Authorization
The process by which a transaction is approved by the issuer, or by Visa/MasterCard on behalf of the issuer. Permission is given to (or denied) the merchant, via the acquirer, to accept a specific transaction from the cardholder account. An authorization indicates only that the card is valid and that sufficient funds are available on the cardholder's credit limit at the time the request is made.
Batch
A group of approved credit card transactions, usually accumulated during one business day.
Batch Deposit
The electronic depositing of a batch file transmitted to the transaction processor for settlement.
Card Reader
Input device on a card terminal that translates the information stored on the magnetic stripe on the back of a card.
Cardholder
The person to whom a payment card is issued, or an additional person authorized by the original cardholder to use the card.
Cardholder-Initiated Chargeback
A chargeback that results when a cardholder contacts the card issuer and refuses to accept a charge appearing on a monthly billing statement. A cardholder has 90 days to initiate a chargeback.
Card Security Code (CSC or CVV/2)
This is typically a 3 or 4 digit number on the back of the card, which is separate from the credit card number. CSC CVV/2 is referred to by different names depending on the card association.
Chargeback
A challenge to a transaction initiated by the issuer or cardholder that is returned to the acquirer for resolution.
Chargeback Fee
The amount assessed by the acquirer for processing chargebacks.
Credit Card
A plastic card that with a coded magnetic stripe that, when signed, entitles its bearer to a revolving line of credit , whose size and interest rate are determined by the borrower's income and credit report . Credit cards began in the late '40s when banks began giving out paper certificates that could be used like cash in local stores. The first real credit card was issued in 1951 by Franklin National Bank in New York.
DBA
Doing Business As - the name a business uses to operate.
Decline
A response from the card issuer denying the use of the card for the attempted transaction. If a request for approval is declined, the merchant must ask the cardholder for another form of payment.
Discount Rate
The fees charged by the card acquirer to the merchant for processing payment card transactions.
Encryption
Method of scrambling data to protect a cardholder's personal information.
Expiration Date
The embossed date on a bankcard. After that date, the card becomes invalid and should no longer be accepted.
Financial Institution
Any organization in the business of moving, investing or lending money, dealing in financial instruments, or providing financial services. This includes commercial banks, thrifts, federal and state savings banks, saving and loan associations, and credit unions.
Magnetic Stripe
A panel located on the back of a payment card containing magnetically encoded cardholder account information.
Magnetic Stripe Reader
A point-of-sale device that reads the encoded information from the magnetic stripe when the card is passed through the reader. Readers may read Track Two, which contains the cardholder account number and expiration date, or both Track Two and Track One, which contains the cardholder name.
MasterCard
MasterCard, a product of MasterCard International, is distributed by issuing financial institutions around the world. Card holders borrow money against a credit line and pay it back with interest if the balance is carried over from month to month. Its products are issued by 23,000 financial institutions in 220 countries and territories.
Merchant
Store owner or seller of products.
Merchant Account
An account setup by a Merchant Bank (in this case, Innovative Merchant Solutions) which is used by the Gateway to process your credit card transactions.
Merchant Agreement
The written contract between the merchant and acquirer that details their respective rights, responsibilities and warranties.
Refund
A refund occurs when the merchant rebates all, or a portion, of an original transaction amount to the cardholder. Refunds are made to the same card that was used for the original transaction. Similar to a Credit.
Retail Transaction
A face-to-face transaction in which the cardholder presents a card to the merchant to pay for goods or services.
Reversal
When an acquirer successfully represents a chargeback to the issuer, the chargeback is reversed and the funds are returned to the merchant.
Settlement
The process in which a merchant transmits batches of transactions to the acquirer. In interchange, it is the process by which acquirers and issuers exchange financial data resulting from sales transactions, cash advances, merchandise credits, etc.
Transaction
Any action between a cardholder and a merchant or member that results in activity on the account, such as a purchase, cash advance or credit.
Transaction Date
The actual date on which a transaction occurs.
Transaction Fee
The amount a merchant pays per transaction for processing.
VISA a.k.a. VISA USA
VISA cards, a product of VISA USA, are distributed by financial institutions around the world. A VISA card holder borrows money against a credit line and repays those funds with interest if the balance is carried over from month to month in a revolving line of credit. Nearly 600 million cards carry one of the Visa brands, and more than 14 million locations accept Visa cards.
Voice Authorization
Transactions authorized by a voice operator. Voice-approved transactions must be “forced” into a terminal batch for settlement.
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