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![*]()
Glossary of Credit Card Processing Terms
![*]() Lets look at various common credit card processing
terms. As a merchant offering credit card payments, its imperative
that you understand the lingo associated with the process.
Acquirer or Acquiring Bank - The institution or organization
that processes credit cards payments for a merchant that accepts
credit cards in return for goods and services.
Authentication - Identification of individuals and
businesses through the use of digital certificates.
Authorization - The process, where it is checked if
the amount of funds required for transaction, are available
or not.
AVS - Address Verification System - The process where
cardholders address is validated against the records of credit
card issuer. The process helps in establishing the legitimacy
of the cardholder and prevents fraud.
Account Number - A unique number assigned to the cardholder
that serves as a unique identity.
Batch - A group of credit card transactions that have
to be settled with the merchants acquiring financial institution.
Card Not Present - When the card is not present during
the transaction like in case of mail order, it is termed as
Card not present transaction.
Card Present Account - A transaction where the consumer
and the card are required to be present at the same location.
Cardholder - The person who holds the credit card or
a business enterprise who is eligible to make a payment by
card.
Corporate Card - A Card held by a business unit and
is used for covering work related expenses.
Chargeback - Charge back occurs when the credit card
holder requests to debit the amount from
Merchant account.This mainly occurs when the cardholder is not satisfied with
the quality of product/service or on the occurrence of fraud.
Charge back Fees - Are the fees levied in the event
of charge back.
Debit Card - Card, which withdraws payments directly
from holders banking account to pay the merchant.
Discount Rate - Rates set by a Merchant Bank for offering
services. This rate is arrived by taking into consideration
the charges of number of factors.
Encryption - The process where data is scrambled and
unscrambled when sent over the Internet.
Gateway - An application that accepts order transactions
from merchants and sends them.
Interchange - A system managed by Master and Visa to
bring global standard in exchanging data and money between
banks.
Late Settlement - Fees paid by merchant for late processing
of settlement
Third Party Processor - Companies that enter into third
party agreements with Issuer and acquirer banks to process
settlements.
Transaction - Refers to the purchase or transfer of
money through credit card. Transactions are either offline
or online in nature, Offline transactions are those that happen
at physical establishments.
If you want explanation of any term or would like to submit
us one, please email us
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