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GLOSSARY OF COMMON ELECTRONIC PAYMENT TERMS

Address Verification System (AVS) – Checks to see Electronic Funds Transfer (EFT) - The transfer that billing address given by customer matches credit of money initiated through an electronic terminal, card address. automated teller machine, computer, telephone, or magnetic tape. EFT also applies to credit card and Automatic Check Handling (ACH) – Can also mean automated bill payments. Automatic Clearinghouse, a form of electronic payment designed to be an electronic check. Electronic Data Capture (EDC) – To use a Point of Sale (POS) terminal for submitting credit card Batch - A collection of credit card transactions that transaction information to a merchant account provider. saved for submitting at the end of the business day. Sending the batch is called a batch close. Gateway – passes data between networks having similar functions but different implementations. Also Chargeback – A credit card transaction billed see payment gateway. back to the merchant after the sale has been settled. Chargebacks are initiated by the card issuer on behalf Holdback – Also referred to as a reserve. This is a fee of the cardholder. Typical disputes involve product held back from a merchant’s credit card transactions delivery failure or dissatisfaction. Cardholders are to cover any possible charge backs, and other disputed urged to try to obtain satisfaction from the merchant charges that a merchant may encounter. Usually, after a before disputing the bill with the credit card issuer. time, the hold backs are returned to the merchant.

Card Verification Value (CVV2) – Three-digit security Interchange Fee – A fee set by and collected by the number that is printed on the back of most Visa credit bankcard association from the merchant financial cards. Requiring this number on order checkouts can institution and paid to the issuing financial institution to reduce credit card fraud. CVC2 is the numeric security cover processing and float expenses incurred in billing code that is printed on the back of MasterCard credit the cardholder. cards. MAP (Merchant Account Provider) – Either a bank or DBA – Doing Business As. This is the common/ other institution that will host a merchant account and recognized name of the school. It may be the same as process credit card transactions. the Merchant’s (school’s) Legal Name (see Merchant Application Form). Merchant Account – An account that is established by a merchant to receive payment via credit cards. DDA – Direct Deposit Account. Merchant Defined Field(s) – a custom, merchant Discount rate – A fee that the major credit cards (school) defined field that is passed to the payment charge for handling a transaction. gateway - Network Merchants, Authorize.net, PayFlow Pro/Paypal, etc. – that the school can use for tagging Electronic Data Interchange (EDI) - The electronic or informational purposes. Network Merchants allows communication of business transactions, such as for 20 MDFs to be passed; others are limited to just two orders, confirmations and invoices. and are very restrictive in how used.

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Merchant Identification Number (MID) – A number Point of Sale terminal (POS) – Device used by retail provided by a merchant bank to identify the merchant businesses to process credit card transactions. If the in an e-commerce transaction. customer is present, they swipe or slide their credit card through the machine. Merchant Category Code (MCC) – is a four-digit number assigned to a business by MasterCard or Secure Socket Layer (SSL) – Used to encrypt data VISA when the business first starts accepting one of usually on an order from an online merchant’s web site. these cards as a form of payment. Used to classify the Once order has reached destination, the encrypted business by the type of goods or services it provides. data is decoded.

Merchant Service Provider (MSP) – This is a bank SIC Code – A number used to specify what industry a or other firm that provides processing for credit card particular company belongs to. The Standard Industrial transactions. Most MSP’s provide merchant accounts. Classification (SIC) code system was replaced by the North American Industry Classification System (NAICS) Merchant Account Provider (MAP) – Either a bank or in 1997. other institution that will host a merchant account and process credit card transactions. Transaction fee – A fee charged by a merchant account provider for each credit card transaction MID (Merchant Identification Number) – A number completed. provided by a merchant bank to identify the merchant in an e-commerce transaction. Virtual Terminal – Web browser-based access to a merchant services site for authorizing and entering Non-Qualified Transaction Fees – Sales transactions credit card purchases. Instead of a physical terminal that do not meet set MasterCard and Visa criteria for that can read the magnetic stripe on the card, the that particular merchant and are processed at a higher account information has to be manually typed in; interchange rate. however, it enables access at login from any online computer. Payment Gateway – an e-commerce application service provider service that authorizes payments for e-businesses (schools). It is the equivalent of a physical point of sale terminal located in most retail outlets. Payment gateway protects credit card detail by encrypting sensitive information to ensure that information passes securely between the customer and the merchant.

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