GLOSSARY OF TERMS

ABA Routing Number: Also referred to as Transit Routing Number. Routes electronic ACH deposits to the proper banking institution 

ACH: Automated Clearing House. A regional organization used by member banks to electronically transfer funds between members.

ACH Network: A central distribution and settlement point for electronic items exchanged among depository financial institutions.

AMEX: Abbreviation for American Express, an organization that issues travel and entertainment cards and acquires transactions.

AVS: See address verification.

Acquirer: A licensed member of MasterCard and/or VISA (or its agent) which maintains merchant relationships, and receives all bankcard transactions from the merchant, and initiates data into the interchange system.

Acquiring Bank/Merchant Bank: A bank that does business with merchants enabling them to accept credit cards. A merchant has an account with this bank and each day deposits the value of the day's credit card sales. Acquirers (acquire) the merchant's sales slips and credit the tickets' value to the merchant's account.

Address Verification (AVS): A service provided through merchant services in which the merchant verifies the cardholder's address. Primarily used by mail/telephone order merchants to combat fraud. However, does not a guarantee that a transaction is valid.

Affinity Card: A credit card issued in conjunction with an organization or collective group; for example, profession, alumni, retired persons association. The card issuer often pays the organization a royalty.

Arbitration: The procedure used to determine responsibility for a chargeback-related dispute between two members.

Assessments: Fees paid quarterly by members to VISA and MasterCard to support marketing and operating activities.

Association: An organization owned by members, which services and obtains processing services for members and functions as a principal/proprietary member of VISA or MasterCard.

Authorization: The act of ensuring the cardholder has adequate funds available against his or her line of credit. A positive authorization results in an authorization code being generated, and those funds being set aside. The cardholder's available credit limit is reduced by the authorized amount.

Auto Representment: Chargebacks (credit not issued, transaction not authorized, etc.) that were automatically resolved by processor on the merchant's behalf without their knowledge or intervention.

Available Credit: The difference between a cardholder's credit limit and the present balance on the account, including outstanding transactions not yet received through interchange.

Average Ticket: The average size of a merchant bankcard transaction. Generally used in pricing decisions and calculations.

Bank Identification Number (BIN): A unique series of numbers assigned by MasterCard or VISA to a principal member institution that identifies the member in transaction processing. It is the first three to six digits of a standard cardholder account number and can be used by the member's affiliates, if necessary.

Bank Routing Number: The first nine digits that appear across the bottom of a personal check; they identify the financial institution.

Bankcard: A financial transaction card (credit, debit, etc.) issued by a financial institution.

Bankcard Association: A group of institutions formed for sponsoring a bankcard program, using a common processing and administrative center.

Bankwire Transfer: Transfer of funds to any bank within the Federal Reserve System.

Base I: The VISANet data processing systems, networks, and operations that provide authorization and authorization-related services to VISA members.

Base II: The VISANet data processing systems, networks, and operations that provide clearing, settlement, and other interchange-related services to VISA members.

Batch: The accumulation of captured (sale) transactions waiting to be settled. Multiple batches may be settled throughout the day.

Batch Header Ticket: The identifying form used by the electronic submission merchant to indicate a batch of sales/credit slips.

Batch Processing: A type of data processing and data communications transmission in which related transactions are grouped together and transmitted for processing, usually by the same computer and under the same application.

Baud: The number of electrical symbols per second that a modem sends down a phone line.

Bill Payment Service Provider (BPSP): A financial institution or non-financial entity acting as an intermediary between the biller and consumer for the exchange of electronic bill payment information.

Bill Service Provider (BSP): An agent of the biller that provides an electronic bill presentment and payment service for the biller.

Biller: A company or organization that sends a bill or statement to a consumer, usually requesting payment for a product or service.

Browser: Short for 'Web Browser,' the tool (program) that allows users to surf the Web. The most popular Web browsers are Netscape Navigator and Microsoft Internet Explorer.

Bulletin Board System (BBS): An electronic message system that you dial up directly on your computer to read and post messages or pull off files.

Business Card: A bankcard issued to companies for use by company employees.

CTMF: Combined Terminated Merchant File.

Call Center: A functional area within an organization or an outsourced, separate facility that exists solely to answer inbound or place outbound telephone calls. Usually refers to a sophisticated voice operations center that provides a full range of high-volume, inbound or outbound call-handling services, including customer support, operator services, directory assistance, multilingual customer support, credit services, card services, inbound and outbound telemarketing, interactive voice response and web-based services.

Cancellation Number: A number provided by a hotel/motel to verify a cardholder's notification to cancel a guaranteed reservation or advance resort deposit.

Capture: Converting the authorization amount into a billable transaction record within a batch. Transactions cannot be captured unless previously authorized and the goods or services have been shipped or transmitted to the consumer.

Capture Date: The date on which a transaction is processed by an acquirer.

Card Issuer: 1) The financial institution or retailer that authorizes the issuance of a card to a consumer (or another organization), and is liable for the use of the card. The issuer retains full authority over the use of the card by the person to whom the card is issued. 2) Any bank or organization that issues, or causes to be issued, bankcards to those who apply for them. 3) Any organization that uses or issues a personal identification number (PIN).

Card Verification Code (CVC): A unique value calculated from the data encoded on the magnetic stripe of a MasterCard card, validating card information during the authorization process.

Card Verification Value (CVV): A unique value calculated from the data encoded on the magnetic stripe of a VISA card, validating card information during the authorization process.

Cardholder: The person to whom a financial transaction card is issued or an additional person authorized to use the card.

Cardholder Bank: The bank that has issued a bankcard to an individual.

Cash Advance: An amount advanced by a bank teller (or ATM) to a bankcard holder against the cardholder's line of credit.

Chain: A series of merchant locations which are owned by the same entity.

Charge Per Transaction: A fee charged on any authorized transaction to cover costs usually associated with delivery of the authorization and interchange fees.

Chargeback: A transaction that is challenged by a cardholder or card issuing bank and is sent back through interchange to the merchant bank for resolution.

Chargeback Period: The number of calendar days from the time of authorization during which the issuer has the right to charge the transaction back to the acquirer. The number of days varies according to the type of transaction from 30 to 180 days.

Chargeback Reason Code: A numerical code which identifies the specific reasons for the chargeback. VISA and MasterCard each have their own chargeback codes.

Chargeback Reference Number: A 10-digit number assigned to every chargeback, unique for each individual chargeback. The first four digits of the chargeback reference number are the issuer's identification (BIN/ICA) number.

Check Card: A bankcard that enables the user to purchase goods and services and obtain cash disbursements against his or her asset account most often a checking account. The check card is also called an 'offline debit card' or 'deposit access card.'

Check Guarantee: A service provided by a third party vendor who guarantees a customer's payment by check for a specified amount. Stipulations require that the merchant follow correct authorization procedures.

Check Verification: A service provided in which a merchant accesses a national negative file database through their terminal/register to verify or authorize the person has no outstanding bad check complaints at any of the member merchants. This is not a guarantee of payment to the merchant.

Chip Card: See Smart Card.

Clearing: The process of exchanging financial transaction details between an acquirer and an issuer to facilitate posting of a cardholder's account and reconciliation of a customer's settlement position.

Clearing Account: An account at the clearing bank that will receive a member's credit or debit for net settlement.

Clearing Bank: A bank designated by the member to receive the member's daily net settlement advisement. The clearing bank will also conduct funds transfer activities with the net settlement bank and maintain the member's clearing account. This bank may be the member itself.

Co-Branded Card: A credit card issued jointly by a member bank and a merchant that bears the 'brand' of both.

Compliance: The procedure a VISA or MasterCard member may use to resolve a dispute between members when no chargeback reason code applies. The challenging member must prove financial loss due to a violation of MasterCard and/or VISA rules by the other member.

Convenience User: A cardholder who pays the balance in full on each payment due date.

Cookie: A small chunk of information, stored on your computer by a Web site you have visited, that's used to remind that site about you the next time you visit it.

Corporate Card: A bankcard issued to companies for use by company employees.

Counterfeit Card: A plastic card which has been fraudulently printed, embossed, or encoded to appear to be a genuine bankcard, but which has not been authorized by MasterCard or VISA or issued by a member. A card originally issued by a member but subsequently altered without the issuer's knowledge or consent.

Credit Card: A plastic card with a credit limit used to purchase goods and services and to obtain cash advances on credit for which a cardholder is subsequently billed by the issuer for repayment of the credit extended.

Credit Deposit: The value of a merchant's credit card purchases that are credited to its bank account after the acquiring bank buys the merchant's sales slips. The deposit is credited but is not funded until the acquiring bank gets the monetary value from the issuer during settlement. Also referred to as Deposit Credit.

Credit Limit: The maximum amount the cardholder may owe to the issuer on the card account at any time.

Credit Loss: The amount lost (charged off) as a result of failure of the cardholder to repay the amount owed on the account.

Credit Scoring: A method for predicting the credit worthiness of applicants for credit.

Credit Transaction: A claim for funds by a cardholder for credit against his or her account. At the same time, it provides details of funds acknowledged as payable by the acquirer, the card acceptor, or both, to the card issuer.

Current Risk: The risk exposure presented in the given month projected from the prior month's processing volumes.

Cycle: The grouping of cardholder accounts to provide for a distribution of workload and easier account identification.

Cycle Period: A specific period of time during which both debit and credit transactions are accumulated from billing.

Data Capture (Draft Capture): The collection, formatting, and storage of information in computer memory. Some point-of-sale terminals perform data capture functions.

Data Encryption Standard (DES): A popular standard encryption scheme.

Database: A collection of data organized and designed for easy access i.e., a collection of customer names and addresses.

Debit: A charge to a customer's bankcard account.

Debit Transaction: A bankcard used to purchase goods and services and to obtain cash, which debits the cardholder's personal deposit account.

Demand Deposit Account (DDA): Usually abbreviated as DDA, it refers to the merchant bank account.

Deposit Credit: See Credit Deposit.

Dial-Up Line: A communications medium described as a non-dedicated telephone line, in which a connection is established by dialing a destination number and broken when the call is complete. This is the same type of phone line that you use at home.

Dial-Up Terminal: An authorization terminal that (like a telephone) dials the authorization center for validation of transactions.

Direct Marketing: A transaction category for providing customized services and procedures for merchants which offer merchandise or services via catalogs, telephone calls, mailings, and/or advertisements.

Direct Payment: A method of collection used in the ACH network for certain claims, generally those that are repeated over a period of time, under which the debtor gives the originator a standing authorization to debit his or her account.

Disclosure: The information required by federal or state law to be relayed to the cardholder concerning the terms of the credit agreement. Disclosure must be made by the issuer before the first use of the card by the cardholder, and must subsequently be included on all monthly statements and other documentation mentioning finance charges.

Discount Rate: An amount charged a merchant for processing its daily credit card transactions.

Doing Business As (DBA): Refers to the specific name and location of the merchant establishment where credit card purchases are made.

Domain Name System (DNS): A general-purpose data query service whose principal use is the lookup of host addresses based on host names. Important domains are .com, .edu, .net, .gov, .mil, and .org.

Down Time: A period when all or part of a system or network is not available to end users due to failure or maintenance.

Download: To copy a file from a remote computer 'down' to your computer.

Electronic Banking: A form of banking in which funds are transferred through an exchange of electronic signals between financial institutions, rather than an exchange of cash, checks or other negotiable instruments.

Electronic Bill Delivery: A bill delivery system offered by Visa Interactive that allows banks to send consumers their bills through their personal computers or via telephone lines. This system now allows consumers to transfer funds through their bank to the billing agent itself.

Electronic Bill Payment: An alternative to paper checks for paying bills. Consumers can use PCs, telephones, screen phones or ATMs to send electronic instructions to their bank or bill payment provider to withdraw funds from their accounts and pay merchants. Payments may be made either electronically or by a paper check issued by the bill payment provider.

Electronic Commerce (E-commerce): The transacting of business electronically rather than via paper.

Electronic Data Interchange (EDI): The electronic communication of business transactions; specifically the exchange of trade-related documents, such as purchase orders, invoices and corporate Electronic Funds Transfer (EFTs) in a standard format. With EDI, electronically transmitted data replaces paper documents in the business accounts receivable cycle.

Electronic Draft Capture (EDC) Terminal: Also referred to as Electronic Data Capture terminal. A point-of-sale device that reads information encoded in the bankcard's magnetic stripe, performs authorization functions, stores transaction data, and batches and transmits that data to the acquirer for processing. The stored transactions are used to create settlement files and transaction reports.

Electronic Financial Services (EFS): Financial services that are provided via electronic delivery channels (i.e. PCs, telephones, screen phones and ATMs). These services may be transaction and/or information oriented and may be provided by bank and non-bank providers.

Electronic Funds Transfer (EFT): A transfer of funds between accounts by electronic means rather than conventional paper-based payment methods. EFT is any financial transaction originating from a telephone or electronic terminal, or from a computer or magnetic tape.

Electronic Funds Transfer at the Point of Sale: The technology and practice of making payments for goods and services by means of electronic funds transfer initiated at the point where goods and services are purchased.

Electronic Mail (E-mail): A system where a computer user can exchange messages with other computer via a communications network.

Electronic Point of Sale: A point-of-sale merchant with electronic equipment for pricing and recording transactions, but not necessarily incorporating functions for electronic funds transfer.

Encryption: The technique of scrambling data automatically in the terminal or computer before data is transmitted for security/anti-fraud purposes.

Enveloping: A process whereby documents of the same type or purpose are grouped together, bound, and sent to the same destination into an electronic envelope. This is done by an electronic data interchange management software function.

Expiration Date: The date embossed on a bankcard, beyond which the card becomes invalid.

Extranet: A Web site that links businesses to consumers, suppliers, etc., for electronic commerce. These sites usually provide more consumer-specific information than public sites and may have security devices such as passwords for a user to gain access to more sensitive information.

Facsimile Draft: A paper record that may be provided by an acquirer as a substitute for the sales draft. A substitute document.

Factoring/Laundering: The coercion/bribery of a merchant to process another merchant's transactions (often fraudulent) for payment.

Fiber Optic Cable: A transmission medium composed of small strands of glass, providing a path for light rays that act as a carrier.

File Transfer: The copying of a file from one computer to another over a computer network.

File Transfer Protocol (FTP): A method of transferring files from one computer to another over the Internet.

Financial EDI: Electronic exchange of payments, payment information or financially related documents in standard formats between business partners.

Financial Institution: Any organization in the business of moving, investing, or lending money, dealing in financial instruments, or providing financial services. Includes commercial banks, thrifts, federal and state savings banks, saving and loan associations, and credit unions.

Firewall: A specially programmed computer that connects a local network to the Internet and for security reasons only allows certain types of messages through.

Floor Limit: A dollar amount set by the acquirer in accordance with MasterCard and VISA rules and regulations. The merchant must obtain authorization for any transaction over the floor limit.

Folio: A lodging merchant's guest file that contains the cardholder's transaction information, including check-in and out dates, rate, intended length of stay at check-in time, applicable charges and taxes.

Force / Offline Transaction: The after-the-fact entry of a purchase resulting from a referral ('call Authorization Center') message or a downtime interruption of service from a Network which enables the merchant to enter (as a force/post authorization) the transaction and the approval code into the EDC batch.

Frame Relay: An emerging network access protocol designed to accommodate data applications. It is characterized by four important features: 1.High transmission speeds 2.Low network delay 3.High connectivity 4.Efficient bandwidth use.

Franchise: An organization that grants a license to a group of merchants to market a company's goods or services in a particular territory.

Frequently Asked Questions(FAQ): A term that refers to a list of questions/answers provided by companies relating to software products, Web site, etc.

Fulfillment: The acquirer's response to an issuer's retrieval request for a sales draft. The acquirer supplies the issuer with the original draft or a clear reproduction. The fulfillment record confirms the response and initiates reimbursement to the acquirer for fulfilling the request.

Funding: Refers to the payment to a merchant for his submitted deposits.

Funds Transfer System: A wire transfer network, ACH, or other communication system or clearing house or association of banks in which a Funding Bank is a member and through which a payment order by a bank may be transmitted. Includes: SWIFT, CHIPS, Fedwire, the National Association of Clearing House Associations, MasterCard and VISA.

Gateway: The interconnection between two networks with different communication protocols.

Good Faith: An attempt to resolve a dispute regarding a violation of the Association Bylaws and Rules by written communication, before filing a compliance case.

Gross Deposit: Submitting bankcard sales and credits at the face amount. The acquirer later deducts the discount.

Hard Copy: The original document of a transaction, such as sales drafts, credit slips, etc.

Headquarters / Head Office: The main office of a retail chain through which all communication, supply orders and funding.

Hologram: A laser-created photograph that creates a three-dimensional image; used as an anti-counterfeiting measure on bankcards.

Home Page: The page where a user normally enters a Web site. Also contains the major hotlinks to various features/contents of the site.

Host Computer: The central computer in a data communications system that provides the primary data processing functions, such as computation and database access.

Hot Card: A card account on which excessive use is occurring often an indication that the card (or account number) has been stolen.

Hyperlink: A hypertext connection that can take you to another document or another part of the same document. On the World Wide Web, hyperlinks appear as text or pictures that are highlighted. To follow a hyperlink, click the highlighted material.

Hypertext: A system of writing and displaying text that enables the text to be linked in multiple ways, be available at several levels of detail, and contain links to related documents.

Hypertext Mark-Up Language (HTML): The language used to write pages for the World Wide Web. This language lets the text include codes that define fonts, layout, embedded graphics, and hypertext links.

Hypertext Transfer Porotocol (HTTP): The way in which World Wide Web pages are transferred over the Internet.

Hypertext Transfer Protocol Secured (HTTPS): A variant of HTTP

Imprinter: A device used by merchants to imprint embossed card information onto the sales drafts for bankcard transactions.

Independent Sales Organization (ISO): Also called a member service provider. An outside company (not MasterCard or VISA member) which is contracted by members to administer merchant and/or cardholder servicing.

Integrated Services Digital Network (ISDN): A faster digital phone service that operates at speeds as high as 128 kilobits per second.

Interactive Voice Response (IVR): The process in which the voice processing system prompts the caller for information which can then be used as a search key to a database. The result of the search is subsequently reported back to the caller. A typical and most common application of IVR is in the banking system. A caller calls the bank's IVR lines, enters an account number, and receives information such as account balance, last check cleared, etc.

Interbank Card Association Number (ICA): A four-digit number assigned by MasterCard to a financial institution, third party processor, or other member to identify the member in transactions.

Interchange: The domestic and international systems operated by VISA and MasterCard for authorization, settlement and the passing through of interchange and other fees, as well as other monetary and non-monetary information related to bankcard activities.

Interchange Fee: Fees paid by the acquirer to the issuer to compensate for transaction-related costs. VISA and MasterCard establish interchange fee rates.

Internet: A system by which all the computers in the world talk to each other.

Internet Bill Delivery and Payment (IBDP): An Internet-based service that securely and reliably delivers richly formatted bills, statements, invoices, notices and associated advertising to any online consumer or business, and returns payment, remittance instructions and related information to the biller and/or designated payee.

Internet Check Acceptance: A payment system that allows consumers to enter their checking information on-line; electronic items are created and processed through the Automated Clearing House network.

Internet Service Provider (ISP): A commercial provider of a connection to the Internet, i.e., AOL, CompuServe, Earthlink, etc.

Intranet: A private version of the Internet that lets people within an organization exchange data using popular Internet tools, such as browsers.

Issuer / Issuing Bank: The financial institution (a licensed member of MasterCard or VISA) which holds contractual agreements with and issues cards to cardholders.

Japanese Credit Bureau (JCB): Issuers of the JCB card.

Kiting: A scheme where a merchant submits a sales transaction on his/her personal bankcard account(s) to obtain cash advances through their business.

MCC: See Merchant Category Code.

MICR Number Method: A check authorization procedure that uses the bank routing/transit numbers, checking account numbers and check number encoded along the bottom of the check.

Magnetic Information Character Recognition (MICR): Imprinted banking numbers (routing/transit number, checking account number, check number) at the bottom of the check.

Magnetic Stripe: A stripe (on the bankcard) of magnetically encoded cardholder account information affixed to a plastic card.

Mail Order / Telephone Order (MO/TO): The direct marketing catalog industry.

Media: The documentation of monetary transactions 

Member: A financial institution which is a member of VISA USA and/or MasterCard International. A member is licensed to issue cards to cardholders and/or accept merchant drafts 

Merchant: A retailer, or any other person, firm, or corporation that, according to a Merchant Agreement, agrees to accept credit cards, debit cards, or both, when properly presented.


Merchant Acquirer: A member that has entered into an agreement with a merchant to accept deposits generated by bankcard transactions; also called the acquirer or acquiring bank.

Merchant Agreement: The written contract between merchant and acquirer who detail their respective rights, responsibilities, and warranties.

Merchant Category Code (MCC): Merchant classification code which identifies the merchant by type of processing, authorization and settlement.

Merchant Fraud: The act of submitting sales drafts which are not the result of legitimate sales for the purpose of defrauding the services, the client bank, or individual cardholders. Fraud includes knowingly accepting lost, stolen, or counterfeit credit cards.

Merchant Number: A number that numerically identifies each merchant to the merchant processor for accounting and billing purposes.

Merchant Outlet: The physical premises of the merchant at which a transaction is consummated.

Merchant Plate: A metal embossed plate to be attached to the imprinter machine and used for imprinting sales slips and batch headers/summaries. Embossed data includes merchant name, account number, city, state, and may include service entitlement numbers or checking account number.

Merchant Processing Agreement: The written contractual agreement between a merchant, Global Electronic Technology, Inc. clearing and funding member bank. This agreement contains their respective rights, duties, and warranties with respect to the acceptance of credit, debit, or charge cards and payment system processing.

Merchant Service Charge: The discount rate or other fees assessed by the acquirer.

Merchant Settlement Amount: The net dollar amount for each business day of card transactions processed, less chargebacks debited to the merchants and other debits or credits to the merchants.

Modem: A device that converts serial digital data from a computer to a signal suitable for transmission over a telephone line and then reconverts the signal to serial digital data for the receiving PC.

National Automated Clearing House Association (NACHA): The national association that establishes the standards, rules and procedures that enable depository financial institutions to exchange ACH payments on a national basis.

Negative File: A collection of records (cardholder accounts) containing all accounts on which charge privileges have been revoked and/or require a voice authorization.

Net Payment: Payment to the merchant for sales drafts less credits minus the appropriate discount fee.

Net Revenue: Discount income less interchange expense.

Net Settlement: The settlement, through an actual transfer of funds, of the net effect of a series of financial transactions involving customers of two or more banks.

Network: Computers that are connected together.

Network Service Provider: A terminal-centered system that allows the merchant to obtain authorization and/or data captured through the network. A third party vendor who provides authorization network services such as Banknet, VISANet, and NDC.

Node: The network telecommunication access point which can be accessed by the terminal dialing a 'local' telephone number, or a toll-free '950' or '800' telephone number for authorization.

Non Delivery Risk (NDX): A processed and cleared transaction charged to a cardholder's account for full or partial payment for a product/service in advance of delivery/receipt of the product/service to the cardholder.

Non Face-to-Face Transaction: Any transaction where the card is not presented, such as a mail order purchase.

Non-Bank: In a payment system, a financial institution not offering retail banking services.

Offline Debit: Debit card transactions using a VISA/MasterCard branded card that looks like a credit card. The transaction must adhere to VISA/MasterCard debit regulations and the merchant is required to pay a discount fee. Cashback is not available.

Offline Transaction: The after-the-fact entry of a purchase resulting from a referral ('call Authorization Center') message or a downtime interruption of service from a Network which enables the merchant to enter (as a force/post authorization) the transaction and the approval code into the EDC batch.

On-Us Entries: Financial institution debit and credit entries to accounts held at the same institution. Such entries are posted internally to the appropriate accounts.

On-Us Transaction: Any electronic banking transaction in which the acquirer and the issuer are the same institution.

Online Debit: Debit card transactions that are instantly debited from the cardholder's bank account. No signature is required. A pin pad is required at the point of sale. Cashback is available and the funds are guaranteed.

Operating Procedures: The current manual prepared by an acquiring processor, containing operational procedures, instructions and other directives relating to card transactions.

Operating Risk: The sum total of cumulative chargeback risk exposure plus the cumulative credit risk exposure with a given merchant.

Operating Rules: Rules and business practices meant to increase consistency and interoperability among the various financial service providers that will interact with each other and end-users. Examples of operating rules include: authorization procedures, settlement timing requirements, audit and accounting rules, and credit limits.

Original Draft: The actual bank copy of the form used in the transaction. Also referred to as the 'hard copy.'

Originator: A financial institution that initiates a wire transfer or automated clearing house (ACH) payment.

PIN: Personal Identification Number. The confidential individual number or code used by a cardholder to authenticate card ownership for ATM or POS terminal transactions.

PIN Authorization Request: A procedure enabling the issuer to validate cardholder identity by comparing the PIN to the account numbers.

POS Terminal: A device placed in a merchant location that is connected to the bank's system or authorization service provider via telephone lines and is designed to authorize, record, and forward data by electronic means for each sale.

Packet: A chunk of information sent over a network. Each packet contains the address that it's going to and the address from which it came.

Paper / Voice: The oldest, yet most familiar bankcard process mode whereby a merchant must call the authorization center for approval of a credit card transaction and then submit their sales slips to Global Electronic Technology, Inc. for processing.

Pass Through: Transactions that are processed by a processor for statement purposes, but are not funded by the processor (i.e., American Express, JCB, Discover).

Payment System: A set of instructions and procedures used for the transfer of ownership and settlement of obligations arising from the exchange of goods and services.

Pick-Up Card: An issuer's response to an authorization request stipulating that the card be confiscated by the merchant and returned to the issuer.

Point of Sale (POS): The location of a merchant where the customer makes a purchase.

Point-of-Sale System: An electronic system that accepts financial data at or near a retail selling countertop and transmits that data to a computer or authorization network for reporting activity, authorization and transaction logging (The machine you slide you r card through).

Port: Generally, port refers to the hardware through which computer data is transmitted; the plugs on the back of computers are ports. On the Internet, port often refers to a particular application. For instance, one might telnet to a particular port on a particular host. The port is actually an application.

Positive File: A file listing the current balance and available credit for each active cardholder account. PIN and other cardholder information may also be included.

Posting: The process of recording debits and credits to the cardholder's credit or deposit account.

Presentment: The process by which the acquirer sends the transaction to the issuer for reimbursement.

Principal Member: A financial institution that directly participates as an issuing and/or acquiring member of MasterCard International.

Private Label: A retailer's proprietary card. Accepted only at that merchant's retail establishments.

Processing Date: The earliest date stamped on the transmittal summary and draft by the member or its processor.

Processor: An organization that is connected to VISANet and or Banknet and provides authorization and/or clearing and settlement services on behalf of a member.

Proprietary Card: A card issued by a financial institution to its customers for access to their credit or deposit accounts.

Purchasing Card: Designed to help companies maintain control of small purchases while reducing the administrative cost associated with authorizing, tracking, paying and reconciling those purchases.

Reason Code: A code used to provide additional information to the receiving clearing member regarding the nature of a chargeback, subsequent presentment, fee collection, funds disbursement, or request for a source document.

Receipt: A hard copy description of the transaction that took place at the point-of-sale, containing at minimum: date, merchant name/location, primary account number, type of account accessed, amount, reference number, and an action code.

Recurring Transaction: A transaction charged to the cardholder (with prior permission) on a periodic basis for recurring goods and services, i.e., health club memberships, book-of-the-month clubs, etc.

Reference Number: A twenty-three (23) position number assigned by the acquiring member and used to identify a transaction.

Referral: The message received from an issuing bank when an attempt for authorization requires a call to the Voice Authorization Center or Voice Response Unit (VRU).

Regional Network: A network which processes debit transactions for financial institutions and retailers in a given geographic area. Regional networks are not part of the national interchange system.

Remittance Information: Information required by the biller to post customer bill payments effectively.

Remittance Processing Service: An electronic routing and settlement service that accepts previously captured and authorized payment transactions from members for delivery to other financial institutions.

Rental Agreement: A detailed contract with the cardholder indicating all charges the cardholder is responsible for.

Representment: A transaction presented to the issuer by the acquirer, when the merchant requests a reversal of a chargeback.

Retention Period: The minimum time the member must retain microfilm or other reproduction of interchange paper and chargeback documentation.

Retrieval Request: A request by the issuer to the acquirer for a copy of the actual ticket of a transaction. The initial step that the issuer takes in the event that either the issuer or the cardholder disputes a transaction.

Sales Draft: Paper documentation of a transaction. Also called a sales slip, charge slip, or hard copy.

Secure Socket Layer (SSL): A Web-based technology that lets one computer verify another's identity and allows secure connections.

Security: The area within Credit/Risk Management tasked with monitoring the performance of the entire active Global Electronic Technology, Inc. portfolio by means of exception reports identifying, investigating and monitoring suspect accounts for fraud-related activities.

Serial Port: The place on the back of your computer where you plug in your modem. Also called a communications port or comm port.

Server: A computer that provides a service to other computers (known as clients) on a network.

Service Entitlement Number: Assigned by and required for processing American Express, Discover, Diners Club, and JCB.

Settlement: As the sales transaction value moves from the merchant to the acquiring bank to the issuer, each party buys and sells the sales ticket. Settlement is what occurs when the acquiring bank and the issuer exchange data or funds during that function.

Settlement Statement: A document issued to the merchant, indicating the sales and credit activity, billing information, discount fee and chargebacks (if any) occurring during a particular time frame (one week, one month).

Shopping Cart Software: Shopping cart software allows the cardholder to select items from an online store and place them in a 'virtual shopping basket' or 'shopping cart.' The GET shopping cart remembers which items are selected while the cardholder views other items within the 'virtual storefront,' keeps a running total, and may calculate taxes and shipping. The items in the shopping cart are eventually ordered if the cardholder chooses.

Smart Card: A plastic card resembling traditional credit or debit cards that contains a computer chip; the chip is capable of storing significantly more information than a magnetic stripe.

Split Dial / Capture: Process which allows the authorization terminal to dial directly to different card processors (e.g. Amex) for authorization and 'Electronic Draft Capture.'

Split Dial Authorization: A process allowing the authorization terminal to dial directly to different card processors (e.g. American Express) for 'authorization.' In this instance, the merchant cannot be both EDC and Split Dial. Split Dial is also utilized for Check Guarantee companies.

Start Up Kit: Supplies shipped to new merchants including sales slips, credit slips, batch header tickets, return envelopes, VISA/MasterCard decals, merchant plastics, imprinter slugs and instructional materials.

Status Change: A non-monetary change such as an account change or update, i.e., new merchant address.

Stored-Value Card (gift/ loyalty card): A pre-paid payment card that stores a monetary value from which the purchase amount is deducted from the card each time the card is used.

Submission: The process of sending batch deposits to Merchant Services for processing. This may be done electronically or by mail.

Support Documentation: The forms necessary to effect a chargeback processing cycle, and any additional material to uphold a dispute.

Suspect Transaction: A transaction that occurs one day prior to or following the account number being listed in the combined Risk Bulletin.

Switch: An electronic mechanism that routes transaction data from a point-of-sale terminal to the authorizing data processor for approval of the card-issuing institution.

T&E CARD: Travel and Entertainment card issued by a private, non-bank company which deals directly with the cardholder and merchant and which generally requires payment in full monthly.

T&E MERCHANT: An airline, car-rental company, lodging, or restaurant establishment whose primary function is to provide travel/entertainment-related services.

TCP/IP: The system networks use to communicate with each other on the Internet. It stands for Transmission Control Protocol/Internet Protocol.

Telephone Bill Payment: A service that permits a customer to pay bills electronically. The customer gives a corporation the authority to debit his or her account for a specific amount or within a specified range of amounts.

Terminal Based: A system that captures card transactions and holds them until settlement.

Terminated Merchant File (TMF): A file listing the names of merchants and their principals whose bankcard relationships have been terminated for some reason by an acquirer. Operated jointly by VISA and MasterCard.

Third-Party Processing: Processing of transactions by service providers acting under contract to card issuers or acquirers.

Ticket: Another name for the sales slip or its 'monetary value' that results when a credit card purchase is made.

Transaction: Any event that causes a change in an organization's financial position or net worth, resulting from normal activity. Advance of funds, purchase of goods at a retailer or when a borrower activates a revolving line of credit. Activities affecting a deposit account carried out at the request of the account owner. One example of a transaction is the process that takes place when a cardholder makes a purchase with a credit card.

Transaction Date: The actual date on which a transaction occurs. Used in recording and tracking transactions.

Transaction Fees: Service costs charged to a merchant on a per-transaction basis.

Valid Date: The date embossed by the card issuer on the credit card. An establishment cannot accept a card for payment of goods or services prior to this date.

Visanet: The data processing systems, networks, and operations used to support and deliver authorization services, exception file services, and clearing and settlement services.

Voice Response Unit (VRU): An automated authorization support system for touch-tone telephones.

Wide Area Network (WAN): A network using common carrier provided lines (in contrast to LAN).

World Wide Web (WWW): A hypermedia system that lets you browse through an unlimited amount of interesting information

GLOSSARY OF TERMS

ABA Routing Number: Also referred to as Transit Routing Number. Routes electronic ACH deposits to the proper banking institution 

ACH: Automated Clearing House. A regional organization used by member banks to electronically transfer funds between members.

ACH Network: A central distribution and settlement point for electronic items exchanged among depository financial institutions.

AMEX: Abbreviation for American Express, an organization that issues travel and entertainment cards and acquires transactions.

AVS: See address verification.

Acquirer: A licensed member of MasterCard and/or VISA (or its agent) which maintains merchant relationships, and receives all bankcard transactions from the merchant, and initiates data into the interchange system.

Acquiring Bank/Merchant Bank: A bank that does business with merchants enabling them to accept credit cards. A merchant has an account with this bank and each day deposits the value of the day's credit card sales. Acquirers (acquire) the merchant's sales slips and credit the tickets' value to the merchant's account.

Address Verification (AVS): A service provided through merchant services in which the merchant verifies the cardholder's address. Primarily used by mail/telephone order merchants to combat fraud. However, does not a guarantee that a transaction is valid.

Affinity Card: A credit card issued in conjunction with an organization or collective group; for example, profession, alumni, retired persons association. The card issuer often pays the organization a royalty.

Arbitration: The procedure used to determine responsibility for a chargeback-related dispute between two members.

Assessments: Fees paid quarterly by members to VISA and MasterCard to support marketing and operating activities.

Association: An organization owned by members, which services and obtains processing services for members and functions as a principal/proprietary member of VISA or MasterCard.

Authorization: The act of ensuring the cardholder has adequate funds available against his or her line of credit. A positive authorization results in an authorization code being generated, and those funds being set aside. The cardholder's available credit limit is reduced by the authorized amount.

Auto Representment: Chargebacks (credit not issued, transaction not authorized, etc.) that were automatically resolved by processor on the merchant's behalf without their knowledge or intervention.

Available Credit: The difference between a cardholder's credit limit and the present balance on the account, including outstanding transactions not yet received through interchange.

Average Ticket: The average size of a merchant bankcard transaction. Generally used in pricing decisions and calculations.

Bank Identification Number (BIN): A unique series of numbers assigned by MasterCard or VISA to a principal member institution that identifies the member in transaction processing. It is the first three to six digits of a standard cardholder account number and can be used by the member's affiliates, if necessary.

Bank Routing Number: The first nine digits that appear across the bottom of a personal check; they identify the financial institution.

Bankcard: A financial transaction card (credit, debit, etc.) issued by a financial institution.

Bankcard Association: A group of institutions formed for sponsoring a bankcard program, using a common processing and administrative center.

Bankwire Transfer: Transfer of funds to any bank within the Federal Reserve System.

Base I: The VISANet data processing systems, networks, and operations that provide authorization and authorization-related services to VISA members.

Base II: The VISANet data processing systems, networks, and operations that provide clearing, settlement, and other interchange-related services to VISA members.

Batch: The accumulation of captured (sale) transactions waiting to be settled. Multiple batches may be settled throughout the day.

Batch Header Ticket: The identifying form used by the electronic submission merchant to indicate a batch of sales/credit slips.

Batch Processing: A type of data processing and data communications transmission in which related transactions are grouped together and transmitted for processing, usually by the same computer and under the same application.

Baud: The number of electrical symbols per second that a modem sends down a phone line.

Bill Payment Service Provider (BPSP): A financial institution or non-financial entity acting as an intermediary between the biller and consumer for the exchange of electronic bill payment information.

Bill Service Provider (BSP): An agent of the biller that provides an electronic bill presentment and payment service for the biller.

Biller: A company or organization that sends a bill or statement to a consumer, usually requesting payment for a product or service.

Browser: Short for 'Web Browser,' the tool (program) that allows users to surf the Web. The most popular Web browsers are Netscape Navigator and Microsoft Internet Explorer.

Bulletin Board System (BBS): An electronic message system that you dial up directly on your computer to read and post messages or pull off files.

Business Card: A bankcard issued to companies for use by company employees.

CTMF: Combined Terminated Merchant File.

Call Center: A functional area within an organization or an outsourced, separate facility that exists solely to answer inbound or place outbound telephone calls. Usually refers to a sophisticated voice operations center that provides a full range of high-volume, inbound or outbound call-handling services, including customer support, operator services, directory assistance, multilingual customer support, credit services, card services, inbound and outbound telemarketing, interactive voice response and web-based services.

Cancellation Number: A number provided by a hotel/motel to verify a cardholder's notification to cancel a guaranteed reservation or advance resort deposit.

Capture: Converting the authorization amount into a billable transaction record within a batch. Transactions cannot be captured unless previously authorized and the goods or services have been shipped or transmitted to the consumer.

Capture Date: The date on which a transaction is processed by an acquirer.

Card Issuer: 1) The financial institution or retailer that authorizes the issuance of a card to a consumer (or another organization), and is liable for the use of the card. The issuer retains full authority over the use of the card by the person to whom the card is issued. 2) Any bank or organization that issues, or causes to be issued, bankcards to those who apply for them. 3) Any organization that uses or issues a personal identification number (PIN).

Card Verification Code (CVC): A unique value calculated from the data encoded on the magnetic stripe of a MasterCard card, validating card information during the authorization process.

Card Verification Value (CVV): A unique value calculated from the data encoded on the magnetic stripe of a VISA card, validating card information during the authorization process.

Cardholder: The person to whom a financial transaction card is issued or an additional person authorized to use the card.

Cardholder Bank: The bank that has issued a bankcard to an individual.

Cash Advance: An amount advanced by a bank teller (or ATM) to a bankcard holder against the cardholder's line of credit.

Chain: A series of merchant locations which are owned by the same entity.

Charge Per Transaction: A fee charged on any authorized transaction to cover costs usually associated with delivery of the authorization and interchange fees.

Chargeback: A transaction that is challenged by a cardholder or card issuing bank and is sent back through interchange to the merchant bank for resolution.

Chargeback Period: The number of calendar days from the time of authorization during which the issuer has the right to charge the transaction back to the acquirer. The number of days varies according to the type of transaction from 30 to 180 days.

Chargeback Reason Code: A numerical code which identifies the specific reasons for the chargeback. VISA and MasterCard each have their own chargeback codes.

Chargeback Reference Number: A 10-digit number assigned to every chargeback, unique for each individual chargeback. The first four digits of the chargeback reference number are the issuer's identification (BIN/ICA) number.

Check Card: A bankcard that enables the user to purchase goods and services and obtain cash disbursements against his or her asset account most often a checking account. The check card is also called an 'offline debit card' or 'deposit access card.'

Check Guarantee: A service provided by a third party vendor who guarantees a customer's payment by check for a specified amount. Stipulations require that the merchant follow correct authorization procedures.

Check Verification: A service provided in which a merchant accesses a national negative file database through their terminal/register to verify or authorize the person has no outstanding bad check complaints at any of the member merchants. This is not a guarantee of payment to the merchant.

Chip Card: See Smart Card.

Clearing: The process of exchanging financial transaction details between an acquirer and an issuer to facilitate posting of a cardholder's account and reconciliation of a customer's settlement position.

Clearing Account: An account at the clearing bank that will receive a member's credit or debit for net settlement.

Clearing Bank: A bank designated by the member to receive the member's daily net settlement advisement. The clearing bank will also conduct funds transfer activities with the net settlement bank and maintain the member's clearing account. This bank may be the member itself.

Co-Branded Card: A credit card issued jointly by a member bank and a merchant that bears the 'brand' of both.

Compliance: The procedure a VISA or MasterCard member may use to resolve a dispute between members when no chargeback reason code applies. The challenging member must prove financial loss due to a violation of MasterCard and/or VISA rules by the other member.

Convenience User: A cardholder who pays the balance in full on each payment due date.

Cookie: A small chunk of information, stored on your computer by a Web site you have visited, that's used to remind that site about you the next time you visit it.

Corporate Card: A bankcard issued to companies for use by company employees.

Counterfeit Card: A plastic card which has been fraudulently printed, embossed, or encoded to appear to be a genuine bankcard, but which has not been authorized by MasterCard or VISA or issued by a member. A card originally issued by a member but subsequently altered without the issuer's knowledge or consent.

Credit Card: A plastic card with a credit limit used to purchase goods and services and to obtain cash advances on credit for which a cardholder is subsequently billed by the issuer for repayment of the credit extended.

Credit Deposit: The value of a merchant's credit card purchases that are credited to its bank account after the acquiring bank buys the merchant's sales slips. The deposit is credited but is not funded until the acquiring bank gets the monetary value from the issuer during settlement. Also referred to as Deposit Credit.

Credit Limit: The maximum amount the cardholder may owe to the issuer on the card account at any time.

Credit Loss: The amount lost (charged off) as a result of failure of the cardholder to repay the amount owed on the account.

Credit Scoring: A method for predicting the credit worthiness of applicants for credit.

Credit Transaction: A claim for funds by a cardholder for credit against his or her account. At the same time, it provides details of funds acknowledged as payable by the acquirer, the card acceptor, or both, to the card issuer.

Current Risk: The risk exposure presented in the given month projected from the prior month's processing volumes.

Cycle: The grouping of cardholder accounts to provide for a distribution of workload and easier account identification.

Cycle Period: A specific period of time during which both debit and credit transactions are accumulated from billing.

Data Capture (Draft Capture): The collection, formatting, and storage of information in computer memory. Some point-of-sale terminals perform data capture functions.

Data Encryption Standard (DES): A popular standard encryption scheme.

Database: A collection of data organized and designed for easy access i.e., a collection of customer names and addresses.

Debit: A charge to a customer's bankcard account.

Debit Transaction: A bankcard used to purchase goods and services and to obtain cash, which debits the cardholder's personal deposit account.

Demand Deposit Account (DDA): Usually abbreviated as DDA, it refers to the merchant bank account.

Deposit Credit: See Credit Deposit.

Dial-Up Line: A communications medium described as a non-dedicated telephone line, in which a connection is established by dialing a destination number and broken when the call is complete. This is the same type of phone line that you use at home.

Dial-Up Terminal: An authorization terminal that (like a telephone) dials the authorization center for validation of transactions.

Direct Marketing: A transaction category for providing customized services and procedures for merchants which offer merchandise or services via catalogs, telephone calls, mailings, and/or advertisements.

Direct Payment: A method of collection used in the ACH network for certain claims, generally those that are repeated over a period of time, under which the debtor gives the originator a standing authorization to debit his or her account.

Disclosure: The information required by federal or state law to be relayed to the cardholder concerning the terms of the credit agreement. Disclosure must be made by the issuer before the first use of the card by the cardholder, and must subsequently be included on all monthly statements and other documentation mentioning finance charges.

Discount Rate: An amount charged a merchant for processing its daily credit card transactions.

Doing Business As (DBA): Refers to the specific name and location of the merchant establishment where credit card purchases are made.

Domain Name System (DNS): A general-purpose data query service whose principal use is the lookup of host addresses based on host names. Important domains are .com, .edu, .net, .gov, .mil, and .org.

Down Time: A period when all or part of a system or network is not available to end users due to failure or maintenance.

Download: To copy a file from a remote computer 'down' to your computer.

Electronic Banking: A form of banking in which funds are transferred through an exchange of electronic signals between financial institutions, rather than an exchange of cash, checks or other negotiable instruments.

Electronic Bill Delivery: A bill delivery system offered by Visa Interactive that allows banks to send consumers their bills through their personal computers or via telephone lines. This system now allows consumers to transfer funds through their bank to the billing agent itself.

Electronic Bill Payment: An alternative to paper checks for paying bills. Consumers can use PCs, telephones, screen phones or ATMs to send electronic instructions to their bank or bill payment provider to withdraw funds from their accounts and pay merchants. Payments may be made either electronically or by a paper check issued by the bill payment provider.

Electronic Commerce (E-commerce): The transacting of business electronically rather than via paper.

Electronic Data Interchange (EDI): The electronic communication of business transactions; specifically the exchange of trade-related documents, such as purchase orders, invoices and corporate Electronic Funds Transfer (EFTs) in a standard format. With EDI, electronically transmitted data replaces paper documents in the business accounts receivable cycle.

Electronic Draft Capture (EDC) Terminal: Also referred to as Electronic Data Capture terminal. A point-of-sale device that reads information encoded in the bankcard's magnetic stripe, performs authorization functions, stores transaction data, and batches and transmits that data to the acquirer for processing. The stored transactions are used to create settlement files and transaction reports.

Electronic Financial Services (EFS): Financial services that are provided via electronic delivery channels (i.e. PCs, telephones, screen phones and ATMs). These services may be transaction and/or information oriented and may be provided by bank and non-bank providers.

Electronic Funds Transfer (EFT): A transfer of funds between accounts by electronic means rather than conventional paper-based payment methods. EFT is any financial transaction originating from a telephone or electronic terminal, or from a computer or magnetic tape.

Electronic Funds Transfer at the Point of Sale: The technology and practice of making payments for goods and services by means of electronic funds transfer initiated at the point where goods and services are purchased.

Electronic Mail (E-mail): A system where a computer user can exchange messages with other computer via a communications network.

Electronic Point of Sale: A point-of-sale merchant with electronic equipment for pricing and recording transactions, but not necessarily incorporating functions for electronic funds transfer.

Encryption: The technique of scrambling data automatically in the terminal or computer before data is transmitted for security/anti-fraud purposes.

Enveloping: A process whereby documents of the same type or purpose are grouped together, bound, and sent to the same destination into an electronic envelope. This is done by an electronic data interchange management software function.

Expiration Date: The date embossed on a bankcard, beyond which the card becomes invalid.

Extranet: A Web site that links businesses to consumers, suppliers, etc., for electronic commerce. These sites usually provide more consumer-specific information than public sites and may have security devices such as passwords for a user to gain access to more sensitive information.

Facsimile Draft: A paper record that may be provided by an acquirer as a substitute for the sales draft. A substitute document.

Factoring/Laundering: The coercion/bribery of a merchant to process another merchant's transactions (often fraudulent) for payment.

Fiber Optic Cable: A transmission medium composed of small strands of glass, providing a path for light rays that act as a carrier.

File Transfer: The copying of a file from one computer to another over a computer network.

File Transfer Protocol (FTP): A method of transferring files from one computer to another over the Internet.

Financial EDI: Electronic exchange of payments, payment information or financially related documents in standard formats between business partners.

Financial Institution: Any organization in the business of moving, investing, or lending money, dealing in financial instruments, or providing financial services. Includes commercial banks, thrifts, federal and state savings banks, saving and loan associations, and credit unions.

Firewall: A specially programmed computer that connects a local network to the Internet and for security reasons only allows certain types of messages through.

Floor Limit: A dollar amount set by the acquirer in accordance with MasterCard and VISA rules and regulations. The merchant must obtain authorization for any transaction over the floor limit.

Folio: A lodging merchant's guest file that contains the cardholder's transaction information, including check-in and out dates, rate, intended length of stay at check-in time, applicable charges and taxes.

Force / Offline Transaction: The after-the-fact entry of a purchase resulting from a referral ('call Authorization Center') message or a downtime interruption of service from a Network which enables the merchant to enter (as a force/post authorization) the transaction and the approval code into the EDC batch.

Frame Relay: An emerging network access protocol designed to accommodate data applications. It is characterized by four important features: 1.High transmission speeds 2.Low network delay 3.High connectivity 4.Efficient bandwidth use.

Franchise: An organization that grants a license to a group of merchants to market a company's goods or services in a particular territory.

Frequently Asked Questions(FAQ): A term that refers to a list of questions/answers provided by companies relating to software products, Web site, etc.

Fulfillment: The acquirer's response to an issuer's retrieval request for a sales draft. The acquirer supplies the issuer with the original draft or a clear reproduction. The fulfillment record confirms the response and initiates reimbursement to the acquirer for fulfilling the request.

Funding: Refers to the payment to a merchant for his submitted deposits.

Funds Transfer System: A wire transfer network, ACH, or other communication system or clearing house or association of banks in which a Funding Bank is a member and through which a payment order by a bank may be transmitted. Includes: SWIFT, CHIPS, Fedwire, the National Association of Clearing House Associations, MasterCard and VISA.

Gateway: The interconnection between two networks with different communication protocols.

Good Faith: An attempt to resolve a dispute regarding a violation of the Association Bylaws and Rules by written communication, before filing a compliance case.

Gross Deposit: Submitting bankcard sales and credits at the face amount. The acquirer later deducts the discount.

Hard Copy: The original document of a transaction, such as sales drafts, credit slips, etc.

Headquarters / Head Office: The main office of a retail chain through which all communication, supply orders and funding.

Hologram: A laser-created photograph that creates a three-dimensional image; used as an anti-counterfeiting measure on bankcards.

Home Page: The page where a user normally enters a Web site. Also contains the major hotlinks to various features/contents of the site.

Host Computer: The central computer in a data communications system that provides the primary data processing functions, such as computation and database access.

Hot Card: A card account on which excessive use is occurring often an indication that the card (or account number) has been stolen.

Hyperlink: A hypertext connection that can take you to another document or another part of the same document. On the World Wide Web, hyperlinks appear as text or pictures that are highlighted. To follow a hyperlink, click the highlighted material.

Hypertext: A system of writing and displaying text that enables the text to be linked in multiple ways, be available at several levels of detail, and contain links to related documents.

Hypertext Mark-Up Language (HTML): The language used to write pages for the World Wide Web. This language lets the text include codes that define fonts, layout, embedded graphics, and hypertext links.

Hypertext Transfer Porotocol (HTTP): The way in which World Wide Web pages are transferred over the Internet.

Hypertext Transfer Protocol Secured (HTTPS): A variant of HTTP

Imprinter: A device used by merchants to imprint embossed card information onto the sales drafts for bankcard transactions.

Independent Sales Organization (ISO): Also called a member service provider. An outside company (not MasterCard or VISA member) which is contracted by members to administer merchant and/or cardholder servicing.

Integrated Services Digital Network (ISDN): A faster digital phone service that operates at speeds as high as 128 kilobits per second.

Interactive Voice Response (IVR): The process in which the voice processing system prompts the caller for information which can then be used as a search key to a database. The result of the search is subsequently reported back to the caller. A typical and most common application of IVR is in the banking system. A caller calls the bank's IVR lines, enters an account number, and receives information such as account balance, last check cleared, etc.

Interbank Card Association Number (ICA): A four-digit number assigned by MasterCard to a financial institution, third party processor, or other member to identify the member in transactions.

Interchange: The domestic and international systems operated by VISA and MasterCard for authorization, settlement and the passing through of interchange and other fees, as well as other monetary and non-monetary information related to bankcard activities.

Interchange Fee: Fees paid by the acquirer to the issuer to compensate for transaction-related costs. VISA and MasterCard establish interchange fee rates.

Internet: A system by which all the computers in the world talk to each other.

Internet Bill Delivery and Payment (IBDP): An Internet-based service that securely and reliably delivers richly formatted bills, statements, invoices, notices and associated advertising to any online consumer or business, and returns payment, remittance instructions and related information to the biller and/or designated payee.

Internet Check Acceptance: A payment system that allows consumers to enter their checking information on-line; electronic items are created and processed through the Automated Clearing House network.

Internet Service Provider (ISP): A commercial provider of a connection to the Internet, i.e., AOL, CompuServe, Earthlink, etc.

Intranet: A private version of the Internet that lets people within an organization exchange data using popular Internet tools, such as browsers.

Issuer / Issuing Bank: The financial institution (a licensed member of MasterCard or VISA) which holds contractual agreements with and issues cards to cardholders.

Japanese Credit Bureau (JCB): Issuers of the JCB card.

Kiting: A scheme where a merchant submits a sales transaction on his/her personal bankcard account(s) to obtain cash advances through their business.

MCC: See Merchant Category Code.

MICR Number Method: A check authorization procedure that uses the bank routing/transit numbers, checking account numbers and check number encoded along the bottom of the check.

Magnetic Information Character Recognition (MICR): Imprinted banking numbers (routing/transit number, checking account number, check number) at the bottom of the check.

Magnetic Stripe: A stripe (on the bankcard) of magnetically encoded cardholder account information affixed to a plastic card.

Mail Order / Telephone Order (MO/TO): The direct marketing catalog industry.

Media: The documentation of monetary transactions 

Member: A financial institution which is a member of VISA USA and/or MasterCard International. A member is licensed to issue cards to cardholders and/or accept merchant drafts 

Merchant: A retailer, or any other person, firm, or corporation that, according to a Merchant Agreement, agrees to accept credit cards, debit cards, or both, when properly presented.


Merchant Acquirer: A member that has entered into an agreement with a merchant to accept deposits generated by bankcard transactions; also called the acquirer or acquiring bank.

Merchant Agreement: The written contract between merchant and acquirer who detail their respective rights, responsibilities, and warranties.

Merchant Category Code (MCC): Merchant classification code which identifies the merchant by type of processing, authorization and settlement.

Merchant Fraud: The act of submitting sales drafts which are not the result of legitimate sales for the purpose of defrauding the services, the client bank, or individual cardholders. Fraud includes knowingly accepting lost, stolen, or counterfeit credit cards.

Merchant Number: A number that numerically identifies each merchant to the merchant processor for accounting and billing purposes.

Merchant Outlet: The physical premises of the merchant at which a transaction is consummated.

Merchant Plate: A metal embossed plate to be attached to the imprinter machine and used for imprinting sales slips and batch headers/summaries. Embossed data includes merchant name, account number, city, state, and may include service entitlement numbers or checking account number.

Merchant Processing Agreement: The written contractual agreement between a merchant, Global Electronic Technology, Inc. clearing and funding member bank. This agreement contains their respective rights, duties, and warranties with respect to the acceptance of credit, debit, or charge cards and payment system processing.

Merchant Service Charge: The discount rate or other fees assessed by the acquirer.

Merchant Settlement Amount: The net dollar amount for each business day of card transactions processed, less chargebacks debited to the merchants and other debits or credits to the merchants.

Modem: A device that converts serial digital data from a computer to a signal suitable for transmission over a telephone line and then reconverts the signal to serial digital data for the receiving PC.

National Automated Clearing House Association (NACHA): The national association that establishes the standards, rules and procedures that enable depository financial institutions to exchange ACH payments on a national basis.

Negative File: A collection of records (cardholder accounts) containing all accounts on which charge privileges have been revoked and/or require a voice authorization.

Net Payment: Payment to the merchant for sales drafts less credits minus the appropriate discount fee.

Net Revenue: Discount income less interchange expense.

Net Settlement: The settlement, through an actual transfer of funds, of the net effect of a series of financial transactions involving customers of two or more banks.

Network: Computers that are connected together.

Network Service Provider: A terminal-centered system that allows the merchant to obtain authorization and/or data captured through the network. A third party vendor who provides authorization network services such as Banknet, VISANet, and NDC.

Node: The network telecommunication access point which can be accessed by the terminal dialing a 'local' telephone number, or a toll-free '950' or '800' telephone number for authorization.

Non Delivery Risk (NDX): A processed and cleared transaction charged to a cardholder's account for full or partial payment for a product/service in advance of delivery/receipt of the product/service to the cardholder.

Non Face-to-Face Transaction: Any transaction where the card is not presented, such as a mail order purchase.

Non-Bank: In a payment system, a financial institution not offering retail banking services.

Offline Debit: Debit card transactions using a VISA/MasterCard branded card that looks like a credit card. The transaction must adhere to VISA/MasterCard debit regulations and the merchant is required to pay a discount fee. Cashback is not available.

Offline Transaction: The after-the-fact entry of a purchase resulting from a referral ('call Authorization Center') message or a downtime interruption of service from a Network which enables the merchant to enter (as a force/post authorization) the transaction and the approval code into the EDC batch.

On-Us Entries: Financial institution debit and credit entries to accounts held at the same institution. Such entries are posted internally to the appropriate accounts.

On-Us Transaction: Any electronic banking transaction in which the acquirer and the issuer are the same institution.

Online Debit: Debit card transactions that are instantly debited from the cardholder's bank account. No signature is required. A pin pad is required at the point of sale. Cashback is available and the funds are guaranteed.

Operating Procedures: The current manual prepared by an acquiring processor, containing operational procedures, instructions and other directives relating to card transactions.

Operating Risk: The sum total of cumulative chargeback risk exposure plus the cumulative credit risk exposure with a given merchant.

Operating Rules: Rules and business practices meant to increase consistency and interoperability among the various financial service providers that will interact with each other and end-users. Examples of operating rules include: authorization procedures, settlement timing requirements, audit and accounting rules, and credit limits.

Original Draft: The actual bank copy of the form used in the transaction. Also referred to as the 'hard copy.'

Originator: A financial institution that initiates a wire transfer or automated clearing house (ACH) payment.

PIN: Personal Identification Number. The confidential individual number or code used by a cardholder to authenticate card ownership for ATM or POS terminal transactions.

PIN Authorization Request: A procedure enabling the issuer to validate cardholder identity by comparing the PIN to the account numbers.

POS Terminal: A device placed in a merchant location that is connected to the bank's system or authorization service provider via telephone lines and is designed to authorize, record, and forward data by electronic means for each sale.

Packet: A chunk of information sent over a network. Each packet contains the address that it's going to and the address from which it came.

Paper / Voice: The oldest, yet most familiar bankcard process mode whereby a merchant must call the authorization center for approval of a credit card transaction and then submit their sales slips to Global Electronic Technology, Inc. for processing.

Pass Through: Transactions that are processed by a processor for statement purposes, but are not funded by the processor (i.e., American Express, JCB, Discover).

Payment System: A set of instructions and procedures used for the transfer of ownership and settlement of obligations arising from the exchange of goods and services.

Pick-Up Card: An issuer's response to an authorization request stipulating that the card be confiscated by the merchant and returned to the issuer.

Point of Sale (POS): The location of a merchant where the customer makes a purchase.

Point-of-Sale System: An electronic system that accepts financial data at or near a retail selling countertop and transmits that data to a computer or authorization network for reporting activity, authorization and transaction logging (The machine you slide you r card through).

Port: Generally, port refers to the hardware through which computer data is transmitted; the plugs on the back of computers are ports. On the Internet, port often refers to a particular application. For instance, one might telnet to a particular port on a particular host. The port is actually an application.

Positive File: A file listing the current balance and available credit for each active cardholder account. PIN and other cardholder information may also be included.

Posting: The process of recording debits and credits to the cardholder's credit or deposit account.

Presentment: The process by which the acquirer sends the transaction to the issuer for reimbursement.

Principal Member: A financial institution that directly participates as an issuing and/or acquiring member of MasterCard International.

Private Label: A retailer's proprietary card. Accepted only at that merchant's retail establishments.

Processing Date: The earliest date stamped on the transmittal summary and draft by the member or its processor.

Processor: An organization that is connected to VISANet and or Banknet and provides authorization and/or clearing and settlement services on behalf of a member.

Proprietary Card: A card issued by a financial institution to its customers for access to their credit or deposit accounts.

Purchasing Card: Designed to help companies maintain control of small purchases while reducing the administrative cost associated with authorizing, tracking, paying and reconciling those purchases.

Reason Code: A code used to provide additional information to the receiving clearing member regarding the nature of a chargeback, subsequent presentment, fee collection, funds disbursement, or request for a source document.

Receipt: A hard copy description of the transaction that took place at the point-of-sale, containing at minimum: date, merchant name/location, primary account number, type of account accessed, amount, reference number, and an action code.

Recurring Transaction: A transaction charged to the cardholder (with prior permission) on a periodic basis for recurring goods and services, i.e., health club memberships, book-of-the-month clubs, etc.

Reference Number: A twenty-three (23) position number assigned by the acquiring member and used to identify a transaction.

Referral: The message received from an issuing bank when an attempt for authorization requires a call to the Voice Authorization Center or Voice Response Unit (VRU).

Regional Network: A network which processes debit transactions for financial institutions and retailers in a given geographic area. Regional networks are not part of the national interchange system.

Remittance Information: Information required by the biller to post customer bill payments effectively.

Remittance Processing Service: An electronic routing and settlement service that accepts previously captured and authorized payment transactions from members for delivery to other financial institutions.

Rental Agreement: A detailed contract with the cardholder indicating all charges the cardholder is responsible for.

Representment: A transaction presented to the issuer by the acquirer, when the merchant requests a reversal of a chargeback.

Retention Period: The minimum time the member must retain microfilm or other reproduction of interchange paper and chargeback documentation.

Retrieval Request: A request by the issuer to the acquirer for a copy of the actual ticket of a transaction. The initial step that the issuer takes in the event that either the issuer or the cardholder disputes a transaction.

Sales Draft: Paper documentation of a transaction. Also called a sales slip, charge slip, or hard copy.

Secure Socket Layer (SSL): A Web-based technology that lets one computer verify another's identity and allows secure connections.

Security: The area within Credit/Risk Management tasked with monitoring the performance of the entire active Global Electronic Technology, Inc. portfolio by means of exception reports identifying, investigating and monitoring suspect accounts for fraud-related activities.

Serial Port: The place on the back of your computer where you plug in your modem. Also called a communications port or comm port.

Server: A computer that provides a service to other computers (known as clients) on a network.

Service Entitlement Number: Assigned by and required for processing American Express, Discover, Diners Club, and JCB.

Settlement: As the sales transaction value moves from the merchant to the acquiring bank to the issuer, each party buys and sells the sales ticket. Settlement is what occurs when the acquiring bank and the issuer exchange data or funds during that function.

Settlement Statement: A document issued to the merchant, indicating the sales and credit activity, billing information, discount fee and chargebacks (if any) occurring during a particular time frame (one week, one month).

Shopping Cart Software: Shopping cart software allows the cardholder to select items from an online store and place them in a 'virtual shopping basket' or 'shopping cart.' The GET shopping cart remembers which items are selected while the cardholder views other items within the 'virtual storefront,' keeps a running total, and may calculate taxes and shipping. The items in the shopping cart are eventually ordered if the cardholder chooses.

Smart Card: A plastic card resembling traditional credit or debit cards that contains a computer chip; the chip is capable of storing significantly more information than a magnetic stripe.

Split Dial / Capture: Process which allows the authorization terminal to dial directly to different card processors (e.g. Amex) for authorization and 'Electronic Draft Capture.'

Split Dial Authorization: A process allowing the authorization terminal to dial directly to different card processors (e.g. American Express) for 'authorization.' In this instance, the merchant cannot be both EDC and Split Dial. Split Dial is also utilized for Check Guarantee companies.

Start Up Kit: Supplies shipped to new merchants including sales slips, credit slips, batch header tickets, return envelopes, VISA/MasterCard decals, merchant plastics, imprinter slugs and instructional materials.

Status Change: A non-monetary change such as an account change or update, i.e., new merchant address.

Stored-Value Card (gift/ loyalty card): A pre-paid payment card that stores a monetary value from which the purchase amount is deducted from the card each time the card is used.

Submission: The process of sending batch deposits to Merchant Services for processing. This may be done electronically or by mail.

Support Documentation: The forms necessary to effect a chargeback processing cycle, and any additional material to uphold a dispute.

Suspect Transaction: A transaction that occurs one day prior to or following the account number being listed in the combined Risk Bulletin.

Switch: An electronic mechanism that routes transaction data from a point-of-sale terminal to the authorizing data processor for approval of the card-issuing institution.

T&E CARD: Travel and Entertainment card issued by a private, non-bank company which deals directly with the cardholder and merchant and which generally requires payment in full monthly.

T&E MERCHANT: An airline, car-rental company, lodging, or restaurant establishment whose primary function is to provide travel/entertainment-related services.

TCP/IP: The system networks use to communicate with each other on the Internet. It stands for Transmission Control Protocol/Internet Protocol.

Telephone Bill Payment: A service that permits a customer to pay bills electronically. The customer gives a corporation the authority to debit his or her account for a specific amount or within a specified range of amounts.

Terminal Based: A system that captures card transactions and holds them until settlement.

Terminated Merchant File (TMF): A file listing the names of merchants and their principals whose bankcard relationships have been terminated for some reason by an acquirer. Operated jointly by VISA and MasterCard.

Third-Party Processing: Processing of transactions by service providers acting under contract to card issuers or acquirers.

Ticket: Another name for the sales slip or its 'monetary value' that results when a credit card purchase is made.

Transaction: Any event that causes a change in an organization's financial position or net worth, resulting from normal activity. Advance of funds, purchase of goods at a retailer or when a borrower activates a revolving line of credit. Activities affecting a deposit account carried out at the request of the account owner. One example of a transaction is the process that takes place when a cardholder makes a purchase with a credit card.

Transaction Date: The actual date on which a transaction occurs. Used in recording and tracking transactions.

Transaction Fees: Service costs charged to a merchant on a per-transaction basis.

Valid Date: The date embossed by the card issuer on the credit card. An establishment cannot accept a card for payment of goods or services prior to this date.

Visanet: The data processing systems, networks, and operations used to support and deliver authorization services, exception file services, and clearing and settlement services.

Voice Response Unit (VRU): An automated authorization support system for touch-tone telephones.

Wide Area Network (WAN): A network using common carrier provided lines (in contrast to LAN).

World Wide Web (WWW): A hypermedia system that lets you browse through an unlimited amount of interesting information