Merchant Accounts

Glossary of Terms

Address Verification Service (AVS)

Allows you to run AVS on all credit card transactions to check the billing information that was provided to the information on file with the credit card processing company. This helps to fight against charge backs and fraudulent orders.

Bankcard Association

The Visa and MasterCard associations.

Batch

A collection of transactions that have been made in a single day through your merchant account. Most terminals and real-time processors will collect all of the transactions and then do a batch at the end of day, instead of batching them throughout the day.

Chargeback

A payment dispute initiated by the cardholder with their credit card issuing bank. The amount of the disputed transaction is immediately withdrawn from the merchant's bank account, and the merchant can dispute the chargeback with proof of purchase, signature, proof of delivery, etc. A chargeback fee is usually assessed to the merchant on top of the actual transaction. A chargeback is usually generated when a cardholder disputes a transaction because of one of the following criteria: non fulfillment of product or service, unauthorized purchase, product/service expectations not met.**

**When a chargeback is generated, the issuing and acquiring banks must determine which party is responsible for the transaction.

CVV2 Fraud Protection Security Tool

An important security feature for card-not-present transactions now appears on the back of most credit cards. This feature is a three-digit value which provides a cryptographic check of the information embossed on the card. CVV2's Location: The CVV2 three-digit value for Visa/MasterCard, four-digit for Amex, is printed on the signature panel on the back of credit cards immediately following the credit card account number.
The CVV2 value helps validate two things: The customer has their credit card in his/her possession. The credit card account is legitimate. CVV2 is not contained in the magnetic stripe information, nor does it appear on sales receipts.

Discount Rate

This is the merchant account fee that is charged to a merchant by Visa, MasterCard, Discover and American Express, for processing their credit card transactions.

E-Commerce

This pertains to doing business online and making merchant account transactions, sales, refunds and selling online. This pertains to any online sales, and the way businesses communicate and grow.

Gateway Processor

Most of the smaller merchant providers resell some other gateway processor, which is the company that does all the charging on your customer's accounts.

Interchange Rate

The rate that is set and charged by the Bankcard Association to the acquiring banks for the transaction. The interchange rate, which is actually a percentage of the transaction amount, also helps account for authorization costs, fraud and the general or average banks cost of funds.

Issuing Bank

This is the bank that issues the customer the credit card and funds your account when you make a charge to one of their accounts. They will then bill their customers for the debit on their card.

Merchant Account

A merchant account is a relationship between a retailer and a merchant bank that enables retailers to accept web-based credit card payments from their customers. A merchant account is the account into which the merchant account provider deposits payments into your business checking account from transactions that were made online. To qualify for a merchant account, retailers must meet the bank's requirements.

Merchant Provider

This is a company that will offer you a merchant account. They will usually have a relationship with their sponsored payment processor to give you a merchant account. If they do not own their own gateway system, they usually resell another company's system which will do the processing, while the bank does the charging and depositing.

Merchant Bank

A bank that works with businesses to give them the ability to offer merchant accounts. They take care of charging the customer and funding the merchant account holder.

Merchant Processing

The settlement of electronic payment transactions for merchants. It is a separate and distinct business line from credit card issuing. Merchant processing involves gathering sales information from the merchant, collecting funds from the issuing bank, and payment to the merchant.

Merchant Underwriting

Merchant underwriting & approval policy helps control credit risk. The policy is effective in designating and targeting merchants who meet the acquiring banks processing criteria. The policy also acts as an agreement between the third party billing agent & the acquiring banks as to what information is needed from the merchants to measure the merchant against the acquiring desired list of criteria. The policy also outlines and lists what information is needed from the merchant, for the merchants agreement.

Merchant Services Provider

A bank, ISO, or other firm that provides services for processing financial transactions, usually credit card sales. Many MSPs provide merchant accounts, while others require their clients to establish merchant accounts on their own. Some MSPs claim that they do not require merchant accounts; this may indicate factoring, which is illegal in many areas.

Real-time Credit Card Processing

Real-time processing - The authorization and processing of credit card transactions immediately following a purchase. Real-time processing is especially important for web sites that sell products and services that consumers expect immediately, such as memberships to the site or software downloads. A payment gateway links your purchasing page (i.e., the page on your web site where your customers enter their credit card information) to the credit card associations and to your merchant account. Within seconds, the gateway obtains authorization for payment from the credit card associations. The gateway also handles the transfer of funds into your merchant account.

Recurring Billing

Our Recurring Billing feature allows you to automatically charge your customers on a recurring basis. This is ideal if you need to set up regularly scheduled payments each month for your customers.

Secure Socket Layer (SSL)

SSL is a secure web protocol that uses 128 bit or higher encryption technology to keep your customer's information completely safe through the entire ordering process.

Shopping Cart Program

A software package that runs as part of a Web site to collect and record purchasing decisions by a visitor. Shopping cart programs are stored on Web servers.

Transaction Fee

This is the fee that your processor, or your merchant account provider charges for the transaction. This fee covers the costs of the computers and network required to accomplish the task.

Unlimited Number of Products

There is no limit to the number of products you can setup with our software.

UPS, Fedex, USPS Integrator

Our pre-integrated shipping tables will figure out the shipping costs for you on a zone to zone basis. Ability to set up Custom Shipping and/or Handling Fees is also available.

Virtual Terminal (Transaction Center)

A Virtual Terminal (Transaction Center) allows you to process credit card transactions manually from any computer with an Internet connection. You simply log in to a secure website with a username and password to authorize, credit, void, and settle credit card transactions.

Visa CISP Compliant

CISP (Cardholder Information Security Program) compliance certification from Visa. CISP is a Visa certification that ensures a company's compliance with the highest available standards of cardholder information security.