Glossary of Terms for the
Financial Services Industry

  • ABA Routing Number

    Also referred to as a Transit Routing Number. Directs electronic ACH deposits to the proper bank institution.

  • ACH (Automated Clearing House)

    The paperless funds transfer system maintained by the Federal Reserve or other entities that have networks to exchange electronic funds transfer items.

  • Acquirer

    Any bank, financial institution, and public or private company that maintains a Seller's credit card processing relationship and receives all transactions from the Seller to be distributed to the credit card issuing banks.

  • Address Verification Service (AVS)

    A service provided in which the Seller verifies the Cardholder's address with the Issuing Bank. Address verification is not a guarantee that a transaction is valid.

  • Adjustment

    A debit or credit to a Cardholder or Seller account to correct a transaction error.

  • Arbitration

    The process followed by the Card Associations to determine whether an Issuer or an Acquirer has ultimate responsibility for a chargeback. Either member initiates this process after the re-presentment process is completed.

  • Associations

    Any entity formed to administer and promote credit cards, including but not limited to MasterCard International®, VISA®, U.S.A., or VISA International®, that are licensing and regulatory agencies for credit card activities.

  • Authorization

    Approval of a bankcard transaction by the card-issuing banks or approved independent service providers, for a specified dollar amount. An authorization indicates only the availability of the card member's credit limit at the time the authorization is requested.

  • Authorization response

    The reply to a request for approval on a transaction.

  • Authorization response code

    A code returned in the authorization response to indicate approval of a transaction. The code is recorded on the transition receipt as proof of Authorization.

  • Automatic Bill Payment

    An arrangement between a merchant or service provider and a customer that allows recurring automatic charges for a service to an agreed-upon credit or debit account.

  • Back-end Processor

    A data processing company that contracts with Acquirers to provide communication and processing systems that connect with the interchange systems for clearing and settlement services on behalf of those Acquirers. (In some cases the Acquirer may act as its own back-end processor.)

  • Bankcard

    Any valid card issued by a Card Association or other card-issuing organization that is presented in payment for goods and services or to obtain cash advances.

  • Batch

    A batch is a collection of credit card transactions stored on a merchant's processing equipment. Usually, they are sent together for processing right before a store closes.

  • BIN (Bank Identification Number)

    The 6-digit range of numbers assigned by the Federal Bureau of Standards and used by card companies to identify their financial transactions. The Discover® range begins with '6' (6xxxxx), the MasterCard® range begins with '5' (5xxxxx), and the VISA® range begins with '4' (4xxxxx).

  • Card Association

    Any entity whose members issue credit or debit cards or acquire card payment transactions on behalf of their customers.

  • Card network

    Card processing networks, the largest of which are Visa, MasterCard, American Express and Discover, act as an intermediary between an acquirer and an issuer to authorize credit card transactions.

  • Card not present transactions

    Transactions that are processed without the card or the cardholder being present, e.g., phone or Internet orders.

  • Card present transactions

    Transactions in which the cardholder and the card are present.

  • Cardholder

    A person or entity that is issued a credit or debit account that is accessed through the use of a card.

  • Cardholder Information Security Program (CISP)

    Defines a standard of due care and enforcement for protecting cardholder information.

  • Chargeback

    When a credit card transaction is disputed (either at the request of the Cardholder or by a card Issuer), the dispute is handled through a chargeback. A chargeback will cause the amount of the original sale and a chargeback fee to be deducted from the checking or savings account you provided.

  • Clearing

    The transfer of data between Issuers and Acquirers.

  • "Code 10" Authorization

    A voice authorization code that you might initiate when you suspect a card is stolen or fake, or when a customer is acting suspiciously.

  • Credit Slip

    A paper or electronic representation of credit that is issued to a Cardholder on a prior credit card sale.

  • CVV2/CVC2

    CVV2/CVC2 is the three-digit value printed on the signature panel on the bank of cards immediately following the card account number. The 3-digit value helps validate that the cardholder has a card in his/her possession, and the card account is legitimate. A paper or electronic representation of credit that is issued to a Cardholder on a prior credit card sale.

  • Fees

    Fees for screening and processing online payments may include, but are not limited to, costs for the following:

    • Monthly Account
    • Discount rate
    • Per item charges for credit card and electronic check transactions.
  • Imprint

    When a credit card cannot swiped through a terminal, it is necessary to obtain an emboss of the card by using a manual imprinter.

  • Sales Support You Deserve

    • Proprietary Back End Settlement System – Sterling qualifies transactions at the best possible rate and provides unparalleled merchant support
    • Superior Risk Management – Continuous merchant monitoring systems provide significant protection
    • Robust Sales Portal provides comprehensive and secure web reporting
    • Outstanding multilingual support and marketing materials
    • State-of-the-art training
  • Interchange Network

    An electronic network maintained by Discover, MasterCard, American Express, or VISA that exchanges data relating to the value of card sales and credits among Issuers and Acquirers.

  • Interchange Fees

    Fees generally collected from Acquirers on the value of their card sales and paid to Issuers.

  • Issuer

    Any Discover, MasterCard American Express or VISA member, or a commercial organization that establishes and maintains customer credit lines that are accessed through the use of a card. (Public and private companies and financial institutions that offer card-accessed lines of credit to consumers and businesses.)

  • Magnetic stripe reading

    When the credit card is swiped through the terminal to record the card information. Obtaining a magnetic strip reading proves the card's presence at the time of a transaction.

  • MasterCard

    A registered mark for MasterCard International, Inc.

  • MATCH

    A shared database maintained by the Card Associations that lists all Sellers terminated for cause by Acquirers.

  • MCC or MCC Codes

    Special numbers assigned by the Card Associations to Seller types for identification and tracking purposes. MasterCard® uses MCC (Seller Category Code), while VISA® uses SIC (Standard Industry Codes).

  • Merchant Bank

    Your banking or financial institution that provides merchant services, including Visa acceptance services (also: Acquirer, Financial Institution).

  • Merchant Identification Number

    The number a payment processor assigns a merchant to identify your business.

  • MO/TO

    Short for “mail order (MO) or telephone order (TO).”

  • Payment Gateway

    An Internet-based service that transports credit card information from a computer terminal or Web site to a credit card processor, where it can be verified.

  • PCI standards

    The credit card processing guidelines that every merchant and acquirer must comply with to ensure the safety of cardholders' data when completing a credit card transaction. PCI stands for Payment Card Industry, and the PCI Standards Council is a joint effort of Visa, American Express, MasterCard, and Discover.

  • Quasi-cash purchase

    A transaction representing sale of items that are directly convertible to cash such as money orders and travelers checks.

  • Re-presentment

    The re-submission by an Acquirer of a previously charged back sale in an attempt to re-charge the Cardholder. Chargebacks requires some form of additional documentation confirming the validity of the charge and disputing the chargeback reason.

  • Retrieval Request

    A retrieval request occurs when your customer requests more information about a transaction that appears on his or her credit card statement.

  • Return Policy

    The merchant's limitations and/or requirements on accepting returned merchandise.

  • Sales Receipt

    The paper or electronic evidence of a purchase.

  • Secure Payment Page

    A secure payment page assures customers that their payment information is encrypted for privacy and data integrity before it's sent over the Internet. This page is typically identified by the "s" in https:// (instead of http://). Payment gateway providers make this necessary e-commerce link possible by hosting the payment gateway software and individual secure payment pages on their own servers.

  • Merchant or Online Merchant

    An individual or business that sells products or services and is capable of accepting payment for products and services via a merchant account.

  • Merchant Account or Online Merchant Account

    The bank account a Seller identifies as the sole account from which monthly and/or transaction fees are debited.

  • Merchant Bank

    (Acquirer or Processor) The financial institution with which a Merchant contracts to accept credit cards for payment of goods and services.

  • Merchant Fees or Fees

    Merchants are charged several types of fees for screening and processing online payments. Fees for products and services include, but are not limited to costs for the following:

    • Monthly Online Merchant Account
    • Discount rate
    • Per item charges for credit card and electronic check transactions
    • Chargebacks
  • Settlement

    The process of transferring funds for sales and credits between Acquirers and Issuers, including the final debiting of a Cardholder's account and crediting a Merchant's account.

  • SIC or Standard Industry Codes

    Special numbers assigned by the Card Associations to Seller types for identification and tracking purposes. MasterCard uses MCC (Seller Category Code), while VISA uses SIC (Standard Industry Codes).

  • Sole Proprietorship

    A business in which you have complete control and responsibility.

  • Transaction

    An act between a Seller and a Cardholder that results in either a paper or an electronic representation of the Cardholder's promise to pay for goods or services received from the act.

  • Unauthorized Transaction

    Any sale for which a Cardholder does not provide his/her specific authorization (This should not be confused with the failure to receive an authorization response from the Issuer.)

  • VISA

    A registered mark for Visa U.S.A., Inc and Visa International, Inc.