Merchant Services - Glossary
ABA Routing Number
The is a unique number, located at the bottom of a check preceding the account number, which directs electronic ACH deposits to the correct bank.
Access Number
The telephone number dialed by the modem that lets a computer communicate with an on-line service or ISP (Internet Service Provider).
American Express
An organization that issues cards and acquires transactions, unlike Visa and MasterCard which are bank associations.
Authorization Code
a numerical (or alpha numerical) code sent by the card issuer verifying that the sale has been authorized. The authorization may be obtained by voice, software, or terminal transmission. The merchant should include the authorization number on the sales draft to substantiate the authorization.
Automated Clearing House
An electronic method of transferring funds between banks via the federal reserve system. ACH is used by most banks physically located in the United States. The merchant's bank must utilize ACH transactions in order to deposit credit card funds to the merchant's checking account.
Chargeback
The process of taking back, or debiting, the merchant's credit card funds after the funds have been paid to the merchant. This occurs when a customer disputes a credit card transaction. The merchant must respond to the charge back and provide proof that the product or service was provided to the customer.
Debit Card
An ATM bankcard, also called a check card, allows a merchant to deduct money directly from a customer's bank account. Debit cards issued with a Visa or MasterCard logo are accepted by any merchant that also accepts Visa or MasterCard credit cards.
Discount Rate
A percentage rate charged by the bank for processing a merchant's transaction. This rate is usually determined by the type of business and/or how the credit card is processed. Retail based transactions (card present) will always have a lower discount rate than mail, phone, or Internet transactions (card absent).
Imprint
An imprint of a customer's credit card can be electronic (swiping the card through a credit card terminal) or manual (taking physical impression of the credit card). Either of these two methods is required to prove the customers credit card was present.
Manual Entry
Credit Card information is entered via computer keyboard or terminal keypad instead of swiping the card through a credit card reader terminal.
MasterCard
An association of banks that governs the issuing and acquiring of MasterCard transactions.
Merchant
A business (Sole proprietor, partnership, incorporation, LLC, etc.) that agrees to accept credit cards and debit cards when properly presented by the customer.
Merchant Account
A written, commercial bank account established by contractual agreement between your business and a bank. The agreement contains the respective rights, warranties, and duties with respect to accepting the bankcard (i.e. Visa or MasterCard). You must apply for this account much like you would apply for a commercial loan.
MO/TO
Refers to Mail Order / Telephone Order (card not present transactions).
Processor
A transaction processor, distinct from the bank, that processes data from the credit card transactions and then distributes funds from the merchant's bank account.
Protocol
A set of rules that lets computers agree how to communicate over the net
Recurring Transaction
A credit card transaction, which has been permitted by a customer, that is periodically charged to the customer's account. . (i.e. weekly, monthly, quarterly).
Retrieval Request
A request by a bank to a merchant for documentation concerning a transaction, usually a customer dispute or an improper sale or return. A retrieval request can lead to a chargeback.
Swiped Card
Credit card information that is electronically input by swiping the credit card through a card reader or terminal.
Transaction Fee
A per transaction amount charged by the bank for processing each transaction. This amount is in addition to the discount rate. For example: a discount rate of 3.00% plus 30 cents per transaction.
Visa
An association of banks that governs the issuing and acquiring of Visa credit card transactions.
Voice Authorization
When a merchant calls to obtain credit card authorization rather than using a terminal or credit card software to obtain the authorization. The merchant must, in addition to the voice authorization, submit the credit card information via terminal or software to close out the transaction and transfer the funds to the merchant's bank account.
