Glossary

You’ll find the definitions of some unknown words and terms here.glossary

Alphabetic search:

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

ABA Routing Number - a specific bank code used for banks in the USA.

Acquirer (Acquiring bank) - financial organization providing credit card processing services to online merchants. Merchants are supposed either to sign up an agreement with Acquirer Bank or to grant PSP with the corresponding authority.

Automatic Check Handling (ACH) - ACH can also mean Automatic Clearinghouse. ACH is a form of epayment or electronic payment. There are two ways payments can be transferred: (1) by wire transfer, or (2) through an automated clearinghouse. Wire transfer is an e-payment system that is designed to handle high-dollar, time-crucial payments, usually between large banks. ACH is designed to be an e-check or electronic check. Unlike the wire transfer, it is usually used to process higher volumes or small-dollar payments for settlement issues within 1 to 2 business days. All ACH transactions are settled pretty much the same way checks are. The clearinghouse takes all of the ACH files received daily from member banks, it then divides them by the originating bank (where the check was either cashed or deposited) and the paying bank (the bank where the check was drawn), then it totals the accounts, and credits or deducts the accounts accordingly.

Address Verification Service (AVS) - in 1996, VISA/MasterCard headquarters introduced a new regulation requiring all businesses who manually key in the majority of their credit card transactions to have a special fraud prevention feature on their credit card processing equipment. This feature is referred to as an address verification system (it checks to see that the billing address given by the customer matches the credit card).

Administrative interface - Web-based tool allowing Merchants to track their sales with customers.

Approval - confirmation code, sent by bank to confirm the fact that the credit card of buyer exists, is suitable to the use and the inquired sum is within the limits of the permissible limit.

Authorization - with authorisation is meant the communication between the customer's bank on the one hand and the bank of the Merchant on the other hand. The aim is to find out whether or not the customer has enough money to pay for the products and services offered by the Merchant. The customer's bank reserves a certain amount of money for the transaction and supplies the Merchant bank with the necessary authorisation code.

Authorization code - this code consists of letters and numbers and is sent to the bank to confirm the authorisation.

B

Bank Identification Number (BIN) - the numbers on the credit card, which unambiguously determine the issuing bank. Usually these are the first six numbers.

Batch - a group of records considered a single unit for purposes of processing. A batch can be processed automatically as well via a POS terminal.

Batch Processing - type of data processing; it processes a group of transaction as one entity.

Billing address - the address of the person, who have purchased the goods and services.

C

Capture - the submission of a credit card transaction for processing and settlement. POS terminals and real-time processing software capture transactions to submit to merchant account providers or credit card processors.

Card Issuer - financial institution (or its agent) which issues the card.

Card-Not-Present - the situation in which the seller does not have the possibility to see the buyer as well as the credit card; this will result for instance in the situation that information can not be retrieved from the magnetic strip of the credit card, to verify signature or to look at the hologram. In order to increase, in this case, the reliability of the payment system, Address Verification Service is used.

Card-Unblocking - the action of unblocking the credit card.

Certification Authority - the institute, which is in charge of the issuing of open keys.

Chargeback - a reversal of a credit card transaction, typically initiated by the transaction card issuer at the cardholder's request. Chargebacks can occur for any number of reasons, including: customer disputes, potential or actual fraud (on the part of merchants, sales associates and/or customers), processing errors and authorization issues. Chargebacks are governed by a complex set of rules and time limits that can be costly to merchants and their banks if disregarded. Chargeback Reason Code- a two digit number, through which the reason of the chargeback is indicated.

Check Guarantee - a service (commonly offered to merchants) guaranteeing that a check writer has sufficient funds on his deposit to cover the payment.

Chip Card - a smart card, a plastic card, that is equipped with a microprocessor on which electronic money can be stored.

Commerce Server - a Web server that contains the software that is necessary for processing customer orders via the Web, including shopping cart programs, dynamic inventory databases, and online payment systems. Commerce servers are usually also secure servers.

Confirmation Letter - the electronic letter, which is sent to the Merchant and contains information regarding the processed batch files.

Creditcard - This is a type of bank card that can be widely used all around the world as a form of payment. The credit card holder must then reimburse the credit card company for the amount of the total sales the holder had charged on that particular credit card.

Credit card Processors (Third Party Processors) - merchant services providers that handle the details of processing credit card transactions between merchants, issuing banks, and merchant account providers. Website operators usually must first establish their own merchant account before contracting for credit card processing services.

Customer - end customer (buyer) performing electronic shopping.

CVV2/CVC2 - this is the check number, which consists of three numbers, which is printed on the reverse side of bank card. The introduction of this number helps to ascertain that the card is used by a real owner. CVV2 classification is used for VISA cards. CVC2 classification is used for MasterCard cards.

D

Debit card - a financial instrument used by consumers instead of cash. Unlike a credit card, debit card purchases are deducted automatically from the cardholder's account, like a check. Visa and MasterCard now offer debit cards through banks and other financial institutions.

Decline - the decline of a credit card transaction.

Deposit - the moment at which the Merchant creates a batch file and sends the transactions for processing.

Deposit bank - the bank to which the money of the customer will be transferred to.

Digital signature - this signature is needed to determine the integrity of the source.

Digital wallet - a consumer account set up to allow e-commerce transactions through a particular credit card processing system. Before the consumer can make a purchase, he or she must first establish an account with the credit card processor, who provides an ID and password. These can then be used to make purchases at any Web site that supports that transaction system.

Discount rate - This is a fee that the major credit cards charge for handling a transaction.

E

E-commerce - the processing of economic transactions, such as buying and selling, through electronic communication. E-commerce often refers to transactions occurring on the Internet, such as credit card purchases at Websites.

Electronic Data Interchange (EDI) - a global computer network, separate from the Internet, used to handle financial transactions between banks and other institutions.

Electronic Data Capture - the use of a POS terminal for validating and submitting credit card transactions to a merchant account provider or other credit card processor. In online credit card processing, software takes the place of the POS terminal.

Electronic Cash Register (ECR) - electronic cash register, in other words, the combination of cash register and POS- terminal. Frequently ECR - this is the program application, is established on a personal computer.

Electronic Draft Capture (EDC) - the system, in which the transactions are transferred from different places to the central computer (Host Computer) for the storage and the processing. The transactions accumulated during the period are then transferred to the processor of payments.

Electronic Money (e-money) - digital available amount of money. It is stored in electronic form on a computer or a microprocessor. Digital available amounts can be purchased and remain on a special storage device.

Electronic Wallet - software that enables a cardholder to conduct online transactions, manage payment receipts and store digital certificates.

Electronic purse - a smart card on which electronic money can be stored.

F

Factoring - the purchase of debts owed, or "accounts receivable," in exchange for immediate payment at a discount. In e-commerce, the term is often applied to ISO's that offer to process credit card transactions through their own merchant account rather than through an account established by the merchant, in exchange for a percentage of the transaction or other fee. Factoring of credit card debts is illegal.

Fraud screening - all procedures intended to prevent customers from using of fake or stolen credit cards.

Front-end - information, which the buyer sees on the website of the merchant. Front-End makes it possible for buyers to interact with the electronic basket, the data base, and to also pay purchases.

H

Hold back (reserve account) - a portion of the revenue from a merchant's credit card transactions, held in reserve by the merchant account provider to cover possible disputed charges, chargeback fees, and other expenses. After a predetermined time, holdbacks are turned over to the merchant.

Host capture - the automatic composition of a batch- file for the processor of payments or the payment gateway.

Host computer - the computer responsible for the authorisation and completion of the transaction.

I

Interchange - a standard format for sharing or transferring data electronically between parties that do not share a common application. Usually a format that is platform-independent is agreed upon as a standard. Examples of common interchange formats include EDI (electronic data interchange), ASCII (American Standard Code for Information Interchange), and GIF (graphics interchange format).

Independent Sales Organization (ISO) - This is an organization that processes merchants online credit card transactions in exchange for a percentage of the sales or transaction fees.

Issuer (Issuing bank) - the bank or other institution that issues a credit card or debit card to an individual.

K

Key - numbers which are applied for cryptographic algorithms.

Key length - the length of a key, expressed in bytes.

L

Limited-purpose prepaid card - a smart card, which only can be used in particular points of sale.

Load - the activity to load digital available amount of money into the digital purse.

Load log - a file containing the most recent loads.

Local review - the ability of salesman to see from its terminal or ECR the contents of a batch- file after the completion of transaction.

Locking (Card blocking) - the blocking of a smart card after which it can not be used.

M

Magnetic stripe - can be found at the back of the credit card and contains coded information about the card.

Manual Entry (Key entry) - the operation of manual entering of the parameters of card with the use of the keyboard of computer or a POS- terminal.

Member - financial establishment - the member of the association of international pay system.

Merchant - E-commerce Web-site owner providing electronic sales function.

Merchant Account - a bank account established by a merchant to receive the proceeds of credit card purchases. By establishing a merchant account, the merchant bank agrees to pay the merchant for valid credit card purchases in exchange for the right to collect on the debt owed by the consumer.

Merchant Account Provider (MAP) - a institution that hosts merchant accounts and processes online credit card transactions. The term is also often used broadly to include any credit card processing service, including ISOs.

Merchant Agreement - the written agreement between the salesman and the bank (is possible, between the salesman, the bank and ISO), that establishes rights, responsibilities and guarantees of sides in the process of the card payments methods.

Merchant Bank - the bank, which offers merchant accounts.

Merchant Category Code - the code which indicates the type of activities of the Merchant.

Micro payment - micro-payment, very small sum, possibly, can be lower than the cent.

MID (Merchant Identification Number) - unique identifier issued by Acquirer Bank in order to track and collect Merchant's online payments.

Monthly minimum - This is the amount of fees you must meet each and every month. If month sales do not make the monthly minimum the merchant account holder must make up the difference.

N

Non-Qualified - the designation of the transaction, which is characterized by an increased risk (for example, in the case, when transaction is achieved with the aid of the transfer of the parameters of bank map with the physical impossibility of access to it).

P

Payment form - web-based electronic form provided by GMC Online Payments PSP to Customers where Customers have to enter their personal and credit card data in order to perform payment using Credit Card.

Payment processing - a process of attempting to charge some value from customer's credit card.

Payment system - financial organization (or association of financial organizations) providing financial services to customers and allowing them to use credit cards that are identified by its number and some supplementary information.

Pc Pos Application - computer is a program application, which unites two functions from the list: cash register, the calculation of values, bookkeeping program, program for authorization and method of credit card payments.

PIN (Personal Identification Number) - an alphanumeric or numeric code used to verify the identity of an individual attempting to use a credit card, debit card, or other account.

POS Terminal (Point of Sale) - an electronic device used for verifying and processing credit card transactions. If the credit card is available, the merchant can swipe the card through the terminal. See also swipe discount rate and MOTO discount rate.

Post authorization - the transaction, which precedes the vocal authorization.

Pre-paid card - a smart card on which electronic money is stored.

Prior Authorized Sale - the transaction, for which first authorization is needed. Salesman authorizes credit card before granting to products and services.

Private information - a combination of credit card (Account) number with customer's name and some other private data.

Private Key - the secret key, to which only its owner has access to. The open key corresponds to a secret key.

Processor - the processor of payments, a computer center, which generates master operations of payments.

PSP - Payment Processing Provider (means GMC Online Payments PSP).

Public Key - the open key, the non-secret part of the pair of two keys in asymmetric cryptography.

Public Key Certificate - the certificate of the open key. Information about the open key, as a rule, which includes the key itself, signed by a digital signature of physical face or organization. Certificate protects the integrity of the key, if person or organization, that signed him, is well known, and their open keys are widespread.

Public Key Cryptography - the diagram of coding, which does not require confidential channel for establishing the confidential connection.

Public Key Encryption - the method of coding, developed for the purpose of overcoming the main disadvantage in symmetrical cryptography - the need for having reliable channel for the transfer of key to addressee.

R

Real-Time Processing - the verification and processing of credit card transactions immediately following a purchase. Real-time verification on the Web usually takes less than five minutes. Real-time verification is especially important for websites that sell products and services that consumers expect immediately, such as memberships to the site or software downloads.

Receipt - the check, which contains the description of the purchase with the credit card, usually includes the following information: date, name and the address of salesman, sum, unique number and the code of authorization.

Recurring Fees - regular, usually monthly, charges for maintaining a merchant account. Recurring fees include the discount rate, transaction fees, statement fee, and monthly minimum.

Recurring Transaction - the periodic removal of money from the account of buyer, proceeding on the basis of agreement.

Retrieval Request (Copy Request) - the requirement to a salesman to present documentation about the concrete transaction. Usually it comes from bank, when the holder of the card disputes a transaction.

S

Secure Server - a Web server or other computer connected to the Internet that is capable of establishing encrypted communication with clients, generally using SSL or SET.

Session Key - the key for the symmetrical coding, which is used for a limited time, is more frequent used for a protected connection, for example, on protocol SSL.

SET (Secure Electronic Transaction) - the system of providing safety of payments for bank cards, developed by the companies VISA, MasterCard, Microsoft and by several leading banks, based on the coding with the open key of the information, connected with the parameters of the card, and with the separation of information between participants in the transaction in such a way that none of the participants in the calculations possesses information wholly. With the aid of standard SET, the buyer and salesman can unambiguously identify each other, after exchanging the digital SET- certificates.

Settlement (Draft Capture) - a process of completing fund transfers so that all parties in a transaction are paid for their goods or services.

Setup Fee - one-time pay, collected for the creation of the Merchant Account.

Shopping Basket - As you shop online, you add items to your 'virtual' shopping basket. The basket is simply a list of the items you have selected to buy, together with the necessary details (number selected, price of each item etc). You can review what's in your basket at any time as you shop.

Shopping cart - Software used to aid customers when ordering a number of products/services from a merchants web site.

SIC Code - the code of standard business- classification (Standard Industry Classification). This is the four-place number, which determines the type of activity.

Smart Card - a plastic card containing a computer chip that can store electronic "money". Unlike a credit card, a smart card can only spend out the dollar amount its owner has already put into the card account. It's similar in function to a prepaid calling card but is available for all purchases.

SSL (Secure Socket Layer) - a system for encrypting data sent over the Internet, including e-commerce transactions and passwords. With SSL, client and server computers exchange public keys, allowing them to encode and decode their communication.

Statement Fee - the fixed periodic pay for the use of a Merchant Account.

Surcharges - additional charge for the method of payments of the bank cards.

Swipe Discount Rate - the discount rate charged by a merchant account provider for transactions in which a credit card is available for inspection by the merchant. Swipe discount rates are generally lower than MOTO discount rates because the merchant can match signatures and perform other checks for fraud or miss-use.

Symmetric Cryptography - symmetrical cryptography or cryptography with the closed gate. The cryptographic algorithm, in which for the coding and the decoding is used one and the same key.

T

Third Party Processor - a company that processes transactions on behalf of the banks or other participants to those transactions.

Ticket Only - the monetary value of an order placed by credit card.

Terminated Merchant File (TMF) - Merchants with excessive chargebacks are stripped of their merchant account and the ability to accept credit card orders. The merchant is then placed on the TMF match list that all Merchant Service Providers have access to. Being placed on this file can keep you from obtaining another merchant account for several years.

Transaction - This is any action between a cardholder and a merchant that results in activity on the account, such as an authorization and settlement. Merchants and financial institutions also conduct follow-on transactions that affect the cardholders' account, such as a capture and credit.

Transaction fee - A fee charged by a merchant account provider for each credit card transaction completed.

Transaction File (Vendor File) - the file, into which the processor of payments places all transactions, carry out in the previous day.

Transaction Log - the transactions, recorded by the state of accomplishment.

Turn-key - A solution a firm offers in which they provide an individual with a fully e-commerce enabled web site. Usually complete with shopping cart, web design, hosting and merchant account.

V

Voice Authorization - vocal authorization. It applies, when there is no suitable device for conducting the authorization, for example, of POS- terminal.

Void - the refusal of the buyer's payment after successfully passed authorization. The transactions, marked as Void, are not included into the batch and are not presented to further payment.

X

XML - a meta language containing a set of rules for constructing other markup languages. With XML, people can make up their own tags, which expands the amount and kinds of information that can be provided about the data held in documents. It enables designers to create their own customized tags to provide functionality not available with HTML. For example, XML supports links that point to multiple documents, as opposed to HTML links, which can reference just one destination each.