Payments Dictionary

205 Words Worth Knowing Table of Contents

4 Terms to Put on Your Radar ...... 3

32 Card Acceptance Terms...... 4

11 Chargeback Terms ...... 6

7 Currency Terms...... 7

22 Fraud & Security Terms...... 8

10 Mobile Payment Terms ...... 10

29 Payment Types...... 11

48 Payment Processing Terms...... 13

20 Regulatory & Financial Terms...... 16

22 Transaction Terms ...... 18

2 4 Terms to Put on Your Radar 32 Card Acceptance Terms

Acceptance Marks Card Issuer Card-Not-Present (CNP) Signifies which payment brands are accepted at Any association member financial institution, bank, a merchant location; provides the cardholder with credit union, or company that issues (or causes to Transaction in which a merchant honors the account number associated with a information on where his or her card can be used be issued) plastic cards to cardholders card account and does not see or swipe a physical card or obtain the account Account Holder Cardholder holder’s signature Person to whom a credit and/or debit account is Person or entity that receives an account from a issued or who is authorized by such person to use card company or issuer the account Credit Card Number Customer Lifetime Value Account Issuer Unique number assigned to a credit card account Prediction of the net profit attributed to the entire future relationship Bank that offers card brand (Visa®, MasterCard®, etc .) payment cards directly to consumers Discover® with a customer Major credit card, issued primarily in the United Account Number States; most cards with the Discover brand are The unique identifier (typically a number) that an issued by Discover Bank; payment transactions are Omnicommerce account issuer, as part of providing a credit or debit processed through the Discover Network account, issues to an account holder Retailing strategy concentrated on a seamless consumer experience Expiration Date American Express® through all available shopping channels The date embossed on a credit or debit card beyond Multinational financial services corporation best which it becomes invalid known for its credit card, charge card, and Travelers Cheques business “Honor All Cards” Rule Payments Intelligence Requires merchants that accept one of a major card Association network’s cards accept all of the network’s cards The ability to better know and understand customers through data and Group of card-issuing banks or organizations that regardless of card issuer or specific card program information uncovered from the way they choose to pay set common transaction terms for merchants, issuers, and acquirers Master Merchant Payment Facilitator that becomes the “Merchant of Card Acceptor Business Code Record” on behalf of a network of smaller merchants A 4-digit numerical representation of the type of (sub-merchants) or billing companies that regularly business in which the card acceptor (merchant) collect payments; key markets for Master Merchant engages networks include government, education, utilities, and non-profits Card Brands Member-based corporations that connect consumers, businesses, and banks to transact through electronic payments instead of cash and check; also establish and enforce rules amongst members and promote the brands (popular card brands include Visa and MasterCard)

3 4 MasterCard Primary Account Number (PAN) American multinational financial services The number that is embossed and/or encoded corporation; its principal business is to process on a plastic card that identifies the issuer and the payments between the banks of merchants and cardholder account the card issuing banks or credit unions of the purchasers who use MasterCard debit, credit, and Recurring Services Merchant prepaid cards to make purchases; a publicly traded A merchant that provides services of an ongoing 11 Chargeback Terms company since 2006 nature to a cardholder (club membership, magazine subscription, etc ). and uses recurring transactions Merchant to bill the cardholder for these services A commercial entity or person authorized to accept cards and access devices when properly Standard Industry Code (SIC) Arbitration Chargeback Period presented; an organization that uses credit cards The means by which Visa identifies merchants A process where the card brand determines The number of calendar days from the endorsement to receive payments from its customers pursuant according to type of processing, authorization, and financial liability between members for interchange date of a transaction receipt (or processing date, to agreement with card brands settlement; MasterCard uses Merchant Category transactions that are presented and charged back as applicable) during which time the issuer may Codes (MCC) exercise a chargeback right Merchant Agreement Arbitration Committee Sub-Merchant A written agreement between a merchant and a Committee that resolves disputes between Chargeback Reduction Service bank that contains their respective rights, duties, A merchant that, pursuant to an agreement with a members that arise from chargebacks Service that screens presentments and and warranties with respect to acceptance of Payment Facilitator, is authorized to accept cards chargebacks; returns certain invalid items to the payment cards and matters related to card activity when properly presented Chargeback acquirer or issuer, as appropriate Forcible return of funds to a customer by the Merchant Bank Third Party Presenter Agreement issuing bank of the instrument used by a consumer Direct Arbitration Bank that has an agreement with a merchant Separate agreement between an acquirer and a to settle a debt; reversal of a prior outbound A process whereby the card brand assigns financial to accept (acquire) deposits generated by card presenter authorizing the presenter to act as an transfer of funds from a consumer’s bank account, liability for a transaction when either the chargeback transactions agent of a merchant; presenter agrees to comply line of credit, or credit card reduction service rejects a presentment because with the applicable terms of this agreement it cannot verify authorization or the acquirer claims Merchant Category Code (MCC) Chargeback Adjudication Services that the rejected transaction was authorized Means by which MasterCard identifies a merchant Third Party Processor Where processor i) receives chargebacks; ii) according to type of processing, authorization, Entity that contracts with a member to provide displays them to merchant via its online user Presentment and settlement; Visa identifies merchants using processing services such as authorization clearing interface; iii) counsels merchant, when needed, A clearing record that an acquirer presents Standard Industry Codes (SIC) and settlement services about regulations, information requirements, and to an issuer through interchange, either initially appropriate responses; iv) collects the relevant (a first presentment) or after a chargeback Payment Facilitator Third Party Settlement information from processor’s files and, if necessary, (a re-presentment) A merchant registered by an acquirer to facilitate Service where payment is made to a third party from merchant and other sources; v) forwards transactions on behalf of sub-merchants according to instructions from a merchant as properly formatted re-presentment data to the Re-Presentment described by a separate, three-way agreement initiator for disputed chargebacks; vii) acts as Payment Gateway Process by which a merchant can dispute a between the merchant, the third party, and the liaison between merchant and the initiator for any chargeback with an issuing bank; allows merchant Facilitates the transfer of information between a processor subsequent dispute resolution procedures such to present evidence to prove the chargeback is not payment portal and the front-end processor or as arbitration; vi) transfers chargeback liability warranted acquiring bank Visa from merchant back to the initiator for disputed An American multinational financial services chargebacks resolved in merchant’s favor (a Reversed Chargeback Payment Processor corporation facilitating electronic funds transfers “reversed chargeback”) Chargeback that a processor resolves in the Company appointed by merchants to handle card throughout the world, most commonly through merchant’s favor by transferring the chargeback transactions for merchant acquiring banks Visa-branded credit, debit, and prepaid cards; Chargeback Advice liability back to the account issuer Visa branded payments products are processed A form that notifies the issuer that a chargeback Payment System on VisaNet, the world’s largest retail electronic has passed certain validations and has been An operational network governed by laws, rules, payments processing network forwarded to the acquirer and standards that links bank accounts and provides the functionality for monetary exchange using bank deposits

5 6 7 Currency Terms 22 Fraud & Security Terms

Billing Currency 3-D Secure Card Verification Value 2 The currency in which an issuer bills a cardholder for XML-based protocol designed as an additional Three-digit security number that is printed on the transactions security layer for online credit and debit card back of most Visa cards; security feature designed transactions; initially developed by Visa, the to deter fraud for card transactions Cross-Border Fees protocol has been adopted by MasterCard, Fees associated with cross-border transactions American Express, and other card brands Check Verification Process that screens checks and check writers Domicile Address Verification Service (AVS) against a “negative database” at the point-of-sale The region where a merchant is located The process of validating a cardholder’s given (POS) when the customer presents a check as address against the issuer’s records to determine payment Dynamic Currency Conversion accuracy and deter fraud; a code is returned with Data Breach Conversion of the purchase price of goods or the authorization result that indicates the accuracy services from one currency to another, as agreed of the address match Unintentional release of secure information to an to by the cardholder and merchant; that currency untrusted environment Authentication becomes the transaction currency, regardless of the merchant’s local currency The process of assuring that data has come from Duplicate Checking its claimed source, or a process of corroborating the The policy and procedures that prevent identical Foreign Currency claimed identity of a communicating party sales records from being processed A currency other than local currency Card Identification Digits (CID) EMV Local Payments Card security feature on Discover and American Stands for Europay, MasterCard, and Visa; global Payment types that are offered in a specific Express cards designed to deter fraud for card standard for inter-operation of integrated circuit cards geographic location (most commonly within a transactions (chip cards) and integrated circuit card capable point- region or country) that are not accepted outside of of-sale terminals and ATMs, for authenticating credit Card Security Code that region; for example, Interac® is a local payment and debit card transactions type specific to Canada, iDEAL is local to the Security feature designed to deter fraud for card Netherlands transactions

Multi-Currency Card Verification Code 2 Did You Know? The merchant’s ability to offer goods and services Numeric security code printed on the back of We were the first US acquirer to complete to cardholders in different currencies MasterCard cards designed to deter fraud for card transactions MasterCard and Visa requirements to process EMV transactions . Card Verification Value A unique check value encoded on the magnetic stripe of a card to validate card information during the authorization process; calculated from the data encoded on the magnetic stripe using a secure cryptographic process

7 8 Encryption Velocity Checks The process of encoding personal information for The number of times an account number is secure transmission across the internet processed over a predetermined amount of time; rejects multiple transactions against the same End-To-End Encryption (E2EE) credit card during a specified time to help prevent Uninterrupted protection of the confidentiality and double clicking by cardholder, fraud, and internal integrity of transmitted data by encoding it at its merchant processing issues 10 Mobile Payment Terms starting point and decoding it at its destination Virtual Account Number Friendly Fraud An alias for a card number, generated through When a consumer makes a purchase with their own either a web application or a specialized client Contactless Payments Mobile Payments Acceptance credit card and then issues a chargeback through program, that interacts with the card issuer’s the card provider (after receiving the goods or computer and is linked to the actual card number; Devices that use radio-frequency identification Ability for merchants to accept payments via services) to cancel the transaction and refund the typically has a limit and an expiration date between for making secure payments; embedded chip and a mobile device in a face-to-face transaction money two and twelve months from the use date chosen antenna enable consumers to wave a device over a environment by the account owner; the user’s real card number reader at the point-of-sale MasterCard Secure Code is never revealed to the merchant Mobile Wallet Dongle Version of 3-D Secure, an online authentication An electronic account dominated in a currency and process used to decrease online fraud and increase Provides electronic copy protection and content held on a mobile phone that can be used to store consumer confidence protection which, when attached to a computer or and transfer value other electronic appliance (such as a mobile phone), PCI DSS (Payment Card Industry Data unlocks software functionality or decodes content; Near Field Communication (NFC) Security Standard) commonly used with mobile phones to accept Set of standards for smartphones and similar Set of requirements designed to ensure all payments devices to establish radio communication with each companies that process, store, and/or transmit other by touching them together or bringing them In-App Payments card information maintain a secure environment into proximity (usually no more than a few inches) The ability to sell digital content in mobile PIN (Personal Identification Number) applications Quick Response (QR) Code A sequence of digits used to verify the identity of Matrix barcode readable by QR scanners, mobile Merchant Customer Exchange (MCX) the holder of a token; a type of password phones with a camera, and smartphones; can be Company created by a collaboration of leading US used to make mobile payments Tokenization retail companies looking to offer a new platform for Replacement of sensitive data with a unique smartphone-based transactions identifier that cannot be reversed mathematically; Mobile Commerce commonly used in payments to replace card data Business that is conducted on the internet with Truncation cell phones or other wireless, handheld electronic When only some digits of a customer’s card devices number appear on a sales draft or receipt to Mobile Payment provide better security while still enabling identification (for the cardholder) of the card Payment services operated under financial used; it’s required by federal law (since 2006) that regulation and performed from or via a mobile no more than the last five digits of a card may be device in a face-to-face transaction environment shown on a receipt

9 10 eCheck Prepaid Credit Card Electronic version of a paper check, used to A type of secured credit card that is tied to conduct transactions over the internet a previously deposited cash balance, where purchases are checked for approval against Gift Card existing funds; essentially a stored-value card that Type of stored-value payment card commonly usually carries major card brand logos 29 Payment Types issued by retailers and banks Reward Card Offline Debit A credit card carrying an incentive or “reward” for MasterCard or Visa card that is linked to a use, typically involving cash back, merchandise consumer checking or savings account; transaction points, or frequent flier points Affinity Card Chip Card is processed in the same manner as any other A card offered by two organizations, one a card A card with an embedded EMV-compliant chip MasterCard or Visa card Secured Credit Card issuer and the other a non-financial group such containing memory and interactive capabilities Credit cards that require collateral (such as a as a university, sports franchise, or nonprofit used to identify and store additional data about a Online Debit house, car, or deposit of money) for approval; organization; cardholders typically receive special cardholder, the cardholder’s account, or both Card account tied to a consumer’s checking or generally designed for people with no credit or discounts or deals for using their cards issued in savings account; transaction is processed in a poor credit who are trying to build or rebuild their Closed Loop Gift Card partnership with a major bank single online message and a PIN is required for credit history Prepaid gift card only accepted by the merchant authentication; clearing and settlement happens Alternative Payments who issued the card simultaneously Smart Card Payment methods that are used as a substitute Plastic card containing a computer chip with to traditional card payment; these third party Co-Branded Card Open Loop Gift Card memory capabilities; may be used for identification payment brands use the traditional payment A co-branded card is sponsored by both the issuing Prepaid gift card issued by banks or credit or to store information, financial amounts, or other systems of Visa, MasterCard, ACH, etc . for bank and a retail organization, such as a department card companies; can be redeemed at different forms of data; also called an integrated circuit card settlement of transactions and are typically used store or an airline; cardholders may get benefits establishments or a chip card in an eCommerce environment from the sponsoring merchant, such as discounts or free merchandise, based on account usage and Payment Card Stored-Value Card Bill Me Later® terms Financial tools that allow customers to make Credit card-sized device implanted with a A proprietary payment method that offers purchases without having cash-on-hand; includes computer chip that contains stored money value; Commercial Card consumers a line of revolving credit through credit, charge, debit, and prepaid cards a reloadable stored-value card can be reused by WebBank; allows purchases to be made online General name for cards typically issued for business transferring a dollar value to it from an automated without using a credit card use; may include corporate, purchase, business, Payment Type teller machine or other device; however, a travel, and entertainment cards disposable card cannot be reloaded Biometric Payment Method of payment that a merchant, either now or in the future, honors from account holders as Corporate Card Wire Transfer The identification of humans by their characteristics payment for their purchases; payment types may or traits; in payments, a point-of-sale technology Credit card typically issued to corporate executives include, but are not limited to, credit, debit, or Method of electronic funds transfers from one that uses biometric authentication to identify the or business owners to keep business expenses prepaid cards person or institution to another; funds typically user and authorize the payment separate from personal charges transfer on the same bank day the wire transfer is PayPal® initiated Bitcoin Credit Card Payment processing service that allows payments A decentralized digital currency A plastic payment card that is accepted by and money transfers to be made through the merchants and can be read at the point-of-sale with internet, via a mobile device, and in-store Charge Card an encoded magnetic stripe on the back; offers card A type of payment card; charges to these cards members the ability to pay balances over time by Peer-to-Peer Payment must be paid in full each month that a statement is applying an interest rate to outstanding balances Online technology that allows customers to issued transfer funds from their bank account or credit Debit Card card to another individual’s account via the internet Check Guarantee Plastic payment card that provides the cardholder or a mobile phone Program in which the merchant is guaranteed electronic access to his or her bank account at a payment on a check; fee is charged to the merchant financial institution; payments using a debit card in exchange for the service of paying the merchant are immediately transferred from the cardholder’s on any checks that are returned designated bank account

11 12 Discount Rate Interchange System Fee paid by merchants to credit card processors The computer hardware and software operated by associated with accepting general-use credit cards and on behalf of the card brands for the routing, (like Visa, MasterCard, etc .); all applicable fees processing, and settlement of transactions are bundled into a single percentage rate which typically includes interchange, assessments, and Issuer 48 Payment Processing Terms processor fees Any association member financial institution, bank, credit union, or company that issues (or causes to Downgrade Fees be issued) plastic cards to cardholders Surcharges added to the discount rate of the total processing fee for each transaction; can be Level I Data Account Updater Automated Account Updater assessed on a merchant for reasons including type Information provided by the card brands for all Card brand product, available through a payment Visa and MasterCard product, available through a of card used, the bank that issued it, and how the purchases; includes account number, transaction processor, that provides updated account numbers, payment processor, that automatically provides transaction was entered date, purchase amount, supplier, category code, expiration dates, account status, and cardholder updated account numbers, expiration dates, supplier name, city, state, and ZIP code contact information to merchants account status, and cardholder contact information Enhanced Data to merchants Transaction-level data required for select Level II Data Acquirer interchange programs, card products, or merchant Data provided by the card brands along with Level Automated Clearing House (ACH) Bank or financial institution that processes credit categories; examples include airline itinerary data, I data on some purchases; includes customer code, and/or debit card payments for a merchant A system of the US Federal Reserve Bank that fuel transaction data, and itemized purchase data sales tax amount, sales tax indicator, purchase ID, provides electronic funds transfer (EFT) between and purchase ID format Assessments banks; used for transfer of funds transactions, Fines Fees paid directly to the card brand networks to including direct deposit of paychecks and monthly Fees levied by the card brands on merchants for Match File offset the brands’ costs to operate and regulate the debits for routine payments to vendors violations of network regulations Database that identifies specific merchants who networks; these fees are passed along in some form have been terminated for cause by other acquirers to the merchant Batch Processing Hard Decline A type of data processing and data communications A decline response on a credit card due to reasons Member Information Processor (MIP) Authorization transmission in which related transactions are including account closed or card stolen MasterCard’s electronic interface for members and Verification of the validity of a credit card and the grouped together and transmitted for processing, processors to facilitate authorizations, clearing, balance allowable on the purchaser’s credit line usually by the same computer and under the same Independent Sales Organization (ISO) and messaging between members application Third-party company that is contracted by a Authorization Codes card member bank to procure new merchant NACHA Billing Descriptor Codes that an issuer or its authorizing processor relationships; also process online card transactions Manages the development, administration, and provides to indicate approval or denial for an Description of the sale or refund transaction that for small businesses, usually in exchange for a fee governance of the ACH Network, the backbone for authorization request appears on the account holder’s account statement or percentage of sales the electronic movement of money and data

Authorization Recycling Clearing Interchange Originating Depository Financial Institution The process of retrying previously failed Process through which a card issuing bank Fee paid between banks for the acceptance of (ODFI) authorization attempts to receive an authorization exchanges transaction information with the card-based transactions; typically a fee that Acts as the interface between the Federal approval merchant acquiring bank the merchant’s bank (acquiring bank) pays to a Reserve or ACH network and the originator of the customer’s bank (issuing bank); fees are set by transaction Authorization Request Deposit the card networks and are usually the largest A merchant’s request for an authorization to The submission of a transaction receipt by a component of the various fees most merchants Partial Authorization accept a cardholder’s sales transaction; can occur merchant or a Payment Facilitator to an acquirer, pay for card acceptance An authorization response sent by an issuer electronically via a credit card processing terminal or resulting in a credit or debit to the merchant’s or approving an amount less than the merchant’s Interchange Rate via telephone as a voice authorization Payment Facilitator’s account requested amount; the merchant must participate Amount paid by acquirers to issuers to in the partial authorization service to be eligible Authorization Response Depository Account compensate for the processing and maintenance The issuer’s reply to an authorization request Account owned by a merchant into which funds due of the transaction and cardholder to the merchant are deposited

13 14 Pass-Through Pricing about the information requirements and appropriate Form of card processing pricing that allows the responses; iv) collects the relevant information from actual cost of processing (interchange, assessment, the merchant, the processor, and other sources; and processor fees) to be passed directly to the v) forwards properly formatted response data to merchant; benefits of this pricing model include the requestor; and vi) acts as a liaison between the transparency and potentially lower costs when merchant and the requestor during the time that such compared to discount rates retrieval request is outstanding 20 Regulatory & Financial Terms

Payment Indicators Reversal Codes returned in authorization responses that Authorization message that reverses a previous specify certain attributes associated with the card authorization by a merchant; can be the full or partial used; may include affluence, prepaid, corporate, and/ amount but cannot exceed the original authorization Bank Identification Number (BIN) Interchange Settlement amount or international The first four to six digits of a card that identifies On 27 November 2012, US District Judge John the institution issuing the card Gleeson entered an order granting preliminary Settlement Processing Fees approval to a proposed settlement of In re Payment Fees charged to a merchant for services agreed upon Buying and selling of transactions among merchants, Credit Limit Card Interchange Fee and Merchant-Discount processors, acquirers, and card-issuing entities; between the merchant and the payment processor The amount established by the issuer that a Antitrust Litigation begins when the merchant submits a transaction to cardholder may carry as a balance Purchased their processor and ends with the transfer of related Know Your Customer (KYC) funds to a depository or liability account Settlement service where an acquirer i) provides Durbin Amendment Due diligence activities that financial institutions and other regulated companies must perform to authorizations; ii) facilitates acquirer settlement Settlement Bank Part of the Dodd Frank Wall Street Reform and transaction purchases; iii) provides chargeback Consumer Protection Act (introduced in 2010) that ascertain relevant information from their clients for Bank that holds liability accounts and executes funds adjudication services on behalf of the merchant; and limits transaction fees imposed upon merchants by the purpose of doing business with them transfers among these and the depository accounts iv) initiates funds transfers debit card issuers Marketplace Fairness Act Soft Billing Descriptors Receiving Depository Financial Institution Federal Trade Commission (FTC) Proposed legislation pending in the US Congress Billing descriptors that change within a reporting Financial institution qualified to receive ACH entries Independent agency of the US federal government that would enable state governments to collect entity; these changes can help clarify the sale or that maintains fair and free competition and sales and use taxes from remote retailers (i e. . online refund transaction description Reconciliation enforces federal antitrust laws; also educates the and catalog retailers) with no physical presence in public about identity theft their state Process by which two entities become in balance: Soft Decline i) merchants reconcile their accounts with their Non-Regulated (Exempt) processor via financial reporting; ii) merchants A decline response on a valid card due to reasons Fiscal Period including the credit card already exceeds the credit balance the number and dollar value of the Accounting period designation by a person or A card issuing bank with assets less than $10 billion line, the issuer is unavailable, etc . transactions they sent to their processor with the corporation that may be a variation from the that is exempt from the limits set forth by the amount that their processor settled into their local calendar equivalent Durbin Amendment Universal Cardholder Authentication Field (UCAF) checking account; iii) payment processor reconciles with the acquiring bank; iv) processor confirms the A standard, global method of collecting cardholder FTC Regulations Regulated (Nonexempt) authentication data at the point of interaction across number and amount of transactions sent to the Rules or guidelines of the FTC (including the Mail A card issuing bank with assets greater than $10 all channels, including the internet and mobile devices; networks with the amount that was settled into or Telephone Order Merchandise Trade Regulation billion; maximum interchange fee an issuer may used to communicate authentication information their account and then distributed to the merchant Rule) that govern the shipment of products and receive for an electronic debit transaction is $0 .21 among cardholders, issuers, merchants, and acquirers accounts charges/refunds related to consumer orders per transaction plus 5 basis points Valid Authorization Reference Number Funds Delivery Date Regulated with Fraud Authorization for the correct amount of a sale and Assigned number to each monetary transaction in a The date that funds are deposited via ACH or wire in An additional $0 .01 adjustment toward an issuer’s obtained within a specified number of days before descriptive billing system; each reference number is a merchant’s designated depository account debit card fee if the issuer develops and implements printed on the monthly statement to aid in retrieval the sale transaction is submitted policies and procedures designed to achieve of the document, should it be questioned by the Funds Transfer fraud-prevention standards; debit with fraud cardholder Voice Authorization ACH transfer of funds between accounts, unless a adjustment is $0 .22 per transaction plus 5 basis An approval response obtained through interactive merchant has specifically requested to have all of its points for regulated transactions under the Durbin Retrieval Request Services communication between an issuer and an acquirer funds transfers delivered by wire Amendment Where a processor: i) receives retrieval requests; or the International Automated Referral Service via ii) displays them to the merchant via its online user telephone, facsimile, or telex communications interface; iii) counsels the merchant, when needed,

15 16 Regulation E Reserve Federal regulation governing all electronic funds Amount in a liability account owned by the transfers acquirer at the settlement bank; it is funded by the merchant and used by the processor, through Regulation Z directions to the settlement bank, to satisfy Under Regulation Z, credit card issuers are required liabilities and any potential losses attributed to the to disclose the terms and conditions to potential merchant 22 Transaction Terms and existing cardholders at the point of account opening and at regular intervals; upon soliciting Rolling Reserve and opening new credit card accounts, credit card Reserve funding method that transfers a specific issuers must generally disclose key information percentage of a fiscal day’s gross purchased sales relevant to the costs of using the card, including into a reserve liability account; after a specified Automatic Bill Payment Imprint the applicable interest rate that will be assessed period of time, the remaining fiscal day’s original An arrangement between a merchant or service An impression of a customer’s card made on the on any outstanding balances and several key fees transfer amount after appropriate adjustments is provider and a customer that allows recurring draft; proves that the card was present when the or other charges that may apply, such as the fee automatically reversed by a transfer from a liability automatic charges for a service to an agreed-upon sale was made; imprint can be created electronically for making a late payment; in addition, issuers account to the then-current fiscal day’s daily card account by using a magnetic stripe-reading terminal that must provide consumers with an initial disclosure proceeds as a reserve surplus includes the correct point-of-sale (POS) entry code statement, which is usually a component of the Card Reader issuer’s cardholder agreement, before the first Truth in Lending (TILA) A device that is capable of reading the encoding on Imprint Machine transaction is made with a card US federal law designed to ensure more accurate plastic cards A manual credit card impression machine that disclosure of credit terms so that consumers can: creates multiple receipts by sliding a handle to Regulations i) compare the various credit terms available in the Cross-Border Transaction record the raised numbers on the front of a card Rules, applicable law, operating procedures, credit marketplace; ii) avoid the uninformed use of A transaction that originates via a point-of- onto carbon paper copies etc ., that govern the operations of merchants, credit; iii) protect themselves against inaccurate interaction terminal located in a different country processors, acquirers, account issuers, and and unfair credit billing and credit card practices; from the country where the card was issued Installment Transaction account holders with respect to a payment type; regulation that implements TILA’s requirements is The single purchase of goods or services billed to an determined by the related acquirer, FTC, or other Regulation Z, which is administered by the Federal Deferred Billing account in multiple segments over a period of time relevant administrative or governmental body Reserve A transaction completed in a card-not-present agreed to between a cardholder and a merchant environment for which the cardholder is billed once no more than 90 days after the first shipment of Magnetic Stripe merchandise A stripe of magnetic information affixed to the back of a plastic card; contains customer and account eCommerce Transaction information that is required to complete electronic Transaction between a merchant and a cardholder financial transactions over the internet and other networks using a cardholder access device Mail Order/Telephone Order Transaction (MO/TO) Electronic Funds Transfer Transaction where a cardholder orders goods or Any transfer of funds that is initiated through services from a merchant by telephone, mail, or an electronic terminal, telephone, computer, other means of telecommunications; neither the or magnetic tape for the purpose of ordering, card nor the cardholder is present at the merchant instructing, or authorizing a financial institution to debit or credit a consumer’s account Online Bill Presentment and Payment Process that allows consumers to receive, view, and pay certain bills online by transferring money from their checking accounts or charging bills to their credit card

17 18 Point-of-Interaction (POI) Sale A hardware and/or software component in point- Transaction of products or services made by a of-sale equipment (e .g . a magnetic stripe reader) merchant to a customer that is facilitated by the that enables a card purchase at a retailer (can be use of a supported payment type; a sale relating attended or unattended); the new generation of to the shipment of goods does not occur until POI systems allows devices other than credit cards the product is shipped to the account holder; the to make payments (i .e . mobile phones) merchant is solely responsible for the accuracy of the information presented for processing Point-of-Sale (POS) Location in a merchant establishment at which Sale Date the sale is consummated by payment for goods or The date that: i) goods are shipped for a sale that vantiv c. om services received requires the shipment of goods, or ii) the card account holder expects to be charged based Receipt on the terms of a service sale; an installment or A hard copy document that records when a recurring payment occurs on a sale date (after transaction took place at the point-of-sale; the an interval of time from a prior sale date) where receipt contains a description of the transaction, the interval is understood and agreed to by the which usually includes the date, the merchant account holder name/location, a portion of the primary account number, the amount, and the reference number Sales Draft A paper record that evidences the purchase of Recurring Transaction goods or services by a cardholder Charge to the cardholder (with prior permission) on a periodic basis for goods and services (health club Transaction memberships, book-of-the-month clubs, etc .) Submission to a processor seeking payment under a supported payment type Refund The creation of a credit to a cardholder account, usually due to a product return or to correct an error

Remote Transaction A non-face-to-face transaction performed partially or wholly by means of electronic communication (phone, internet, text messaging, facsimile, etc .)

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19 Chargeback ...... 6 Domicile ...... 7

Chargeback Adjudication Services...... 6 Dongle...... 10

Chargeback Advice ...... 6 Downgrade Fees...... 14 Index Chargeback Period...... 6 Duplicate Checking ...... 8 Chargeback Reduction Service...... 6 Durbin Amendment...... 16

Check Guarantee ...... 11 Dynamic Currency Conversion...... 7 3-D Secure...... 8 Automated Clearing House (ACH)...... 13 Check Verification...... 8 ______E A Automatic Bill Payment...... 18 ______Chip Card ...... 11 eCheck ...... 12 B Acceptance Marks...... 4 ______Clearing...... 13 eCommerce Transaction...... 18

Account Holder...... 4 Bank Identification Number (BIN)...... 16 Closed Loop Gift Card...... 11 Electronic Funds Transfer...... 18

Account Issuer ...... 4 Batch Processing ...... 13 Co-Branded Card...... 11 EMV...... 8

Account Number...... 4 Bill Me Later ...... 11 Commercial Card...... 11 Encryption...... 9

Account Updater ...... 13 Billing Currency...... 7 Contactless Payments ...... 10 End-to-End Encryption (E2EE) ...... 9

Acquirer...... 13 Billing Descriptor...... 13 Corporate Card...... 11 Enhanced Data ...... 14

Address Verification Service (AVS)...... 8 Biometric Payment...... 11 Credit Card...... 11 Expiration Date...... 4 Affinity Card...... 11 Bitcoin...... 11 Credit Card Number...... 4 ______F Alternative Payments ...... 11 C Credit Limit...... 16 ______Federal Trade Commission (FTC)...... 16 American Express ...... 4 Cross-Border Fees...... 7 Card Acceptor Business Code ...... 4 Fines...... 14 Arbitration ...... 6 Cross-Border Transaction...... 18 Card Brands...... 4 Fiscal Period ...... 16 Arbitration Committee ...... 6 Card Identification Digits (CID)...... 8 Customer Lifetime Value...... 3 Foreign Currency ...... 7 Assessments...... 13 Card Issuer...... 4 D ______Friendly Fraud...... 9 Association ...... 4 Card Reader...... 18 Data Breach...... 8 FTC Regulations...... 16 Authentication...... 8 Card Security Code ...... 8 Debit Card ...... 11 Funds Delivery Date ...... 16 Authorization...... 13 Card Verification Code .2 ...... 8 Deferred Billing...... 18 Funds Transfer ...... 16 Authorization Codes...... 13 Card Verification Value ...... 8 Deposit...... 13 ______G Authorization Recycling ...... 13 Card Verification Value .2 ...... 8 Depository Account...... 13 Gift Card ...... 12 Authorization Request ...... 13 Cardholder...... 4 Direct Arbitration...... 6 ______H Authorization Response...... 13 Card-Not-Present (CNP) ...... 3 Discount Rate...... 14 Hard Decline ...... 14 Automated Account Updater...... 13 Charge Card...... 11 Discover ...... 4 “Honor All Cards” Rule ...... 4

21 22 ______I Merchant Bank ...... 5 Payment Type...... 12 Re-Presentment...... 6

Imprint...... 18 Merchant Category Code (MCC)...... 5 Payments Intelligence...... 3 Reserve...... 17

Imprint Machine...... 18 Merchant Customer Exchange (MCX)...... 10 PayPal ...... 12 Retrieval Request Services ...... 15

In-App Payments...... 10 Mobile Commerce...... 10 PCI DSS...... 9 Reversal...... 15

Independent Sales Organization (ISO)...... 14 Mobile Payment ...... 10 Peer-to-Peer Payment ...... 12 Reversed Chargeback...... 6

Installment Transaction...... 18 Mobile Payments Acceptance...... 10 PIN...... 9 Reward Card...... 12

Interchange ...... 14 Mobile Wallet...... 10 Point-of-Interaction (POI)...... 19 Rolling Reserve...... 17

Interchange Rate...... 14 Multi-Currency...... 7 Point-of-Sale (POS)...... 19 ______S

Interchange Settlement ...... 16 ______N Prepaid Credit Card...... 12 Sale ...... 19

Interchange System...... 14 NACHA...... 14 Presentment ...... 6 Sale Date ...... 19

Issuer...... 14 Near Field Communication (NFC) ...... 10 Primary Account Number (PAN)...... 5 Sales Draft...... 19 Processing Fees ...... 15 ______K Non-Regulated (Exempt)...... 16 Secured Credit Card...... 12 Purchased...... 15 Know Your Customer (KYC)...... 16 ______O Settlement...... 15 ______Q Settlement Bank...... 15 ______L Offline Debit...... 12 Quick Response (QR) Code...... 10 Smart Card...... 12 Level I Data...... 14 Omnicommerce...... 3 R Soft Billing Descriptors...... 15 Level II Data...... 14 Online Bill Presentment & Payment...... 18 ______Soft Decline ...... 15 Local Payments...... 7 Online Debit...... 12 Receipt...... 19 Open Loop Gift Card...... 12 Receiving Depository Financial Institution . . . .15 Standard Industry Code (SIC)...... 5 ______M Originating Depository Financial Institution Reconciliation ...... 15 Stored-value Card ...... 12 Magnetic Stripe...... 18 (ODFI)...... 14 Recurring Services Merchant...... 5 Sub-merchant...... 5 Mail Order/Telephone Order (MO/TO) P transaction...... 18 ______Recurring Transaction ...... 19 ______T Partial Authorization ...... 14 Marketplace Fairness Act...... 16 Reference Number...... 15 Third Party Presenter Agreement...... 5 Pass-Through Pricing...... 15 Master Merchant...... 4 Refund...... 19 Third Party Processor ...... 5 Payment Card ...... 12 MasterCard...... 5 Regulated (Nonexempt)...... 16 Third Party Settlement...... 5 Payment Facilitator ...... 5 MasterCard Secure Code...... 9 Regulated with Fraud...... 16 Tokenization...... 9 Payment Gateway ...... 5 Match File...... 14 Regulation E...... 17 Transaction...... 19 Payment Indicators ...... 15 Member Information Processor (MIP)...... 14 Regulation Z ...... 17 Truncation...... 9 Payment Processor ...... 5 Merchant...... 5 Regulations ...... 17 Truth in Lending Act (TILA) ...... 17 Payment System...... 5 Merchant Agreement...... 5 Remote Transaction...... 19

23 24 ______U Virtual Account Number...... 9 Universal Cardholder Authentication Field (UCAF) ...... 15 Visa...... 5

______V Voice Authorization...... 15

Valid Authorization...... 15 ______W

Velocity Checks...... 9 Wire Transfer...... 12

References

Chargebacks911 www .chargebacks911 .com

CreditCardProcessing .com www .creditcardprocessing com.

Dictionary com. www .dictionary reference. .com

Investing Answers www .investinganswers .com

MasterCard www .mastercard com.

Merchant Warehouse www .merchantwarehouse .com

Paylosophy www .paylosophy com.

Southland Credit Union www .southlandcu .org

Visa www .visa .com

25 Payments Dictionary

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VEC002 07 .14