whatever means are appropriate.

  • Card Account Updater

    Important for maintaining accuracy of stored cardholder data, the card account updater is an automatic service provided by MasterCard and Visa that allows merchants who use a card-not-present system to verify filed account information, particularly account numbers and expiration dates. The goal is to prevent service disruptions related to account changes.

  • Card Verification Code

    Used to validate that a card number is real and has been inputted correctly, the card verification code or CVC is a unique value that is calculated from the data encoded on the magnetic strip of some kinds of credit cards, including a MasterCard credit card. The code helps prevents fraud and errors in transactions.

  • Chargeback

    The result of a cardholder’s dispute of a transaction with a card issuer, this is the initiation of a retrieval request from the merchant account that results in the withdrawal of the amount from the account until the chargeback is settled. Merchants have 10 days to provide proof of delivery or otherwise dispute the chargeback.

  • Chase Paymentech Solutions

    Founded in 1985 by Mbank as MNET, Chase Paymentech is the processing and acquiring arm of JPMorgan Chase and supports businesses of many different sizes. It is ranked by most sources as the number one payment processor and has been consistently since 2006. It handles transactions in over 130 nations and provides other services that include analytics, fraud detection and data security.

  • China UnionPay

    Known as CUP, China UnionPay was founded in 2002 and operates with the approval of the People’s Bank of China. This association of the Chinese banking industry links the ATMs of 14 major banks and many smaller ones and is also a funds transfer network. It is the only interbank network in China except in Hong King and Macau.

  • Chip-Based Transaction

    Believed to provide increased transaction security, a chip-based transaction is one that is initiated by a chip embedded in a card rather than with a magnetic strip on the card. Processing time is similar, but authentication is provided automatically and does not rely on inspection of a signature, the visibility of an identifying hologram or other aspects of a manual inspection. Use of a PIN is also required in many cases.

  • Cirrus

    Operated by MasterCard Worldwide, Cirrus is an international interbank network founded in 1982 that links credit, debit and prepaid cards from MasterCard, Maestro and Diners Club to more than a million ATMs across the globe. The logo of this widely accepted network appears on many ATMs and cards in many nations, including most in the U.S.

  • Clearinghouse

    Clearinghouse
    Generally defined as an organization or agency that collects and distributes information, in the payment processing arena a clearinghouse refers to an establishment that allows for the exchange of bills, checks and other transactions between member banks, making exchange of cash unnecessary. Most non-cash payments go through a clearinghouse to be completed.

  • Contact Transaction

    Completed using a card in most cases, a contact transaction is one in which the card is either presented to a person who runs it through a machine or is swiped at a terminal where the card must physically come in contact with the area of the machine that reads the information.

  • Contactless Transaction

    Done through the use of infrared technology or radio frequency, a contactless transaction is one that does not involve touching a card or any other payment method. This is popularly used in mass transit, for road tolls and for tap-and-go applications when quick transactions are necessary or desirable.

  • Credit Card

    A plastic card that allows for purchases when cash is not present, a credit card allows access to a revolving credit limit that can be activated to pay for services or good or to get cash advances, among other things. The cardholder receives a bill later from the issuer and is subject to that issuer’s repayment terms and conditions.

  • Credit Union 24

    Created in 1981 as a way for some Central Florida credit unions to compete with other financial institutions, CU24 is now based in Tallahassee, Florida and involves more than 450 credit unions and provides POS and ATM access across the country and overseas. The organization’s goal is to make it easier for credit unions to serve a wide and diverse customer base. It was incorporated in 1998 and is a participant-owned and full-service cooperative.

  • Currency Conversion

    Regarded as the value of one nation’s currency in comparison with another, currency conversion is necessary for processing international credit card transactions and other related transaction. The exchange rate varies from one day to another and can change between the time of a transaction and when it is processed.

  • Debit Card

    A plastic card that can be used to purchase services or goods or to get cash from a deposit account. While these work and behave like credit cards, funds are taken immediately from the cardholder’s account rather than billed later, meaning there is no balance to pay at the end of a month since funding occurs immediately. Transactions may require the use of a PIN or signature.

  • Deposit Account

    Any sort of account where a customer makes deposits and withdrawals is classified as a deposit account, including checking accounts, savings accounts, share drafts and others as defined by law. Deposit accounts are maintained by a banking institution so that members can process transactions easily and conveniently.

  • Direct Payment

    A form of electronic payment that allows consumers to pay bills directly from their bank accounts over the Internet, direct payment involves a money transfer from a user’s bank account through the use of the account number and routing number. Used for ongoing bills, direct payments allow for monthly payments and are different from single-transaction online bill payments.

  • Discount Rate

    The amount a merchant is charged for its credit card transaction processing involving MasterCard or Visa, this is sometimes called the discount fee and can apply to gross or net sales. The amount charged by the processor is for processing services as well as interchange and assessments paid to the credit card associations or issuing banks.

  • Discover

    An American financial services network that operates the Discover and Pulse networks, Discover Financial Services is the third-largest credit card brand in the U.S. with nearly 50 million cardholders. Found by Sears in 1985 and formerly a part of Dean Witter, it is now independent and headquartered in Chicago. In 2008, Discover acquired Diner’s Club.

  • Dunning Management

    Part of a recurring billing solution’s ability to manage credit card payment declines, dunning management services may involve notifying a customer of a failed charge and possibly retrying the charge a predetermined number of days later. This process is essential for acquiring funding from transactions that are going bad.

  • E-pay (Electronic Bill Payment)

    An alternative to using paper checks, e-pay allows consumers to have funds withdrawn for bills and other transactions by initiating an individual transaction via computer, telephone, smart phone or ATM. Instructions relating to the transaction are sent to the bank electronically or in some cases forwarded to the bank via paper check created by the bill payment provider.

  • EFS (Electronic Financial Services)

    An overarching term rather than one with a very specific meaning, EFS refers to an array of payment issues and circumstances that are handled electronically. This can involve technology infrastructure, wireless carriers, retailers, payment service providers, credit card and debit card companies, software application developers and many other organizations and individuals working together.

  • EFT (Electronic Funds Transfer)

    Rather than moving funds using traditional paper payment methods, EFT transfers funds from one account to another electronically. There is no paper involved in an EFT transaction which can originate from a telephone, an electronic terminal, a file on a magnetic tape or an individual computer. Most money is moved electronically in today’s world.

  • Elavon

    Formerly NOVA, Elavon is a subsidiary of Bancorp and a credit card transaction processor. It provides its services in over 30 nations and supports more than a million merchant locations. It is the 4th largest of the U.S. credit card processors and among the top 6 in Europe. The company has been in the field since 1963 and was founded in Atlanta.

  • Electronic Wallet/eWallet

    The process of charging goods or services to an account without actually presenting the card but using a mobile devoice instead, electronic wallet software on a customer’s mobile device works in conjunction with software installed on the merchant’s point-of-sale terminal. All information necessary for completing the transaction is contained in the customer’s electronic wallet.

  • EMV

    EMV
    Intended to reduce point-of-sale fraud in Europe, EMV stands for EuroPay MasterCard Visa and involves microchip technology that supplements or takes the place of the magnetic strip on credit and debit cards. Some banks are issuing payment cards with embedded chips. This technology also allows for contactless payment in addition to fraud protection.

  • EMV Certification Process

    Software is deemed to have passed the EMV certification process when it has passed EMVCo tests and is then certified by the payment brands to comply with their proprietary implementations. These testing processes ensure interoperability as well as compliance with the set out standards. The goal is secure transactions no matter where they happen in the world.

  • FD Global Gateway

    Formerly called YourPay and Linkpoint, FD Global Pay is a gateway from FirstData designed to allow businesses to easily and efficiently accept online payments. Virtual Terminal, Web Service API and Connect products are available to meet the needs of most business types. FirstData also runs the STAR network that provides PIN-secured debit acceptance at retail locations and ATMs.

  • Financial Institution

    Simply defined as an organization that is in the business of handling money-moving, investing or lending or with handling financial instruments or providing financial services, a financial institution is involved in both paper and electronic monetary transactions. Financial institutions include credit unions and banks of all sorts as well as thrifts and savings and loan associations.

  • First Data

    An electronic commerce and payment solutions company headquartered in Atlanta, First Data was founded in 1969 as Mid-America Bankcard Association in Omaha, Nebraska and incorporated as First Data Resources two years later. It runs the STAR network that provides PIN-secured debit acceptance at retail locations and ATMs. The company also handles private label and gift card as well payroll and prepaid cards.

  • Force Transaction/Voice Authorizations

    Also called a post auth or prior sale transaction, a force transaction is one for which the merchant gets a voice authorization only over the phone. This low-tech processing option is often used by low-volume merchants and is time-consuming since phoning an authorization center is required to get approval on each transaction. These are declining in use because additional authorization options are available to small merchants.

  • Fraud Prevention Suite (FPS)

    A collection of software, hardware and other tools, a Fraud Prevention Suite is an array of devices, services and actions that, when used together, aim to reduce or eliminate fraudulent transactions. Some level of fraud protection is necessary during every phase of electronic transaction processing, and an FPS is part of that complete effort.

  • Funding

    An electronic transaction presented to a bank for payment is paid through a process called funding. When a merchant is paid for the deposits he has submitted, the deposits are said to have been funded.

  • Funding

    An electronic transaction presented to a bank for payment is paid through a process called funding. When a merchant is paid for the deposits he has submitted, the deposits are said to have been funded.

  • Funds Transfer System

    A communication system like a wire transfer network, ACH or association of banks of which a bank is a member and through which payment orders from the bank can be sent. Some well-known funds transfer systems include MasterCard and Visa as well as CHIPS, SWIFT, Fedwire and the National Association of Clearing House Associations, among others.

  • FuseBox

    Elavon’s relatively new payment gateway, FuseBox offers a hosted environment that is intended to limit risks by putting cardholder data behind a firewall. Like most gateways, it integrates with a wide variety of POS/PMS providers and processors and can map payment types, communications preferences, user rights and processing rules to the specific needs of a business.

  • Geolocation

    Within the context of fraud prevention, geolocation involves a variety of processes or techniques used to identify the geographic location of a card involved in a transaction in relationship to where that card is expected to be or have been. Geolocation involves quick exchange of digital information through the Internet to prevent fraud or stop a fraudulent user from continuing.

  • Global Payments

    A Fortune 1000 company, Global Payments focuses on electronic transaction services for many kinds of organizations in the U.S. and Canada as well as Europe and the Asia-Pacific. The company was an original part of National Data Corporation, founded in 1967. Today, it has offices throughout the world and provides payment processing for credit and debit cards as well as EBT and more. It is based in Atlanta.

  • Heartland Payment Systems

    A Fortune 1000 company that offers debit, credit and prepaid services as well as mobile commerce, payroll, check processing and more, Heartland Payment Systems was founded in 1997 and is based in Princeton, New Jersey with offices around the U.S. It handles more than 250,000 locations in the U.S. and more than 11 million transactions per day. It focuses on mid-sized and small businesses and has been a public company since 2005.

  • Independent Software Vendor (ISV)

    When business application software is created for a company by a third-party, this party is called the independent software vendor. In the case of transaction processing needs, this is the term that refers to the entity that creates the payment processing application for the end-user company to use in processing customer or client payments.

  • Interchange

    An interchange fee or simply an interchange is an assessment set by a credit card association and paid to member banks. This interchange that is charged to credit card processors is then passed on to merchants and is the largest portion of what is called the discount fee or the credit card processing fee.

  • Interchange Fees

    Paid by the merchant bank or acquirer for processing of transactions, including MasterCard and Visa transactions, interchange fees are paid when the transaction is exchanged. The amount of the fee can vary depending on what kind of processing method is used by the merchant to complete the transaction. Methods that aren’t completely automated or when a card is not present usually involve higher fees.

  • Interlink

    The EFTPOS division of VISA, Interlink operates mostly in the U.S. Unlike with a standard Visa debit card purchase, Interlink transactions are authenticated with a PIN and allow for the possibility of also getting cash back — or purchase and withdrawal — from the merchant as part of the process.

  • International Bank Account Number (IBAN)

    Involving a two-letter nation code and two check digits as well as up to 30 characters called the basic bank account number, international bank account numbers are used primarily in Europe but are catching on around the globe. The basic number’s requirements are not standardized and are determined by the country in which the account is located.

  • Issuer/Issuing Bank

    A bank or other kind of financial institution that is a member of a credit card network, an issuer or issuing bank provides customers with a line of purchasing or cash advance credit and reimburses an acquirer for transactions made by a cardholder. The issuing bank is then responsible for billing the cardholder.

  • JCB (Japan Credit Bureau)

    Based in Tokyo, JCB is accepted at Discover Network Merchants in the U.S. Founded in 1961, JCB became the dominate player in Japanese credit cards when it bought Osaka Credit Bureau in 1968. It now issues cards in as many as 20 nations and accounts for nearly $63 million in sales annually around the globe. Since 1981, it has been expanding aggressively around the world.

  • Jeanie

    The first online-shared ATM network in the U.S., Jeanie has been in business since 1977 and is one of the few interbank networks still under the same ownership. Firsts for the organization include the first network to offer shared deposit taking and the first to issue over-the-counter ATM cards. Today, it has more than 20 million cardholders as well as 7,500 ATMs and more than 2.7 million POS terminals across the U.S.

  • Litle

    Part of Vantiv since 2012, Litle is a payment processor focused on online and card-not-present transactions and counts many leading Internet retailers and direct response companies among its clients, including Overstock.com and GoDaddy.com. The company was founded in 2001 and maintains offices in Lowell, Massachusetts.

  • Maestro

    Founded in 1992, Maestro is an international debit card service from MasterCard that features both bank cards and prepaid cards. Cardholders sign a sales receipt or enter a PIN to authorize transactions. It is MasterCard’s primary debit brand in the EU and differs from most other types of debit cards because information cannot be input manually for transaction authorization.

  • MasterCard

    An American multinational financial services company headquartered in Purchase, New York, MasterCard’s primary business is processing payments between merchants and banks. The company was created by a group of California banks as a competitor to BankAmericard, which later became Visa. Along with Visa, it is one of the two most well-known and largest credit and debit card names in the U.S. and has been publicly traded since 2006.

  • Merchant

    Any person, organization or company that accepts credit or debit card payments that are properly presented is a merchant. This can include a retailer, an online seller, a charity or any other kind of organization that hold a merchant account and participates in a merchant agreement.

  • Merchant Account

    The merchant account is the business agreement between any kind of merchant and a credit card processor that allows the merchant to accept credit or debit payment cards from a customer or client. The merchant account is subject to various terms and conditions.

  • Merchant Agreement

    The merchant agreement is the entirety of the agreement between a merchant and an acquirer and spells out in great detail the responsibilities, rights and warranties involved in the relationship. When written properly, the merchant agreement covers all possibilities and eventualities and covers all aspects of the relationship between the two parties.

  • Merchant Bank

    Also called the acquirer, the merchant bank is the bank that a merchant uses to complete credit card and ACH transactions as well as some other kinds of payments. The merchant bank is the first step in the transaction process after the payment is accepted by the merchant.

  • MercuryPay

    Founded in 2001 and now part of Vantiv, Mercury Payment Systems provides payment technology to mid-sized and small businesses in the U.S. and Canada. The technology is built into third-party POS software apps that are part of the Mercury Network of POS dealers and developers who directly serve local merchants.

  • MSP (Merchant Service Provider)

    Also called the merchant account provider or merchant acquirer, the MSP is the entity that provides merchants with the tools and services necessary to process credit and debit cards. The provider also serves as a go-between for merchants and the issuing banks or credit card networks and has the responsibility of depositing transaction proceeds into the merchant’s bank account.

  • NMI

    Focused on worldwide ecommerce payment gateways, Network Merchants offers a suite of payment solutions through financial institutions, payment processors and ecommerce developers that want to retain their existing customers while acquiring others. It offers a private label program with a unique feel and look that efficiently and securely processes payments.

  • Non Face-to-Face Transaction

    When a card is not physically present, this constitutes a non face-to-face transaction. This can include mail order purchases and online purchases as well as details taken down over the phone. For processing purposes, some aspects of processing these kinds of transactions are handled differently.

  • NYCE

    Based in Secaucus, New Jersey, NYCE is a rival of STAR and PULSE owned since 2009 by Fidelity National Information Services. New York Currency Exchange is an interbank network in the U.S. and Canada that started in the New York metropolitan area. Started shortly after the invention of the ATM, it was one of the first such networks and now features 301,500 ATMs and 89 million customers.

  • Offline Payment Method/Offline Processing

    Offline processing is the concept of recording credit card transaction information for later processing manually or in batches. This is used as a backup method when online processing is unavailable and when accepting payments in real time at the point of sale is not possible for whatever reason. There is an increased risk of data theft because data is stored in potentially insecure locations and safeguards cannot be verified.

  • Originator

    The originator in a wire transfer or an automated clearing house or ACH payment is the financial institution that initiates the transaction. Like everyone else involved in a transaction, the originator has specific responsibilities during the transaction.

  • Payment Application Providers

    In the context of EMV, a payment application provider is a company that provides to merchants the software necessary to complete EMV-compliant payments. While a number of payment application providers are available in the marketplace, not all of them have products with the features and the commitment to security necessary for all kinds of businesses.

  • Payment Card

    A term that can be used in reference to credit cards, debit cards, prepaid card and EBT cards, the indicator payment card is used as a shorthand way of referring to any or all of those kinds of cards that may be involved in transactions initiated by a merchant and processed through financial institutions.

  • Payment Card

    A term that can be used in reference to credit cards, debit cards, prepaid card and EBT cards, the indicator payment card is used as a shorthand way of referring to any or all of those kinds of cards that may be involved in transactions initiated by a merchant and processed through financial institutions.

  • Payment Environment

    The payment environment is the collective term for all the manual and automatic processes involved in completing a payment and all the software and hardware involved. For a payment environment to be EMV compliant, every aspect must comply with specified EMV standards as outlined in EMVCo testing and other ways.

  • Payment Gateway

    An ecommerce application that simplifies the card acceptance and authorization process for bricks-and-mortar businesses as well as online retailers. This equivalent to a physical POS terminal handles the transaction between a merchant and the processor. UniPay is one example of a payment gateway.

  • Payment Page

    The payment page is the page of a website that allows for the processing of credit, debit and other payment card transactions. The payment page must be secured to meet today’s data security standards and must collect the appropriate information for accurate processing of the transaction.

  • Payvision

    An independent payment solution provider that specializes in global card payments for the ecommerce marketplace, Payvision was founded by Rudolf Booker in 2002. It focuses on technology that provides acquirers, agents, payment service providers, ISOs, MSPs and others a PCI-complaint and DSS-compliant payment processing network with the latest innovations.

  • PCI Compliance

    This indicates that a financial institution is meeting the requirements of the Payment Card Industry Data Security Standard, below, and is therefore in compliance. This proprietary standard for information security is a requirement for organizations that deal with cardholder information.

  • PCI DSS

    Short for Payment Card Industry Data Security Standard, this set of requirements established by credit card networks is designed to protect cardholder information and reduce the likelihood and occurrence of data theft. The standard applies to all participants in the transaction, including merchant account providers, issuing banks and networks.

  • PIN (Personal Identification Number)

    A code entered at a terminal when making a purchase, a PIN is a digital code associated with debit cards, some credit cards and some other kinds of transactions. The confidential code is proof of ownership of a card when using it at an ATM or point-of-sale terminal.

  • PIN Pad Providers

    In the context of EMV, PIN pad providers are companies that provide the unique devices necessary to complete the EMV-compliant payment process. Used along with the payment application in the reading of chip-enabled cards, the PIN device must be able to accept a personal identification number to make it possible to complete the authentication of the transactions.

  • Point of Sale (POS)

    Very simply the place where goods are retailed, the point of sale is where the world’s in-person credit card and other transactions take place. This is the location where POS systems, including hardware, software and manual components, come together to make the sale complete. In most cases, some kind of receipt is also issued at the point of sale.

  • POS System

    Used to complete most kinds of transactions in public sales locations like stores, gas stations and restaurants, a POS or point of sale system is the software and hardware that together allow merchants to process credit cards and other transactions that come in from the customer base.

  • Processor

    An organization that provides authorization and settlement of financial transactions on behalf of its members, a processor is connected to VISANet, Banknet and similar services to provide its clearing or settlement services.

  • Processor

    An organization that provides authorization and settlement of financial transactions on behalf of its members, a processor is connected to VISANet, Banknet and similar services to provide its clearing or settlement services.

  • PSP (Payment Service Provider)

    Offering online sellers the ability to accept electronic payments, a PSP opens a world of payment options to Internet retailers, including credit card acceptance, ACH and direct debit for real-time processing. A PSP can usually connect with many different acquiring banks, card systems and payment networks, meaning that the merchant does not have to establish these connections directly.

  • Public Key Infrastructure (PKI)

    Necessary for the support of public key encryption and similar systems, the public key infrastructure also involves key management and other related tasks. A Certificate Authority is necessary for the PKI to issue and also verify keys. The PKI includes software, hardware, people and policies, all concerned with digital certificates in some way.

  • Pulse

    An interbank network that serves 4,400 financial institutions and more than 380,000 ATMs as well as POS terminals across the U.S., PULSE is the primary competitor for STAR and NYCE. Pulse was founded in 1981 and has been part of Discover Financial Services since 2005. It is covered in Discover’s arrangement with China UnionPay, leading to greater acceptance.

  • Qualification Level

    Assigned to each transaction at interchange, the qualification level is assigned based on how well a transaction meets the merchant’s industry requirements. For a retail transaction to be assigned a level, the card has to be swiped, the terminal must be settled every day and all additional criteria for a specific level must be met.

  • Questionable Merchant

    When a merchant or location has a large number of fraudulent transactions within a specific period, it is deemed a questionable merchant. These may be reported by third-party sellers or referral groups and involve a pattern of issues. In some cases, explanations may exist for why a merchant has been deemed questionable that can get them removed from this status.

  • Quick Payment Service (QPS)

    In places like fast food chains and movie theaters, merchants may use Quick Payment Service or QPS to speed up transactions. This means they are not required to collect a signature or print a receipt unless requested by the cardholder. In most cases, an existing POS terminal can be reprogrammed to be QPS-compatible.

  • Recurring Payment

    This kind of transaction made by a cardholder involves periodic payments on a regular basis like weekly, monthly or annually for products or services. Recurring payments can include club memberships, subscriptions and regular deliveries, among many other things.

  • Refund

    Paying back money to a customer is a refund, and this initiates a series of reversals and refunding transactions throughout the payment processing arena so that ultimately the money is returned to the customer’s card or account and debited from the account of the merchant.

  • Reseller

    A reseller is a company that arranges for a business service or product in bulk, including credit card processing and other financial services, and then sells this acquisition on to an end consumer, often another business, at a profit, sometimes with additional value-added products or services.

  • Settlement

    Settlement is name for the process of verifying and collecting information about a sales transaction. The transaction moves from the merchant to the acquiring bank and then to the issuer. Settlement includes verifying files, ACH funding and Visa and MasterCard funding as well as rejections and corrections.

  • SHAZAM

    An interbank network in the Mid-West U.S., SHAZAM provides EFT services to over 1,500 financial institutions and offers ATM processing, debit card products and card authorization services, among other things. It was created in 1976 and is owned by 15 financial organizations. SHAZAM partners with Presto!, a similar network in the Southeastern U.S.

  • Spindle

    Focused on providing white-labeled mobile payment solutions, Spindle was founded in 2011 by a group of payment executives. The company is based in Scottsdale, AZ and has offices in four other states. It holds nine patents and aims to offer flexible and affordable mobile commerce gateway services. It has products that can be used as standalones or along with other acceptance, acquiring or payment solutions.

  • STAR

    The largest interbank and EFTPOS network with more than 2 million ATMs, 5,700 financial institutions and 134 million cardholders, STAR was founded in 1984 and has been a subsidiary of First Data since 2003. NYCE and Pulse are its primary competitors. It originally operated mostly on the West Coast before going nationwide.

  • Submission

    The process of sending batch deposits for processing, this is almost always handled electronically today. In the past and in some cases today, this process can be handled by mail, courier or other physical service that involves the submission of paper records.

  • Switch

    Used in the routing of payment transactions across a number of channels, a switch is an important part of payment processing and is in the form of a hosted software application. The purpose of switches, more generally, is to bridge the gap between software and hardware systems. Call agents, call servers and gateways are some of the types of switches.

  • Tokenization

    Where data security is concerned, tokenization is the process by which a sensitive piece of information is replaced or substituted with a non-sensitive element called a token that has no exploitable or extrinsic meaning or value outside the intended complex, making it essentially not worth stealing.

  • Transaction

    In its simplest form, a transaction is any event that changes a financial position, resulting from the collection or debiting of moneys. Cash advances, goods purchases or activating a revolving line of credit are all types of financial transactions, as are credit card and debit card usage.

  • Transaction Currency

    The transaction currency is simply the currency type that a transaction is processed using. Even as a transaction moves through different nations, transaction currency is maintained to maintain relative value. It can be U.S. dollars, Mexican pesos or Euros, for example.

  • Transaction Express

    The payment gateway from TransFirst, this decade-and-a-half-old solution for businesses of all sizes allows for the acceptance of many payment types in real time, just as other gateways do, but focuses on solutions that allow any personal computer to be turned into a payment processing interface with a web browser connected to the Internet used in association with a card reader.

  • Transaction Fee

    A transaction fee is the service cost that is charged to a merchant for each separate transaction. In some cases, merchant agreements may include waiving of per-transaction fees, but there are still costs in the from of monthly fees or other charges involved in processing card and bank-related transactions for merchants.

  • TSYS

    As the largest processor for merchant acquirers and bank card issuers, Total Systems Services processes more than a trillion dollars a year in debit and credit transactions. Based in Columbus, Georgia, the company has a long history that begins with its founding as a part of Columbus Bank and Trust in 1959. In 1983, it became a separate and publicly trade company owned mostly by CB&T and then by Synovus. The company is responsible for creating the TS2 and TS1 platforms.

  • Vantiv

    Based in Cincinnati, Ohio, this payment processor is the largest PIN-based debit acquirer in the U.S. and the third largest transaction acquirer by volume. Originally known as Fifth Third Processing Solution, the Vantiv name has been in use since 2011. The company has been publicly traded since 2012 and counts Element, NPC, Litle, Jeanie, Skipjack and Mercury among its acquisitions and brands.

  • Virtual account number

    Designed to make theft of an account number nearly impossible, a virtual account number is a temporary account number used for online purchases only during a very short and specified period of time. The idea is that it is impossible to steal an actual account number if that number is never used during the course of the transaction and a randomly generated one is used instead.

  • Virtual Terminal

    In an open system, a virtual terminal is an application that allows a particular terminal on a network with many users to interact with other hosts without regard for the type of terminal or its characteristics. This can facilitate remote log-ons or the access to information from another network, among other things.

  • Visa

    An American financial services company that operates around the world and is based in Foster City, California, Visa handles electronic funds transfers that mostly involve its Visa-branded credit and debit cards. It was originally launched in 1958, called BankAmericard and was part of Bank of America. Along with MasterCard, it is one of the most well-known credit and debit card brands in America.

  • WorldPay

    Previously RBS WorldPay, this payment processing company focuses on Internet and mail-order retailers and POS transactions. Its clients include multinational retailers, but most are small businesses. WorldPay was started as Streamline in the UK in 1989. In 2013, the company launched its Zinc mobile card processing technology that connects with a smart phone and also acquired the US processor Century Payments. The majority shareholders are Advent International and Bain Capital.




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