Acquirer, Acquiring BankA financial institution that is a member of Visa   and/or MasterCard   and maintains the merchant credit cardprocessing relationship. The acquirer receives all transactions from the merchant to be distributed to the issuingbanks.Address Verification Service (AVS)A service supported by Visa, MasterCard, Discover and American Express   that verifies the cardholder's billingaddress against the one on file with the issuer. AVS is designed to help combat fraud in non-face- to-facetransactions.Advanced Programming Interface (API)APIs allow users to program to a pre-constructed interface, instead of individually programming a device or piece ofsoftware.AssociationMasterCard International, Visa U.S.A. or Visa International, which are licensing regulatory agencies for bank cardactivities.AuthorizationThe process by which a transaction is approved by the issuer, or by Visa/MasterCard on behalf of the issuer.Permission is given to (or denied) the merchant, via the acquirer, to accept a specific transaction from the cardholderaccount. An authorization indicates only that the card is valid and that sufficient funds are available on thecardholder's credit limit at the time the request is made.Authorization Approval CodeThe numerical code designated by the issuer, assigned to a sales transaction as verification that the sale isauthorized.Authorization Only (Auth Only)Used to reserve an amount against a credit card's available credit limit for intended purchases. Authorization Only ismost frequently used in the lodging (check-in), restaurant (tab) and car rental (pick-up) industries, where an approvalis received for an estimated amount prior to the finalization of the charge amount.Authorization RequestA merchant's request for an authorization to accept a cardholder's sales transaction. An authorization request canoccur electronically via a credit card processing terminal or via telephone as a voice authorization.Average TicketThe average dollar amount of sale for credit card transactions.Back-End NetworkThe settlement provider responsible for finalizing transactions, routing payment to a merchant's account andgenerating statements.Bank Identification Number (BIN)A unique series of numbers assigned by Visa/MasterCard to a member institution, which identifies that institution intransaction processing. The BIN comprises the first six digits of a standard credit card number.Bank CardA card issued by a banking institution with a MasterCard or Visa brand.BatchA group of approved credit card transactions, usually accumulated during one business day.Batch DepositThe electronic depositing of a batch file transmitted to the transaction processor for settlement.Batch ProcessingThe authorization of transactions offline when immediate approval is not required. Transactions are collected in abatch and sent as one transmission for authorization and/or settlement. Batch processing is generally used with mailorder/telephone order (MOTO) transactions.CaptureReceiving and storing transaction data at the processor's host computer, to be submitted later for processing andpayment.Card-Not- PresentA type of card transaction in which the card is not present at the point of sale for the magnetic stripe to be read.These are considered higher risk transactions.Card PresentA type of transaction in which the card is present and is swiped through an electronic device that reads the contentsof the magnetic stripe on the back of the card.CardholderThe person to whom a payment card is issued, or an additional person authorized by the original cardholder to usethe card.ChargebackA challenge to a transaction initiated by the issuer or cardholder that is returned to the acquirer for resolution.Chargeback FeeThe amount assessed by the acquirer for processing chargebacks.Chargeback Reason CodeA numerical code that identifies the specific reason for a chargeback. MasterCard and Visa each have their ownchargeback codes.Check CardA bank card that can be used with a PIN at an ATM or without a PIN at the point of sale, also known as an offlinedebit card. When used at the point of sale, the transaction is processed through interchange as a credit cardtransaction with the funds debited from the cardholder's checking account.CloseSending a merchant's completed transactions to the host for processing. (See also "Settlement")CreditA refund or price adjustment given for a previous purchase.CVC2Card Validation Code - MasterCard term for the three-digit code printed next to the card number in the signaturepanel and used as part of the authorization process.CVV2Card Verification Value - Visa term for the three-digit code printed next to the card number in the signature panel andused as part of the authorization process.Data EncryptionThe scrambling of data so only the intended users can read and understand the encrypted information.DBADoing Business As - the name a business uses to operate.Debit CardA bankcard used to purchase goods and services and to obtain cash, which debits the cardholder's personalchecking account. During online debit transactions, the cardholder must enter a PIN.Debit SwitchA portal that transmits debit data between gateway banks and debit card issuers - also referred to as "Debit Network."Only financial institutions may be members of debit switches.DeclineA response from the card issuer denying the use of the card for the attempted transaction. If a request for approval isdeclined, the merchant must ask the cardholder for another form of payment.Dial-Up TerminalAn authorization terminal that uses a telephone line to communicate with the authorization center.Discount RateThe fees charged by the card acquirer to the merchant for processing payment card transactions.Electronic Benefits Transfer (EBT)The automation of government benefits through electronic authorization, data capture and settlement processes.Plastic cards with magnetic stripes are used, eliminating paper benefits and coupon distribution.EncryptionMethod of scrambling data to protect a cardholder's personal information.Fleet CardPayment card designed mainly for fueling, maintenance and repairs of corporate motor vehicles. Fleet cards arenormally used to provide specialized reporting.FolioA number assigned by a lodging merchant for tracking a guest's charges.Fraud InvestigationThe process of identifying suspicious merchant or cardholder activity.Front-End NetworkNetwork provider responsible for authorizing and capturing transactions and forwarding the information to the back-end network.GatewayManages the electronic connection between consumers and their financial institutions and transmits data.Gift CardA reusable, stored-value card that enables merchants to have an electronic alternative to paper gift certificates.InterchangeThe exchange of transaction data between acquiring and issuing institutions.Interchange FeesFees paid by the acquirer to the issuer to compensate for transaction-related costs. MasterCard and Visa establishinterchange fee rates.Issuer, Issuing BankThe financial institution and member of Visa or MasterCard that holds contractual agreements with, and issues cardsto, cardholders.Magnetic StripeA panel located on the back of a payment card containing magnetically encoded cardholder account information.Magnetic Stripe ReaderA point-of- sale device that reads the encoded information from the magnetic stripe when the card is passed throughthe reader. Readers may read Track Two, which contains the cardholder account number and expiration date, or bothTrack Two and Track One, which contains the cardholder name.Merchant AgreementThe written contract between the merchant and acquirer that details their respective rights, responsibilities andwarranties.Merchant Category Code (MCC)A universal four-digit merchant classification code that identifies the merchant by type of processing, authorizationand settlement. Similar to a Standard Industrial Classification (SIC), but more defined.Merchant DiscountThe fee an acquiring member charges the merchant to cover the costs of providing deposit credit and handling creditcard sales transactions.Merchant Identification (MID) NumberThe identification number or account number assigned to a merchant by the credit card processing company.Offline DebitDebit transaction that occurs when a Visa/MasterCard check card is authorized through the credit card system andthe amount is debited from the cardholder's checking (DDA) account.Offline TransactionA transaction that is authorized through a voice authorization and later keyed into a POS terminal prior to settlement.Point-of- Sale (POS)The location at which a payment card transaction occurs, usually by way of a device such as a credit card terminal orcash register.PostingThe process of recording debits and credits to an account.Processing FeesThe fees associated with the processing of credit card transactions.ProcessorA company responsible for processing interchange transactions - operated by an acquirer or acting on the acquirer'sbehalf.Recurring TransactionA transaction charged to a cardholder's account (with prior permission) on a periodic basis for recurring goods andservices, i.e., health club memberships.RefundA refund occurs when the merchant rebates all, or a portion, of an original transaction amount to the cardholder.Refunds are made to the same card that was used for the original transaction. Similar to a Credit.Retail TransactionA face-to- face transaction in which the cardholder presents a card to the merchant to pay for goods or services.Retrieval RequestA request by the issuer to the acquirer for a copy of the original sales ticket.ReversalWhen an acquirer successfully represents a chargeback to the issuer, the chargeback is reversed and the funds arereturned to the merchant.Sales Transaction FeeThe amount the financial institution charges a merchant for each sales transaction.SettlementThe process in which a merchant transmits batches of transactions to the acquirer. In interchange, it is the process bywhich acquirers and issuers exchange financial data resulting from sales transactions, cash advances, merchandisecredits, etc.Smart CardA payment card with a built-in microprocessor (chip) that stores information. Smart cards can be used for stored-value cards, credit cards, loyalty programs and security access.TransactionAny action between a cardholder and a merchant or member that results in activity on the account, such as apurchase, cash advance or credit.Transaction DateThe actual date on which a transaction occurs.Transaction FeeThe amount a merchant pays per transaction for processing.Voice AuthorizationTransactions authorized by a voice operator. Voice-approved transactions must be "forced" into a terminal batch forsettlement.Zero Floor LimitRequires that all transactions receive authorization.