Glossary

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3D-secure
The technical standard developed by Visa and MasterCard to further secure card transactions over the internet. It allows the cardholder to be authenticated at the time of the transaction thus reducing the risk of fraud.

A.

ACH
Automated Clearing House. This is the US nation-wide system for EFT, used by most financial institutions (also called direct deposit or electronic deposit). It is restricted to transfers among US Banks in US dollars.

ACID
Acquirer Chargeback ID. The ACID (formerly known as MID or Merchant ID) is supplied by the acquiring Bank and used to identify each Merchant. It is set up with the acquiring Bank and is the account in which chargebacks and reversals are settled.

Acquiring Bank/ Acquirer
A financial institution that provides processing accounts for Merchants. It is also known as a Merchant Bank or Acquirer and means any Bank or financial institution:

Address verification system
 (also known as AVS) A fraud-prevention system that matches the address information provided by the consumer for card-not-present credit/debit card transactions with the address information kept on record by the card issuers.

Altered Card
Genuine card's magnetic stripe removed and replaced with fraudulently obtained card information.

Amex
American express credit card or Chargecard.

APACS
APACS, the UK payments association, is a trade association for institutions delivering payments services to end customers. It provides the forum to address co-operative aspects of payments and their development. It is also the main industry voice on issues such as plastic cards, card fraud, cheques, electronic payments and cash.

Application Fraud
Fraudsters use false details to apply for Money Transmission Facilities, Loans or Credit cards. Applications to open accounts are screened using various scoring products before confirming the account meets minimum criteria and can be opened. Account Opening is now a regulated product and must meet strict identification requirements (KYC). Fraudulent applications are identified during this process. Various 'shared' databases are available to search for suspect applications; two of the most common are 'Hunter' and 'Detect'.

Approved product(s)
Means a product or service, physical, tangible or virtual:

• For which the acquiring Bank provides authorization; and
• That has been advised to and acknowledged by the acquiring Bank as acceptable under the service.

ARN
Acquirer's reference number. This is the unique number (usually 23 digits) assigned by the acquiring Bank to every transaction being settled or refunded via the credit card association networks and subsequently referenced by the issuing and acquiring Banks in processing chargeback items (retrieval requests, chargebacks, and chargeback reversals) that relate to that original transaction. This value consists of a unique 7-digit acquiring Bank number, a 4-digit Julian date value, an 11-digit Merchant transaction id, and a check digit in position 23.

Authorization
A card enquiry-only transaction that verifies that funds are available on a customer's card, but that only reserves those funds and does not transfer them to the Merchant. When the good or service is provided to the customer, a settlement must be made by the Merchant to complete the transaction.

Authorized signatory
An individual authorized by the acquiring Bank to sign a Merchant application.

Automated Teller Machine (ATM)
Also known as a cash machine, cash dispenser or hole-in-the-wall machine. A computerised self-service device permitting the holder of an appropriate card and personal identification number (PIN) to withdraw cash from their account and access other Banking services.

AVS
See Address Verification System (above)

AVS code
A letter code that represents the AVS results of a transaction.

B.
 
BACS
Bankers Automated Clearing System. BACS is the UK version of EFT and is used for the Euro and British Pound currencies.

Bank transfer
Means a payment between the nominated Bank accounts. Bank transfer is understood to be the generic term for domestic or international Bank, credit, wire, Giro and other similar transfers.

Basis point
A basis point is one one-hundredth of a percent. Discount rates are expressed as basis points.

BIN (Bank or Base Identification Number)
Bank Identification Number. The first six digits of a credit card number, used to identify the issuing Bank.

Bond
Means an insurance bond to the benefit of the acquiring Bank to protect the acquiring Bank from unsatisfied debts of the Merchant.

Business day
Means a day on which Banks are open for business in the principal financial centre of the Acquiring Bank's country.

C.

Cap
The maximum the acquiring Bank agrees to process for a Merchant in a given time period. For example, a Merchant may have a cap of $100,000 per month.

Card
Means any form of credit card, payment card, charge card; debit card, stored value card, loyalty card, or any virtual card bearing the logos of a Card Scheme processed by the acquiring Bank as notified and approved by the acquiring Bank from time to time that permits or enables transactions on a cardholder's account, which may be used by a cardholder to complete a transaction. A card shall be deemed to be current if the date of purchase occurs on or prior to the last day of the month and year of expiration embossed on the card and on or after the first day of the month and year of validity embossed and/or encoded on the card, (if any).

Card account number
Means a primary cardholder account number that is embossed and/or encoded on a card.

Card issuer
A Card Scheme member that issues cards to cardholders pursuant to Card Scheme rules

Card not present transaction/cardholder not present
See CNP

Card-Present transaction
See POS

Card Scheme
Card Schemes set the business rules that govern the issue of the payment cards that carry their logo. Typically, these rules apply throughout the world to ensure interoperability of cards. In many countries, domestic schemes also operate. The schemes operate the clearing and settlement of payment card transactions. In the UK, Banks and building societies must be members of the appropriate scheme to issue cards and acquire card transactions. Examples of international Card Schemes in the UK are Visa, MasterCard, American Express and Diners Club.

Card Scheme member
Means a financial institution that participates in a Card Scheme and agrees to operate in accordance with that Card Scheme's rules.

Card Scheme rules
Means the bylaws, rules, regulations, operating regulations and procedures issued by a Card Scheme, card issuer or licensor similar, but not limited to MasterCard, Visa, Europay, Laser etc as amended or supplemented from time to time.

Card Validation/Verification Data
See CVD

Cardholder
Any legal or natural person to whom a card is issued, who is authorized to use such card, and whose signature appears on the card as an authorized user, who purchases products marketed, sold, or distributed by the Merchant, and who executes, submits, and authorizes a payment by the card.

Ceiling limit
Means the maximum value of a single sale incurred on any one occasion that the Merchant may complete in any circumstances.

Chargeback
Means an invalid (in the exclusive opinion of the card issuer) sale that a cardholder disputes with the card issuer pursuant to the rules which is returned to the acquiring Bank as invalid by the card issuer pursuant to the rules; A chargeback occurs when a credit/debit card holder disputes a card transaction with the issuing Bank. The issuing Bank initiates a chargeback against the Merchant account. The issuing Bank refunds the card holder and then, if there is no proof forthcoming that the card holder is responsible for the purchase, that amount of money is deducted from the Merchant's account in order to reimburse the issuing Bank.

Chargecard
A payment card, enabling holders to make purchases and to draw cash to a pre-arranged ceiling, the terms of which include the obligation to settle the account in full at the end of a specified period. Cardholders are normally charged an annual fee.

Cheque
Means a cheque payment made by one party to the other. Cheque is understood to be the generic term for personal and Bank cheques and postal and money orders.

CHID
Clearing House ID. The CHID (formerly known as TID, or terminal id) is used to identify each Merchant terminal. It is set up with the acquiring Bank and account in which chargebacks and reversals are settled.

Chip and PIN card
A payment card containing a chip that requires the use of a PIN as the preferred method of cardholder verification at the point-of-sale (not only at ATMs). In this context, 'preferred' relates to the cardholder authentication process demanded by the combination of card and terminal that, in the case of chip and PIN card inserted in a chip and PIN-enabled terminal, requires customers to enter their 4-digit PIN at the point-of-sale.

Chip card
Also known as an integrated circuit card (ICC) or smart card. A chip card holds details on a secure computer chip that can store and process information; chip cards usually also have a magnetic stripe.

Cirrus
A MasterCard brand enabling a cardholder to obtain cash at an ATM.

Clearing house
A third-party Processor such that provides credit card clearing and settlement services. Also known as a clearing network or a gateway.

CNP
A card-not-present transaction is one in which goods or services are purchased but for which it is not possible to obtain a signature and the credit card is not swiped. Online and MOTO transactions are examples of CNP transactions. CNP transactions introduce extra risk and so incur higher rates and require extra security measures such as CVD, AVS, etc. Compare with pos transactions. Means a transaction that is completed when neither the cardholder nor the cardholder's card is physically present at the point of sale and visible to the Merchant.

Code 10
A Code 10 call is made by a point-of-sale retailer, through a retailer's Acquirer authorisation centre, when the retailer is suspicious of a card, a cardholder, the circumstances of the transaction or when the retailer has been instructed to make such calls as part of a tactical fraud prevention measure.

Collection assistance
Correspondence from one Card Scheme member to another asking for a chargeback to be reversed.

Compromised Card
Any type of physical card captured with a potential to be used for fraudulent purposes, generally having been reprogrammed with genuine card details; e.g:

Counterfeit/skimmed
Lost/stolen
Intercepted - Issued as a result of account take-over/application fraud 

Continuous authority transaction
A transaction for which a cardholder grants written permission to a Merchant to periodically charge their card for recurring goods or services (for example, a club membership or magazine subscription).

Convenience
Refers to the location of ATMs in so-called convenience stores, comprising newsagents, corner shops, off licenses, open-all-hours general stores.

Counterfeit card (cloned/skimmed)
A device or instrument that has been printed, embossed or encoded so as to purport to be a legitimate card but which is not genuine because the Issuer did not authorise the printing, embossing or encoding.
An instrument that has been printed with the authority of the issuer and which has been subsequently embossed or encoded without the authority of the Issuer.
A card that has been validly issued and which has been altered or refabricated. 

Counterfeiting
Counterfeiting involves the fraudulent reproduction of original documents/ instruments in a manner that enables the fraudster to pass them off as genuine/ original items.

Most common items counterfeited include:
Cheques - an increasing problem on both corporate/business and personal accounts
Plastic cards
Bankers Drafts 
 

Credit
A credit card/direct debit transaction that refunds money to a customer from a Merchant account, usually for a returned good or service. A credit card credit is processed against a previous settlement

Credit card exposure
Credit card exposure consists of several components: credit exposure, delayed delivery exposure, discount and fee exposure, and average ticket exposure. A Merchant's credit card exposure is determined via a calculation of the total sum of credit, delayed delivery, and discount and fee exposure.

Credit policy
Means the confidential (to the acquiring Bank) underwriting criteria of the acquiring Bank as may be amended by the acquiring Bank from time to time.

Credit ratio
The credit ratio is a Merchant's credits-to-settlements ratio. For example, if a Merchant has 100 settlements and 3 credits on visa for a given month, their visa credit ratio would be 3.00%. According to visa regulations, Merchants in certain industries are not permitted to have a visa credit ratio that exceeds 5.00%.

Credit return
A credit return transaction is a direct debit transaction. A credit return transaction results when a direct debit credit transaction has been reversed, resulting in a credit back to the Merchant's account.

Credit scoring
A process by which an applicant for processing could be automatically assessed by allocating a score relevant to each item of information gained concerning the Merchant. Merchants would "pass" if they reached an acceptable score.

CVD (Card Validation Data)/CVV (Card Validation Value)/CSC (Card Security Code)
Card validation data (also known as card verification data, card verification number, and card validation value). A security feature used to reduce fraud for CNP transactions. The CVD is a 3- or 4- digit number printed on a credit card, but not present on the card's magnetic strip. When a CNP transaction takes place, the card holder provides the CVD as proof that they have the card in hand. The acquiring Bank supports two CVD-related fields: CVD indicator, which indicates whether or not a CVD value was submitted with the transaction; and CVD value, which is the 3- or 4-digit number itself.

D.
 
Debit card
A debit card is a payment card for which the funds are withdrawn directly from the card holder's Bank account either at the time of sale or after batch settlement.

Declined
A declined transaction is a direct debit transaction type at the acquiring Bank. A declined transaction was processed by the acquiring Bank but was then declined at the Banking-network level for some reason, e.g., due to insufficient funds in the customer's Bank account.

Deposit
See pre-payment

Direct debit
This is a payment by which a customer authorizes a debit their Bank account directly for goods/services rendered.

Discount rate
A discount rate is the amount charged to a Merchant by the acquiring Bank for processing a transaction. It is usually a percentage of the transaction amount. The rate is typically based on such criteria as monthly transaction volume and average ticket amount. The acquiring Bank charges discount rates for both credit card and direct debit transactions.

Disputed sale
Means a sale that has been disputed by a cardholder, either directly by notification to the acquiring Bank; card issuer or the Merchant by the cardholder.

Downgrade
A downgrade in transaction processing refers to a downgrade in the quality of a transaction due to circumstances that make that transaction more risky to process. Downgraded transactions are assessed and priced according to their inherent risk, and this additional cost is passed on to the Merchant. The payments industry has, for certain pricing scenarios, grouped the different downgrade classifications into three downgrade levels:

• Qualified (qual)
• Mid-qual
• Non-qual

E.

E-check
A secure online payment that debits the consumer's Bank account to pay for goods/services. Also refers to a direct debit transaction.

E-commerce
The activity of financial or commercial exchanges processed over the internet.

ECI code
Electronic Commerce Indicator Code. This is a two-digit value that gets returned by the card issuer indicating whether the cardholder was successfully authenticated in an Internet transaction.

EDI
Electronic Data Interchange. EDI is a global computer network, separate from the internet, used to handle financial transactions between Banks and other institutions.

EFT
Electronic Funds Transfer.

Electron
A Visa debit card. All Electron purchases are subject to electronic authorisation.

Electronic commerce (internet or mail-order)
Transactions that are conducted over an electronic network where the buyer and Merchant are not at the same physical location, e.g. plastic card transactions via the Internet.

Electronic Point of Sale - EPOS
A terminal or similar device that may be used at the point of sale; e.g. shop, Bank etc.

Electronic purse (e-purse)
Also known as an e-purse. A stored-value payment card used to pay for goods and services. It is an alternative to cash. The card can be disposable or re-loadable. The stored value is reduced as payments are made.

EMV
The internationally-agreed standards for chip payment cards, originally agreed by Europay, MasterCard and Visa. EMV standards are maintained by EMVCo, an organisation owned and managed by MasterCard, Visa and JCB.

F.

Factoring
See laundering

Financials
A balance sheet and profit/loss account.

Fine
A levy by a Card Scheme on an Acquirer imposed punitively for a breach of the Card Scheme rules

First request
See retrieval request

Floor limit
Means the maximum value of a single sale incurred on any one occasion that the Merchant may complete without express authorisation from the Card Scheme or a card issuer.

Fraud database
See negative database

Fraud screening system
A system that may include but is not limited to:

• Putting a monitoring program in place to identify fraudulent transactions to the reasonable satisfaction of the acquiring Bank where operationally feasible
• Transaction risk - i.e. cardholder
• Watch list (secure fraud control)
• Use of AVS (where the same is available from time to time)
• Negative files
• Positive files
• Hot card files

Fraudulent transaction
Any transaction that is prohibited by Card Scheme rules or by law.

Fulfilment
A document image that the acquiring Bank supplies in response to a retrieval request

G.

gaming
Means:

• Betting
• Bingo
• Casino-style games
• Funding an account established by the Merchant on behalf of the cardholder
• Purchase of value for proprietary payment mechanisms (when a purchase of value for proprietary payment mechanisms, such as e-cash accounts, is used to pay for internet gaming, these transactions must also be classified as gaming transactions, since they pose the same risk concerns.)
• Forecasting & tipping

Gateway
See clearing house

Good faith
See collection assistance

Guarantee
Legal assurance of a product's/service's fitness for the purpose given by a Merchant for a fixed time period. Usually compensation in some form is given if the product/service does not live up to the guarantee. See also third-party guarantee and Personal Guarantee.

H.

Hot card file
A computerised list of reported lost and stolen cards available to Merchants to assist in the identification and prevention of fraudulent transactions.

I.
 
Identity Theft/ Fraud
This occurs when someone uses your personal information such as your name, social security number, credit card number, or other identifying information without your permission, to commit fraud or other crimes.

It commonly arises from the interception of mail, by being 'socially engineered', or even having your bin raided.

It may also be illustrated through the impersonation of the dead; using the identity of deceased of which information is freely available via graveyards, obituaries in daily/ local newspapers or from the public records of births, marriages and deaths.

Institution ID
For Canadian Merchant accounts, the Institution ID is the unique 3-digit identification number specifying the Bank associated with a direct debit transaction. For direct debit transactions, this is concatenated with the transit number

Integration/Interface
Means the connection of the Merchant's website or back-office to the acquiring Bank.

Interchange
Interchange refers to the money paid from the acquiring Bank to the debit or credit card issuer for a transaction. The credit card companies set the interchange level of each transaction, as well as the discount rates and transaction fees for each of those interchange levels. In general, interchange is what the acquiring Bank is charged to process a transaction

Intermediary Bank
An intermediary Bank is any Bank through which a payment must go to reach the beneficiary Bank.

Invoice
Means any record - hard copy or electronic - with which the Merchant solicits payment of the purchase price from a cardholder.

Issue number
An issue number is a 1- or 2-digit number located on the front of certain debit cards (e.g., Maestro and Switch) following the card number itself. It is submitted as an additional transaction parameter.

Issuing Bank
Also known as Issuer. A Bank that issues credit/debit cards to card holders. The issuing Bank maintains the consumer's credit card account and pays out to the Merchant's account in a credit card purchase. The issuing Bank then bills the customer for the debt.

J.

JCB
JCB is an international credit card with over 45 million card holders in 189 countries, and accepted by over 10 million Merchants.

K.

Kiting
Kiting occurs when a Merchant deposits charge transactions against the Merchant's own credit card for the purpose of obtaining funds. This practice, which violates Card Scheme Rules, most frequently occurs when a Merchant experiences cash flow difficulties and cannot obtain money from traditional sources.

L.
 
Laser
Laser is a UK-based debit card brand with over 1 million card holders.

Laundering
Laundering refers to the practice by the Merchant of depositing charges on behalf of other Merchants who do not have their own processing relationships. Often the Merchant perpetrating the fraud is a front operation for other legal or illegal operations, which by virtue of their business practices are not eligible to become Visa or MasterCard Merchants. MasterCard prohibits such activity; it makes the assessment of risk almost impossible, as the Acquiring Bank does not have a full view of the end Merchants accepted. Compare with Money Laundering

M.
 
Maestro
The MasterCard-owned international debit card brand. Maestro owns the Switch debit card, and is migrating that brand to Maestro.

MasterCard
Means MasterCard international incorporated (a Delaware corporation).

MasterCard SecureCode
The MasterCard brand name for their service that uses the 3D-secure standard.

MCC
Merchant Categorization Code. MCCs are used by a Card Scheme to define a Merchant's business type. Each MCC reflects a different Merchant type or sector. See also SIC

Merchant
The party offering goods or services in exchange for payment. The Merchant maintains an account with the acquiring Bank, which allows them to process their transactions online. Also means the seller of approved products that is A party to a Merchant Agreement with the acquiring Bank; and
Satisfies Credit Policy; and The entity that contracts with the acquiring Bank to process card transactions 

Merchant account
The account maintained by the Merchant with the acquiring Bank, which allows them to process their transactions online.

Merchant agreement
The agreement that the Merchant signs when accepted by the acquiring Bank.

Merchant Bank account
Means a separate account maintained at a Bank or financial institution acceptable to the acquiring Bank by the Merchant solely in order to facilitate settlement.

Merchant exposure
Merchant exposure is defined as the sum of credit card exposure.

Merchant facility
Means the facility created for the Merchant and maintained by the acquiring Bank in the name of the Merchant under the service, any record of the transactions processed, payments received from the Merchant and the fees and Merchant service charges due from the Merchant.

Merchant number
Means the unique processing number(s) allocated by the acquiring Bank to the Merchant notified to the Merchant by the acquiring Bank under which transactions may be submitted.

Merchant service charge (MSC)
Means the fees and Merchant service charges of the acquiring Bank for the service based upon the face value or count of transactions submitted to the acquiring Bank by the Merchant for authorisation and settlement (including the percentage Merchant service charge and the per transaction Merchant service charge) and such other charges levied by the acquiring Bank on the Merchant for providing the service; as notified to the Merchant by the acquiring Bank from time to time.

MID
Merchant Identifier, which has been replaced by the ACID. Both the acquiring Bank and Issuing Banks use MIDs to identify Merchants.

Mid-qualified rate
See downgrade

Minimum settlement
Means the minimum amount which the acquiring Bank agree to settle to the Merchant in any one payment.

Misrepresentation
Misrepresentation occurs when the Merchant knowingly deceives the cardholder into purchasing a good or service by making false claims. In some cases, a good or service is delivered that is materially different from that promised. In other cases, the good or service is never delivered. Misrepresentation is most common when there is a delay between purchase and delivery of the good or service. MOTO businesses have a higher incidence of this type of fraud than traditional retail operations.

Money laundering
Money laundering is the processing of illegally obtained funds through legal Banking and financial systems in an attempt to disguise the illegitimacy of the funds. Compare with laundering

MOTO
Mail-order/Telephone Order - a CNP transaction type.

Multi-currency transaction
Transaction for which the currency the cardholder uses to make the payment differs from the currency in which the Merchant receives payment. This allows cardholders to purchase goods and services in a currency that they recognize and understand.

N.
 
NACHA
National Automated Clearing House Association. NACHA provides rules and guidelines for the efficient operation of the ACH network.

Negative database
A database of email addresses, credit card numbers etc that have been involved in fraud or potential fraud. All transactions through the acquiring Bank transaction Processor are verified against the negative database before being accepted. The acquiring Bank personnel can usually create, edit, and delete negative database entries and where a matched entry may, at the sole discretion of the acquiring Bank; result in that transaction being declined. Negative files include hot card files and other files created through the acquiring Bank processes for similar purposes.

Non-qualified rate
See downgrade

O.

ODFI
Originating Depository Financial Institution. A participating financial institution that originates ACH entries at the request of and by agreement with its customers.

P.

Percentage Merchant service charge
Means that part of the Merchant service charge based on a percentage of the value of sales and/or refunds submitted by the Merchant to the acquiring Bank.

Per transaction Merchant service charge
Means that part of the Merchant service charge based on the count of sales and/or refunds submitted by the Merchant to the acquiring Bank.

Phishing
Phishing is the name given to the practice of sending e-mails at random purporting to come from a genuine company operating on the Internet, in an attempt to trick customers of that company into disclosing information at a bogus website operated by fraudsters. These e-mails usually claim that it is necessary to "update" or "verify" your customer account information and they urge people to click on a link from the e-mail which takes them to the bogus website. Any information entered on the bogus website will be captured by the criminals for their own fraudulent purposes.

Point-of-sale
See POS

POS
Point-of-sale. The physical location of a credit/debit card transaction for goods and services, where the card holder is present and the card is swiped in a reader. Also known as card-present transaction. Compare with CNP.

Positive file
Means a database of card account numbers or other data entries stored in the acquiring Bank fraud screening system or in other the acquiring Bank systems, against which transactional data is compared, and where a matched entry may, at the sole discretion of the acquiring Bank; result in that transaction being automatically accepted so long as authorised. Positive files include the card and other data for well-known (to the Merchant) cardholders.

Post-authorisation
Means confirmation from the Merchant that a pre-authorised sale can be processed in accordance with this agreement and subject to the rules.

PPD
Prearranged payment or deposit. A direct debit transaction format, usually initiated in the context of a standing obligation (e.g., monthly club dues) that debits/credits a consumer's account on a regular basis to satisfy the obligation.

Pre-authorisation
Means the advice of a sale for immediate authorisation but later processing date in accordance with this agreement and subject to the rules.

Pre-payment
Part or full payment by a cardholder for a Merchant's service or product with either the balance being paid or the product/service being fulfilled at a later date. Also see Deposit

Presentment - charge
A presentment - charge is a direct debit transaction analogous to a credit card purchase. This transaction transfers money from a customer's Bank account to a Merchant account.

Processor
A Clearing House that receives transaction requests from the acquiring Bank.

Prohibited Merchant
A Merchant who trades in products/services that appear in the prohibited Merchant list of the Acquiring Bank

PSP
Payment Service Provider

Purchase
An acquiring Bank card transaction that both authorizes and settles a card payment for goods or services.

Purchase price
Means the price payable by the cardholder to the Merchant for approved product(s) rendered by the Merchant to the cardholder.

Q.

R.

RDFI
Receiving Depository Financial Institution. A financial institution that provides depository account services to consumers, employees, and businesses and accepts electronic debits and credits to and from those accounts.

Reason code
A code used by the acquiring Bank transaction processing engine to indicate the type of credit that was applied to a settlement

Refund
See credit

Representment
A Representment is a direct debit transaction. A Representment transaction occurs as a response to a direct debit return (i.e., the return transaction is reversed), and transfers money from the customer's Bank account to the Merchant account.

Reserve
Means a security reserve of Merchant funds established and held by the acquiring Bank in an account in the name of the acquiring Bank at a Bank or financial institution acceptable to the acquiring Bank for the sole purpose of enabling the acquiring Bank to recover any and all liabilities of the Merchant to the acquiring Bank when in the exclusive opinion of the acquiring Bank due settlement will not be sufficient to cover such liabilities whether present, future, actual or contingent.

Response code
As part of its response to failed or declined transactions, the acquiring Bank includes a response code. The response code, with its accompanying text, indicates the reason a transaction was declined or failed, which in many cases helps the Merchant to rectify the error and to avoid it with future transactions.

Restricted Merchant
A Merchant who trades in products/services that appear in the restricted Merchants list of the Acquiring Bank, which is maintained by the acquiring Bank payment's risk management department with assistance from the legal department.

Retrieval request/Request for Information (RFI)/First request
This is a request by a Bank for a copy of an original sales draft (or an electronic summary for CNP transactions) for a transaction that is being disputed by a customer. Failure to respond in a timely fashion to a retrieval request may result in a chargeback. Retrieval requests are sometimes referred to as first requests or Requests for Information.

Return
For Direct Debits, a return is a presentment - charge that has failed, e.g., due to insufficient funds in the customer's Bank account.

Return code
Return codes are the codes used by the ACH system for identifying the reasons a check or payment is returned. These codes are generated by customers' Banks to return items. Examples of typical return codes include r01 (insufficient funds) and r10 (customer advises not authorized).

Reversal
A reversal is a transaction that reverses a previously occurring return. It is usually at the request of the Merchant or due to a technical error on the initial sale.

Risk monitoring
Means the risk monitoring system provided by the acquiring Bank to the Merchant, which may include but is not limited to:

• Identifying deposit history not in normal (in the opinion of the acquiring Bank) parameters; and
• Review of transactions identified as high risk by Card Schemes; and
• Reporting regularly to the Merchant on the above.

Rolling reserve
The acquiring Bank withholds a rolling reserve for each Merchant account. The rolling reserve is typically held for 180 days after the purchase. It is withheld in order to cover any potential chargeback or return. At the end of 180 days from the purchase, any amount remaining in the reserve is repaid to the Merchant on a rolling basis.

Routing number
For US. Merchant accounts, the routing number is the unique 9-digit identification number for the Bank associated with a direct debit transaction.

S.

Sale
Means an act resulting in a sale attempt by a cardholder to render payment to the Merchant initiated by a purchase of approved product(s) from the Merchant effected by a cardholder using a card with the intention of the cardholder incurring a liability to the Merchant and is understood to be the generic term for payments by domestic and international credit, debit, smart, cash, and charge cards; representing the exact purchase price.

Seasonal trade/Merchant
A Merchant who does not operate their business in all months/seasons of the year. An example would be a Merchant selling Fireworks who is mainly active at times of religious or national festivals.

Security
An up-front deposit of funds requested by an Acquiring Bank as security against their Exposure.

Settlement
An acquiring Bank card transaction that settles the funds previously authorized on a customer's credit card. The authorization verifies that the funds are available on the credit card and reserves them. The settlement actually transfers the funds from the consumer's credit card and into the Merchant's account. Means the amount due to the Merchant, expressed in the Merchant's settlement currency resulting from transactions less any amount set off by the acquiring Bank or the acquiring Bank in accordance with this agreement or the Merchant's retailer agreement with the acquiring Bank.

Settlement account
A separate account maintained by the Merchant at a Bank or financial institution acceptable to the acquiring Bank solely in order to facilitate settlement.

Settlement currency
Means the currency in which the acquiring Bank pays due settlement to the Merchant.

Settlement fee
Means a charge to cover the acquiring Bank's (and/or its agents) costs for making the settlement.

SIC
Standard Industrial Classification code. A business classification method that has been replaced the MCC. The SIC is a code assigned by an Acquirer to a Merchant to identify the Merchant's principal trade, profession, or line of business. It may be included as a transaction parameter for certain transaction types (e.g. MOTO).

Skimming
Copying the magnetic stripe details of a plastic card with a card reader, for use in counterfeiting.

Sort code
For UK Merchant Bank accounts, the sort code is the unique 6-digit identification number for the Bank or building society branch.

Split sale
An instance in which a Merchant has processed two or more transactions that in total exceed their floor limit in order to avoid having to obtain a single authorization for the combined total.

Submission
Means a summary of cardholder and other data in relation to sales and refunds provided by the Merchant to the acquiring Bank in an acceptable (to the acquiring Bank) form for the purposes of the service.

Switch
A MasterCard-owned international debit card brand. MasterCard is migrating the switch brand over to maestro debit card brand.

T.
 
Tel
Telephone-initiated entry. A one-time direct debit transaction initiated in accordance with a consumer's verbal authorization, usually for the purchase of goods and services via telephone.

Third-party guarantee
Indemnification of the acquiring Bank by a separate legal entity to the Merchant for any/all of the Merchant's liabilities under their Merchant agreement.

Transaction
Means an act by which a sale creates a liability either from the cardholder to the Merchant or vise versa.

Transaction currency
Means the currency in which a transaction is made.

Transaction data
Means details of sales and refunds in a form acceptable to the acquiring Bank.

Transaction ID
Transaction Identification number - the number that the acquiring Bank transaction Processor assigns to a transaction request. The transaction id is unique for each transaction and can be used to track the transaction throughout its lifecycle.

Transaction receipt
Means an electronic record of a transaction evidencing a sale or refund.

Transit number
For Canadian Merchant accounts, the transit number is the unique 5-digit identification number specifying the branch of the Bank associated with a direct debit transaction. For direct debit transactions, this is contained within the institution id

U.

V.

Value date
The value date is the date associated with a payment; i.e., the date the receiving party will receive the funds in their account.

Verified by Visa
The Visa brand name for their service that uses the 3D-secure standard.

Virtual terminal
A virtual terminal is a tool used to manually process individual transactions for a Merchant account in a card Not Present environment.

Visa
Means Visa USA. Inc. (a Delaware corporation).

Visa Debit
A debit Card Scheme enabling cardholders to make payments to participating Merchants in the scheme (typically at retailers' point-of-sale terminals).

Visa delta
A European-based visa debit card, accepted by 18 million Merchants worldwide.

Visa electron
A European-based visa card that can be used both as a credit and a debit card.

W.

Warranty
See guarantee

Wire
A wire is a payment method to transfer funds between Bank accounts, usually same-day. Wires can be made to any country and in any currency, and generally incur fees. Compare with EFT.

X.