Notes

Term

Description


Address Verification Service (AVS):

A service that verifies the cardholder's billing address in order to help combat fraud in "card not present" transactions (e.g. mail order, telephone order, Internet, etc.). Used only in the United States.


Authorization

The request to charge a cardholder. Reduces the cardholder's "Open to Buy" but does not actually charge the account. Authorizations must be settled in order to charge the account. If not used within a certain time period will "drop off." Time period determined by issuing bank.


Authorization Code

The numerical or alphanumeric code sent by the card issuer, given to a sales transaction as verification that the sale has been authorized. The authorization code is always included on the merchant's sales draft.


Auth Only

A transaction in which the merchant does not intend to charge the cardholder until a later time, if at all.


Batch

A collection of transactions. Usually a merchant has one batch per day or per shift.


Batch Processing

A type of data processing where related transactions are transmitted as a group for processing.


Close Batch

The process by which transactions with authorization codes are sent to the processor for payment to the merchant.


Credit/refund

A return of funds to a cardholder's account (crediting entry) for a sale that has already been authorized and settled.


Debit Card

An ATM bank card used to purchase goods and services and to obtain cash, which debits the cardholder's personal deposit account. Requires a PIN (Personal Identification Number) for use.


Decline

Response to transaction request that the issuing bank will not authorize the transaction.


Deposit

When a merchant closes a batch and sends the transactions to the host computer for settlement. Compare to release. Batches should be closed on a daily basis to ensure the lowest discount rates.


Electronic Draft Capture

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


Electronic Funds Transfer

The paperless act of transmitting money through a computer network. Usually does not refer to check guarantee.


Encryption

The process of encoding a PIN Pad with the processor's configuration and key injection for the purpose of accepting debit cards. Most common formats are DUKPT (Derived Unique Key Per Transaction) and Masterkey (MasterCard's debit key encryption format). Entitlements: The credit or debit card processing services FDMS provides to an establishment.


Expiration Date

The date embossed on the credit card beyond which the card is not acceptable by the establishment at the point of sale.


Force

A sale transaction for which a merchant received a voice authorization. A force is done so that the previously authorized transaction can be settled and the merchant can receive funds. Also known as post authorization.


Host Computer

Refers to computer at the processor that is dialed for authorization and settlement.


Imprint

Can be electronic (by swiping a card through a card reader) or manual (by obtaining a physical imprint using a knuckle-buster). One of the two is always required on a credit card transaction to prove that the card was present.
"Card Present" transactions have lower discounts than "Card Not Present" transactions.


Magnetic Stripe

A stripe on the back of a bankcard that contains magnetically encoded cardholder account information. The name of the cardholder is stored on Track I and the account number and expiration date are stored on Track II. Also referred to as MAG Stripe.


Merchant

A retailer, or any other entity (pursuant to a Merchant Agreement), that agrees to accept credit cards, debit cards, or both, when properly presented.


MID

Refers to Merchant Identification Number. This unique number identifies a merchant.


Modem

Stands for MOdulatorDEModulator. An electronic telecommunications hardware device that is used by the terminal or PC POS to dial up the processor.


Network

See processor. Also used to refer to communication networks like AT&T, CompuServe, or Telenet.


PIN

Personal Identification Number used by a cardholder to authenticate card ownership for ATM or Debit card transactions. The cardholder enters his/her PIN into a PIN pad. Customer entry of his/her PIN is required to complete an ATM/Debit card transaction.


Point of Sale

The place and time at which a transaction occurs. This term also refers to the devices or software used to capture transactions.


Post-Auth (Post Authorization)

A sale transaction for which you received a voice authorization.



Private Label Card

A bankcard that can be used only in a specific merchant's store. Typically not a bankcard.


Processor

A transaction processor; a large computer center that processes data from credit card transactions and settles funds to merchants.


Purchase/Corporate Card

Credit Card issued by corporations or Government Agencies that allow their employees to purchase items under the companies expense. The process provides more thorough inventory tracking and faster funding. Cardholders may be limited to the dollar amount, type of merchandise, or establishment type. All prompts must be entered correctly and not bypassed to insure bank compliance.


Receipt

A hard copy description of the transaction that occurred at the point of sale. Minimum information contained on a receipt is: date, merchant name and location, account number, type of account used (e.g. Visa, MasterCard, AMEX, etc.), amount, reference number and/or authorization number, and action code.


Recurring Transaction

A transaction, for which permission has been granted by a cardholder to a merchant, that is periodically charged to the cardholder's account.


Referral

A message provided to an establishment in place of an authorization. The merchant calls the Voice AuthorizationCenter for further instruction.


Sales Draft

A document used as proof of purchase for goods or services by a cardholder.


Settlement

The process by which transactions with authorization codes are sent to processors for payment to merchants.


SIC/MCC Code

Refers to Standard Industry Classification. These codes are four digit numbers used to identify business type. See also Merchant Category Codes. See MCC/SIC Code List.


Swiped Card

Credit card information that is read into ICVerify directly as a result of swiping (or sliding) the credit card through a card reader. The information magnetically encoded in the magnetic stripe is transmitted. This information includes secret data that helps validate the card. Compare to Manual Entry.


T&E Card Travel and Entertainment

Credit cards that typically require payment in full each month (e.g. American Express, Diner's Club, and Carte Blanche).


Terminal Capture

Type of software in which transaction information is stored in the software, not at the host computer. Merchants using terminal capture must initiate settlement at the end of each day or shift. Compare to host capture.


TID

Refers to Terminal Identification Number. A number assigned to a terminal for programming purposes.


Valid Date

The date embossed by the card issuer on the credit card. An establishment can not accept a card for payment of goods or services prior to this date.


Visa

An association of banks that governs the issuing and acquiring of Visa credit card transactions.


Voice Auth

A transaction authorization that is provided by an operator, usually when an issuer sends a "Please Call" message to the merchant instead of an authorization number.


Void/Correction

The reversal of a current transaction, one that has been authorized but not settled. Settled transactions require processing of a credit in order to be refunded.