PAYMENTS DICTIONARY Terms worth knowing 1 Table of contents Terms to put on your radar Terms to put on your radar ..............................3 Card not present (CNP) Card acceptance terms ....................................4 Transaction in which merchant honors the account number associated with a card account and does not see or swipe Chargeback terms ..........................................7 a physical card or obtain the account holder’s signature. International payment terms ...........................8 Customer lifetime value Prediction of the net profit attributed to the Fraud & security terms ....................................9 entire future relationship with a customer. Integrated payment technology terms ............ 12 Omnicommerce Retailing strategy concentrated on a seamless consumer Mobile payment terms ................................... 13 experience through all available shopping channels. Payment types .............................................. 15 Payments intelligence The ability to better know and understand Payment processing terms ............................. 18 customers through data and information uncovered from the way they choose to pay. Regulatory & financial terms .......................... 23 Transaction terms ......................................... 25 Index ........................................................... 27 References ................................................... 31 2 3 Card acceptance terms Acceptance marks Credit card number Merchant bank Sub-merchant Signifies which payment brands are accepted at a Unique number assigned to a credit card account. Bank that has an agreement with a merchant to accept A merchant that, pursuant to an agreement merchant location; provides the cardholder with (acquire) deposits generated by card transactions. with a payment facilitator, is authorized to information on where his or her card can be used. Discover accept cards when properly presented. Major credit card, issued primarily in the US; most cards with Merchant category code (MCC) Account holder the Discover brand are issued by Discover Bank; payment A code designating the principal trade, profession, or line of Third-party presenter agreement Person to whom a credit and/or debit account is issued or transactions are processed through the Discover Network. business in which a merchant is engaged. The MCC is used Separate agreement between an acquirer and a who is authorized by such person to use the account. by American Express, Discover, Mastercard, and Visa. presenter authorizing the presenter to act as an Expiration date agent of a merchant; presenter agrees to comply Account issuer The date embossed on a credit or debit card Merchant identification number (MID) with the applicable terms of this agreement. Bank that offers card brand (Visa, Mastercard, beyond which it becomes invalid. A unique number assigned to a merchant account to identify etc.) payment cards directly to consumers. it through the course of payment processing activities. Third-party processor “Honor All Cards” rule Entity that contracts with a member to provide processing Account number A network brand acceptance rule, which requires Payment facilitator services such as authorization clearing and settlement services. The unique identifier (typically a number) that merchants that accept one of a major card network’s A merchant registered by an acquirer to facilitate an account issuer, as part of providing a credit or cards to accept all of the network’s cards regardless transactions on behalf of sub-merchants. Third-party settlement debit account, issues to an account holder. of card issuer or specific card program. Service where payment is made to a third party Payment gateway according to instructions from a merchant as described American Express Master Merchant Facilitates the transfer of information between a payment by a separate, three-way agreement between the Multinational financial services corporation best known for Payment facilitator that becomes the “Merchant of Record” portal and the front-end processor or acquiring bank. merchant, the third party, and the processor. its credit card, charge card, and Travelers Cheques business. on behalf of a network of smaller merchants (sub-merchants) or billing companies that regularly collect payments; key Payment processor Visa Association markets for Master Merchant networks include government, Company appointed by merchants to handle card An American multinational financial services corporation Group of card-issuing banks or organizations that set common education, utilities, and nonprofit organizations. transactions for merchant acquiring banks. facilitating electronic funds transfers throughout the transaction terms for merchants, issuers, and acquirers. world, most commonly through Visa-branded credit, Mastercard Payment system debit, and prepaid cards; Visa-branded payments Card acceptor business code American multinational financial services corporation; its An operational network governed by laws, rules, and products are processed on VisaNet, the world’s largest A four-digit numerical representation of the type of principal business is to process payments between the banks standards that links bank accounts and provides the retail electronic payments processing network. business in which the card acceptor (merchant) engages. of merchants and the card-issuing banks or credit unions of the functionality for monetary exchange using bank deposits. purchasers who use Mastercard debit, credit, and prepaid cards Card brands to make purchases; a publicly traded company since 2006. Primary account number (PAN) Member-based corporations that connect consumers, The number that is embossed and/or encoded on a plastic businesses, and banks to transact through electronic Merchant card that identifies the issuer and the cardholder account. payments instead of cash and check; also establish and A commercial entity or person authorized to accept enforce rules amongst members and promote the brands cards and access devices when properly presented; an Recurring services merchant (popular card brands include Visa and Mastercard). organization that uses credit cards to receive payments from A merchant that provides services of an ongoing its customers pursuant to agreement with card brands. nature to a cardholder (club membership, magazine Card issuer subscription, etc.) and uses recurring transactions Any association member financial institution, bank, Merchant agreement to bill the cardholder for these services. credit union, or company that issues (or causes A written agreement between a merchant and a bank that to be issued) plastic cards to cardholders. contains their respective rights, duties, and warranties with Standard industrial classification (SIC) respect to acceptance of payment cards and matters related to A system for classifying industries by a four-digit code; Cardholder card activity. historically used by the IRS and the banking industry. Person or entity that receives an account from a card company or issuer. 4 5 Chargeback terms International payment terms Acceptance marks Credit card number Bank identification code (BIC) Interchange Fee Regulation (IFR) Signifies which payment brands are accepted at a Unique number assigned to a credit card account. Similar to a routing number in the US, a BIC uniquely Also known as the EC MIF Regulation, IFR refers merchant location; provides the cardholder with identifies financial institutions globally. Mainly to the regulation of the European Parliament and information on where his or her card can be used. Discover used when transferring money between banks (e.g., of the Council on multilateral interchange fees Major credit card, issued primarily in the US; most cards with SEPA payments). Also known as SWIFT code. (MIFs) for card-based payment transactions. Account holder the Discover brand are issued by Discover Bank; payment Person to whom a credit and/or debit account is issued or transactions are processed through the Discover Network. Cross-border fees Local acquiring who is authorized by such person to use the account. Fees associated with cross-border transactions. The ability to acquire in country/region in which acquiring Expiration date and issuing banks reside. Generally drives higher approvals Account issuer The date embossed on a credit or debit card Cross-border transaction and lower issuer and network assessment fees. Bank that offers card brand (Visa, Mastercard, beyond which it becomes invalid. A transaction for which the country/region of etc.) payment cards directly to consumers. the payment card’s issuing bank and that of the Local entity “Honor All Cards” rule merchant’s acquiring bank are different. An organization or business that has a legal and separately Account number A network brand acceptance rule, which requires identifiable existence within a given jurisdiction. The unique identifier (typically a number) that merchants that accept one of a major card network’s Domicile an account issuer, as part of providing a credit or cards to accept all of the network’s cards regardless See local entity. Purchase currency debit account, issues to an account holder. of card issuer or specific card program. The currency in which an issuer bills a Dynamic currency conversion cardholder for transactions. American Express Master Merchant Conversion of the purchase price of goods or services from Multinational financial services corporation best known for Payment facilitator that becomes the