Acquiring Bank/ Acquirer: A type of bank which provides clients with the ability to process card payments (and other electronic payments). An acquiring banks works with a payment processor to provide merchant accounts.
Annual Fee: A yearly fee charged by merchant services providers.
Application Fee: One off fee charged by merchant services providers for underwriting, approval and setup of a merchant account.
Authorisation: An authorisation request is made by the merchant to charge the cardholder. The authorisation request must be settled for payment to be made. An authorisation code identifies a transaction.
Biometric Payments: Payments made where cardholders details verified using fingerprint identification.
Card Associations: A network of banks that process payment cards of a specific brand eg. Visa or Mastercard.
Card Not Present (CNP) Transactions: Where the cardholder and card are not present when the transaction is made eg. mail order, telephone order, online.
Card Security Code (CSC): The 3 digit number on the back of the card. Used to help authenticate the card for card not present transactions.
Chargeback: Process where funds which have been paid to a merchant are taken back because a transaction is disputed or improper. Typically initiated by the card provider at the request of the customer. The merchant will invariably pay a fee for a chargeback.
Chip and PIN: The technology used to make payments using a chip and PIN payment card. A computer chip on the card holds the customer information and payment is made using the PIN (personal identification number). Also refereed to as EMV.
Contactless Payments: Card payment made using a contactless enabled payment card and contactless payment terminal. The card is waved near the terminal and payment is made without a PIN.
Debit Card: A bank card used to buy good and services that is linked directly with the customers bank account.
EMV: Stands for Europay, Mastercard and Visa. The global standard for chip and PIN payment cards.
Independent Sales Organisation (ISO): A third party agent selling the services of acquiring banks and payment processors ie. merchant accounts to merchants.
Interchange: The process by which all banking parties involved in a credit or debit card transaction manage the processing, clearing, and settlement of the transaction. Including assessment, collection, and distribution of fees between parties.
Interchange Fee: A fee paid by an acquiring bank to an issuing bank for transactions entered into interchange. Ultimately the fee is paid by the merchant. There are many different classifications of intercharge fee and each transaction is assessed individually so a merchant may pay many different rates of intercharge fees for their transactions.
Internet Merchant Account: A merchant account which allows merchants to accept payments online via a payment gateway.
Issuing Bank/ Issuer: Any bank that offers debit or credit cards to its customers.
Merchant Account: A commercial account that allows merchants to accept card payments and other types of electronic payment.
Merchant Agreement: A written agreement between the merchant and merchant services provider.
Merchant Services Provider: Provide merchant services. Includes: acquirers, payment processors, ISOs and banks.
Mobile Chip and PIN Machine: A chip and PIN machine that works with a mobile device eg. smartphone and app to make payments via the mobile device.
Mobile Payments: Payments made face-to-face using a mobile phone. The phone is waved near a payment terminal and payment is made. NFC technology used to make payment.
Near Field Communication (NFC): Technology used to make contactless and mobile payments. Based on a magnetic field card details can be read from short range using NFC.
Nonqualified: Transaction that holds more risk to the issuing bank. May include transactions where card details are entered manually or where the transaction is not settled in a timely manner. Certain card types may hold more risk eg. certain types of credit or debit card, reward cards and corporate cards.
Payment Gateway: Computer interface that allows secure payment processing online. The payment gateway encrypts card details.
Payment Processor: A data centre that processes transactions.
PCI DSS (Payment Card Industry Data Security Standard): Global security standard designed to protect customer card data.
PDQ Machine: A card payment terminal. PDQ stands for Process Data Quickly, the term refers to all types of payment terminal.
Point of Sale (POS): Place where the transaction takes place where a customer is making a purchase face-to-face. A POS terminal facilitates the transaction.
Retrieval Request: A request by the cardholder or their bank for documentation regarding a transaction. Can lead to a chargeback.
Secure Sockets Layer (SSL): An encryption system that allows merchants to process transactions securely online. A website with SSL has a https:// in the URL.
Skimming: Criminal activity whereby a card machine, ATM or part of the system is compromised and card details are obtained by the criminals.
Transaction Fee: A fee charged per transaction to the merchant. Part of the intercharge fee.