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GLOSSARY

A-L M-Z

 

ACH (Automated Clearing House)

One of a group of processing organizations that is networked together to exchange (clear and settle) electronic debit transactions.

ACH Credit

A transaction through the ACH system originated to pay a receiver (put money into their account).

Account Number

Unique series digits used to numerically identify each Cardholder.  The unique identification number assigned to the account of a specific party, within a given institution.

Acquiring Bank

The bank that maintains the Merchant relationship and receives all transactions from the Merchant.

Activity File

A file maintained within the MasterCard or Visa processing system, which lists account numbers for which stand-in authorization has been approved within a four-day period.

Adjustment

An entry initiated by an Acquirer for the purpose of correcting a system error or an inaccurate record of a transaction, and effecting the movement of funds between the Issuer and Acquirer with respect to such transaction.

Agent Bank

A bank that, by agreement, participates in another bank's card program, usually by turning over its Cardholder and Merchant applications for bank cards to the bank administering the bank card program and by acting as a depository for Merchants.

Application

A program consisting of special codes stored in memory used to control a terminal and its operations.

Arbitration

The procedure a Member can use to resolve a chargeback-related dispute between two Members. MasterCard or Visa resolves the dispute between Members and decides responsibility for the fines, which may be assessed to the participating Members.

Authentication

Verifying the identity of a person or computer process.

Authorization

A process defined in operational regulations whereby an Issuer approves a transaction or by an authorized agent or MasterCard/Visa on behalf of that Issuer, before the Merchant completes the transaction. In this process, the Merchant receives a sales validation by telephone or via the authorization terminal.

Approval Code

A number issued to a participating Merchant by the authorization center, or stand-in processing which confirms the authorization for a sale or service.

Authorization Center

A department usually controlled by the card processor that can electronically communicate a Merchant's requests for authorization on credit card transactions to the Cardholder's bank.

Average Ticket

The average dollar size of a Merchant credit card transaction. Generally used in pricing decisions and calculations.

AVS (Address Verification Software)

A product designed to combat fraud predominantly in Internet; mail order or telephone order transactions through usage of cardholders name and address information.

Balance Inquiry

A debit card transaction that has no dollar amount and that permits the Cardholder to obtain the current balance of his checking and/or savings account.

Bandwidth

The amount of data that can flow through a channel. The higher the bandwidth the more data that can travel at once.

Bankcard

MasterCard, Visa or other credit cards issued by a bank.

Bankcard Association

A group of banks formed either for the purpose of sponsoring a single identity (i.e. MasterCard or Visa) or a group of banks formed to jointly operate a credit card plan through the use of common processing and administrative facilities.

Banking Day

With reference to a participating depository financial institution, any day on which it is open to the public during any part of the day, for carrying on substantially all of its financial functions.

Bank Wire Transfer

Transfer of funds to any bank within the Federal Reserve System.

Batch

Usually a day's worth of transactions, including sales, credits', voids, etc., to be processed by the card processor.

Bank Card

A financial transaction card issued by a bank or other financial institution such as a MasterCard/Visa.

Batch Processing

A type of data processing operation and data communications transmission where related transactions are grouped together and transmitted for processing, usually by the same computer and under the same application. Batch processing is generally regarded as non real-time processing. Batch processing should be used only when response time is not critical.

Cancellation Number

A number provided by a hotel/motel to verify a shareholders notification to cancel a guaranteed reservation or advance resort deposit.

Cardholder

The person to whom a card has been issued or the additional individual authorized to use the card.

Cardholder Bank

The bank that has issued a credit card to an individual. The term is frequently used in conjunction with interchange arrangements to identify the card-issuing bank.

Chargeback

Paper returned by card Issuer to the Acquirer after a presentment.

Chargeback Period

The number of calendar days from the central processing date during which period the Issuer may exercise a chargeback right.

Check Guarantee

A service provided by a third party vendor who guarantees Customers payment by check for a specified amount. Stipulations require that the Merchant follows correct authorization procedures.

Cirrus

Cirrus Systems, Inc., is a wholly owned subsidiary of MasterCard International, Inc. It operates as an international ATM sharing association.

Clearing

The process of exchanging financial transaction details between an Acquirer and an Issuer to facilitate posting of a Cardholders account and reconciliation of a Customer's settlement position.

Combined Terminated Merchant File (CTMF)

A file containing the business name and the names and identification of Merchant principals who have been terminated by an Acquirer for specified reasons. The CTMF is operated jointly by MasterCard and Visa.

Credit

A chronicled reversal of a purchase.

Credit Card

MasterCard, Visa or other credit cards issued by a bank. A plastic card with a credit limit, which is used to purchase goods and services and to obtain cash advances on credit, for which a Cardholder is subsequently billed by an Issuing institution for repayment of the credit extended.

Credit Limit

The maximum credit line set by the card Issuer for Customers account (open to buy).

Data Capture

A data processing term for the collection, formatting and storage of data in computer memory according to predefined fields: (e.g. Customer name, account number and dollar amount of purchase). When a terminal reads this information from a plastic card or from entries at a terminal, the information is stored for later output as a hard copy printout or as soft copy on CRT display.

Debit

A transaction which results in a debit against the account balance of a Cardholder.

Dial-up Terminal

A Merchant authorization device, which, like a telephone, dials the authorization, center for validation of transactions.

Discount Rate (Merchant Discount)

A fee a Merchant pays the bank to process a purchase charged to a MasterCard and Visa card.

EDC (Electronic Draft Capture)

A system in which each transaction is routed to the MasterCard and Visa host computer for processing and storage. The stored transactions are used to create settlement files and transaction reports.

EFT (Electronic Funds Transfer)

A paperless transfer of funds initiated from a terminal, computer, telephone instrument, or magnetic tape.

Encryption

The scrambling of a message or file to make it unreadable except by the intended receiver, who unscrambles it.

Factoring

The bribery of a legitimate Merchant to process another Merchant's transactions (often fraudulent) in return for payment.

Firewall

A filter for messages. A system that has a firewall lets only certain kind of messages in.

Force/post Authorization

The after-the-fact entry of a purchase results from a referral (call center) message or a downtime interruption of service from the Network. This enables the Merchant to enter (as a force/post author) the transactions, including the approval code into the EDC batch.

Funds Availability

The time at which funds associated with paperless entries have been made available to the Merchant.

Funding

Refers to the payment to a Merchant for his submitted deposits.

Gross Deposit

Submitting credit card sales and credits at the face amount. The Acquirer later deducts the discount.

Hard Copy

The document of a transaction, such as sales drafts, credit slips, etc.

Host Based System

Using the dialup terminal as a passive device, which interacts with the host computer for control, this system captures transactions in the host computer.

Internet Gateway Provider

An Internet based communication network which completes the connection between the banks network and the actual 'submit' page's data.

Imprinter

A hand or electric machine which imprints the Merchant's name and ID number on sales drafts, as well as the cardholders name and card number.

In-one

A terminal and printer product all in one manufactured by Hypercom or Verifone.

INET

Interbank Network for Electronic Transfer. The MasterCard settlement system for the daily processing and routing of worldwide financial transactions between MasterCard and its Members.

Interchange

The domestic and international systems operated by MasterCard International and Visa International for authorization, settlement and the passing through of interchange and other fees, as well as other monetary and non-monetary information related to credit card activities.

Interchange Fee

The amount paid by the Merchant bank to the cardholder's bank on each transaction. MasterCard International and Visa International independently establish interchange fees for their respective networks.

Issuing Bank

Cardholder's bank or the bank, which has issued a MasterCard, Visa or other credit cards to an individual.

Local

The network telecommunications access point, which can be accessed by the terminal dialing either, a local telephone number for authorization.

M-Z

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