| 3D Secure |
3D Secure is an online payment security protocol designed to enhance the security of internet transactions by requiring an additional layer of authentication from the cardholder, typically through a password or a code sent to their mobile device. |
| Acquirer (Acquiring Bank) |
The financial institution that processes credit card payments on behalf of the merchant. |
| AML |
Anti-Money Laundering (AML) refers to the regulations, procedures, and measures implemented by financial institutions and other entities to prevent, detect, and report money laundering activities and other financial crimes. |
| Assessment Fee |
Credit card assessment fees refer to the costs passed through to credit card brand companies. For example, when someone uses a Visa card to pay for products or services at your business, the assessment fee you pay will cover the operating costs for the card network, Visa. Each credit card brand, such as Visa, American Express, Mastercard, and Discover, has its own credit card assessment fees. |
| Authorization |
The process of verifying whether the credit card has sufficient funds and is valid for the transaction. |
| Authorization Code |
A code generated by the payment processor that confirms the approval of a transaction. |
| Authorization Hold |
A temporary hold placed on a customer's credit card to ensure funds are available for a transaction. This hold is released once the transaction is processed. |
| AVS |
(Address Verification System) A security feature that verifies the cardholders billing address with the issuing bank to prevent fraud. |
| Batch Closing |
The process of finalizing and submitting all transactions from a given period (usually daily) to the payment processor for settlement. |
| Batch Processing |
The grouping of transactions for processing at a specific time, usually at the end of the business day. |
| Card Holder |
An person, or a business that holds a credit or debit card account that allows them to make authorised payments. |
| Card Issuer |
The financial institution or bank that issued the credit card to the cardholder. |
| Card Not Present (CNP) |
A transaction where the cardholder does not physically present the card to the merchant, typically occurring online or over the phone. |
| Card Present (CP) |
A transaction where the cardholder physically presents the card to the merchant for payment. |
| Card Verification Value (CVV/CVC) |
A security code on the credit card used to verify that the cardholder is in possession of the card. |
| Chargeback |
A reversal of a transaction initiated by the cardholders bank, typically due to disputed charges. Merchants may be liable for chargeback fees. |
| Clearing |
The process of sending the authorized transaction to the issuing bank for settlement. |
| Contactless |
Payments made by tapping a credit card or mobile device on a payment terminal equipped with Near Field Communication (NFC) technology. |
| Credit Card Processor |
A company that handles credit card transactions on behalf of a merchant, facilitating the transfer of funds from the cardholder's account to the merchants account. |
| Customer Due Diligence (CDD) |
The process used by businesses, particularly financial institutions, to verify the identity of their customers and assess the potential risks of illegal activities such as money laundering or terrorist financing. |
| CVV |
(Card Verification Value) A security code on the back of a credit card used to verify that the card is in the possession of the customer during online transactions. |
| DCC |
Dynamic Currency Conversion (DCC) is a service that allows international cardholders to choose to pay for a transaction in their home currency rather than the local currency of the merchant at the point of sale or during online checkout. |
| Discount Rate |
The percentage fee charged by the credit card processor for each transaction. This rate varies depending on the type of card and the merchant's industry. |
| Discount Rate Tier |
Different rates charged based on the type of transaction (e.g., swiped, keyed-in, online). |
| Early Termination Fee |
A fee charged if the merchant terminates their contract with the payment processor before the agreed term. |
| ECOM |
Short for e-commerce, refers to the buying and selling of goods and services over the internet. |
| EMV |
A global standard for credit and debit cards equipped with computer chips and the technology used to authenticate chip-card transactions. |
| EMV Chip |
A microprocessor embedded in credit cards that enhances security by generating a unique transaction code for each purchase. |
| EPOS |
Electronic Point of Sale refers to the combination of hardware and software systems used by businesses to process transactions and manage sales data. |
| Fraud Prevention Tools (FPT) |
Tools and services that help merchants detect and prevent fraudulent transactions, such as AVS, CVV checks, and real-time fraud monitoring. |
| Gateway Fee |
A fee charged by the payment gateway provider for processing transactions through their system. |
| Holdback |
A portion of funds held in reserve by the acquiring bank to cover potential chargebacks or refunds. |
| IBAN |
International Bank Account Number (IBAN) is a standardized format for identifying bank accounts across international borders, used to facilitate cross-border transactions by providing a unique identifier for each account that includes country, bank, and account details. |
| Interchange Fee |
A fee paid by the merchants bank to the cardholders bank, set by the card networks (Visa, MasterCard, etc.). This fee is part of the cost of processing credit card transactions. |
| Issuer (Issuing Bank) |
The bank that issued the customer's credit card. |
| KYB |
Know Your Business (KYB) is a regulatory process used by financial institutions and other organizations to verify the legitimacy and assess the potential risks associated with business clients. |
| KYC |
Know Your Customer (KYC) is a regulatory process used by financial institutions and other businesses to verify the identity and assess the potential risks of illegal activities by their customers.
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| MCC |
A merchant category code (MCC) is a four-digit number used to classify a business by the types of goods or services it provides. |
| Merchant |
In card services, the name Merchant describes the business that wants to take card payments. |
| Merchant Account |
A type of bank account that allows a business to accept credit card payments. |
| Merchant Discount Rate (MDR) |
The percentage of each transaction amount that the merchant pays to the acquiring bank for processing credit card payments. |
| Merchant Statement |
A monthly statement detailing the transactions processed, fees charged, and other account activity. |
| MID |
Merchant ID Number (MID) is a unique code allocated to a Merchant that identfies their business to the payment processing provider. |
| MLRO |
Money Laundering Reporting Officer (MLRO) is a designated individual within a financial institution or organization responsible for overseeing and ensuring compliance with anti-money laundering (AML) regulations. |
| Mobile Wallet |
A mobile wallet is a digital application on a smartphone or other mobile device that allows users to store payment card information, loyalty cards, coupons, and other digital assets for making secure transactions both online and in physical stores. |
| Monthly Minimum Fee |
A fee charged if the merchant does not meet a minimum transaction volume or value each month. |
| Payment Gateway |
The technology that securely authorizes and processes credit card payments for online transactions. |
| PCI Compliance |
Adherence to the Payment Card Industry Data Security Standard (PCI DSS), which outlines security measures for protecting cardholder data. |
| Point of Sale (POS) |
The location or device where the credit card transaction is completed, such as a physical terminal or an online payment gateway. |
| Point of Sale (POS) System |
The hardware (card machine) and software used by merchants to process credit card transactions at the physical location. |
| Pre-authorization (PreAuth) |
A process where a transaction is authorized but not immediately charged, often used for hotel stays or rental cars. |
| PSD2 |
The Second Payment Services Directive (PSD2) is a European Union regulation aimed at enhancing competition and innovation in the financial sector, improving consumer rights, and increasing the security of electronic payments by promoting the development of open banking and requiring strong customer authentication (SCA) for online transactions. |
| PSP |
A Payment Service Provider (PSP) is a company that offers merchants a range of payment processing services, enabling them to accept various payment methods such as credit cards, debit cards, and electronic wallets in both online and offline transactions. |
| Recurring Billing |
The automatic billing of a customers credit card at regular intervals for subscription-based services or membership fees. |
| Recurring Payments |
Automatic, regular credit card payments set up for subscription-based services or ongoing transactions. |
| Refund |
Returning funds to the customer's credit card after a transaction has been completed. |
| Retrieval Request |
A request from the card issuer for documentation related to a specific transaction, often preceding a chargeback. |
| Rolling Reserve |
A portion of the merchants daily credit card sales held back by the processor to cover potential chargebacks or refunds. |
| SEPA |
SEPA (Single Euro Payments Area) is an initiative of the European Union that allows consumers, businesses, and banks to make and receive payments in euros within the SEPA region under the same basic conditions, rights, and obligations, ensuring efficient cross-border transactions across participating European countries. |
| Settlement |
The process of transferring funds from the customers bank to the merchants bank account after the transaction is authorized and processed. |
| Settlement Time |
The time it takes for funds to be transferred from the customers bank to the merchants account after a transaction is processed. |
| Statement Fee |
A fee charged for generating and providing a monthly statement of transactions and fees. |
| TID |
Terminal ID (TID) is unique code used to identify each of your payment terminals (card machines). |
| Tokenization |
The process of replacing sensitive credit card information with a unique identifier (token) to enhance security. |
| Transaction Fee |
A fee charged per transaction, often a fixed amount plus a percentage of the sale. |
| Transaction Monitoring |
The process of actively overseeing financial transactions in real-time to detect unusual or suspicious activities, which may indicate potential fraud, money laundering, or other illicit activities, and taking appropriate action based on predefined rules and thresholds. |
| UBO |
UBO (Ultimate Beneficial Owner) refers to the natural person who ultimately owns or controls a legal entity or arrangement, typically at least 25% of its shares or voting rights, or who otherwise exercises control over the management of the entity. |
| Underwriting |
The process through which financial institutions or payment processors assess the risk associated with a merchant before providing them with a merchant account. |
| Virtual Card |
A virtual card is a digital payment card that operates similarly to a physical credit or debit card but exists only in electronic form, typically used for online transactions and issued with specific spending limits and expiration dates for added security. |
| Virtual Terminal (MOTO) |
An online interface that allows merchants to manually enter credit card details to process payments, typically used for phone or mail orders. |
| Voice Authorization |
The process of obtaining transaction approval by calling the card issuer, used when electronic authorization is not possible. |
