Automated Clearing House. An electronic payment network used most often with direct deposit of payroll checks and recurring payments. Can also be used to clear electronic checks, as well as Demand Deposit Account (DDA) transactions.
An entity that accepts payments for a payments network. The transaction is routed through a number of locations, beginning with the POS at the merchant site, and then moves through a gateway in some instances. The final phases involve networks and issuer processors.
Method by which accounts are verified as having funds enough to facilitate transactions
How much is in an account to cover a payment request.
How much is in an account to cover a payment request.
Address Verification Service. Data used to ascertain consumer validity, such as address.
The only entities that can work with payments firms, such as Visa or Mastercard. Have the ability to offer their own cards. In addition, banks of all sizes are tied to moving money between accounts when transactions occur.
Also known as bips. One one-hundredth of a percent, measured against a transaction.
Bank Identification Number. The first several digits — typically the first four digits or first six digits — that are found on a card of an issuing or acquiring bank as unique identifiers.
A decentralized, digital currency not controlled by any company or government.
Back Office Conversion. Check conversion transactions that occur in the merchant's back office instead of in front of the consumer. Notice to the consumer that BOC will occur must be posted at the point of sale or other check receiving locations.
A technology that leverages a single-tap feature in order to make eCommerce easier for consumers. The key lure is direct shopping on a site or an app rather than going through links to get to the retailer who actually sells a desired product.
Bring Your Own Device. A growing trend of employees bringing their own smartphones, laptops or tablets to the office to facilitate work. There is some concern over the security issues present with the use of outside (personal) devices.
The methodology of completing authorizations and fund flows from merchants.
Consumer Financial Protection Bureau. A federal government agency that supervises banks, credit unions and other financial companies in the enforcement of federal consumer financial laws.
A disputed credit or offline debit card sale that is returned to the merchant bank for reimbursement of the cardholder's account. Chargebacks can be initiated by customers or by cardholders' banks.
Check Clearing for the 21st Century Act. Became federal law in 2005 to enable banks to handle checks electronically for faster and more efficient processing. Instead of physically moving paper checks from one bank to another, Check 21 allows banks to clear a printed copy of the original check as a "substitute" check, or IRD.
The exchange of financial information that eventually leads to reconciliation at the back end of a bank’s operations, via settlement.
A system where transactions are done only through a few locations, or parties, predefined.
Digital currency, such as bitcoin, that relies on codes and cryptography to create and distribute the currency.
Demand Deposit Account. A checking, savings or money market account where the customer has easy access to the funds in the account.
Alternate, electronic currency. Usually involves the internet or other computer network.
Applications that store a virtual copy of wallet content for use in online or offline payment transactions. PayPal and Apple Pay are examples of digital wallets.
A payment method in which funds are automatically transferred from the account that owes the funds to the account of the payee. Often used in payroll situations, where a "paycheck" is directly deposited into an employee's account.
Interest rates levied by banks that come in addition to interchange fees paid by merchants.
Direct Mobile Billing. A method of paying by charging the purchase to the user's cell phone account.
Electronic Check Acceptance. The process of electronically submitting and processing a paper check.
Electronic Check Conversion. Also known as ECP for Electronic Check Processing. Converts paper checks into an electronic payment for deposit. This can be used directly at the point of sale (POS) at a merchant's cash register or by a business that receives mailed-in checks. Electronic check conversion is a fast and easy way to batch checks and process payments.
Electronic Funds Transfer. A transfer of funds initiated electronically by computer, phone, terminal, ATM or magnetic tape. EFTs transfer money from one bank account directly to another without any paper money. Payroll direct deposits are examples of EFT transactions.
Europay Mastercard Visa. An almost global standard for chip-and-PIN cards (also known as smart cards) developed and backed by four of the major card brands. Europay Mastercard Visa has not yet achieved acceptance in the United States.
Federal Deposit Insurance Corporation. A United States government corporation operating as an independent agency created by the Glass-Steagall Act of 1933 during the Great Depression. It provides deposit insurance, which guarantees the security of deposits in member banks, up to $250,000 per deposit or per bank, as of January 2012.
Financial Institution. Includes banks, savings and loans, credit unions or other institutions compliant with national and state banking laws and capable of accepting deposits and extending credit.
A point of contact between merchants and the acquiring firms.
GENERAL PURPOSE CARD
A charge or credit card, such as American Express, Mastercard and Visa, that can be used at any store that accepts that card to buy any legal good or service.
Image Replacement Document. Also known as a substitute check. An electronic image of the original paper check that conforms to the requirements set forth by the Check Clearing for the 21st Century Act (Check 21). Because of Check 21, IRDs act as the legal equivalent of the original paper check and enable financial institutions to settle check transactions.
Independent Sales Organization. Can be a one-person operation or a large organization that sells merchant services on behalf of a single acquirer or several processors and acquiring banks. In addition to bankcard services, ISOs may sell payment equipment, check processing services, gift and loyalty cards and software.
Firms that work with rules governing payments. Firms that approve, or deny, requested transactions. The decision on a transaction is communicated at once to both networks and acquirers.
Issues the consumer a payment product – debit or credit card. Also facilitates processing of payments, paying merchants upon transaction approval.
Know Your Customer Verification. Compliance efforts that demand cardholders be verified at the time of transactions.
How much money is available in an account to be spent.
Mobile e-commerce. Refers to online purchases transacted using a handheld computer, smartphone or tablet.
From "malicious software." Intended specifically to damage or disrupt computers, computer systems, computer networks or mobile devices. Includes viruses, worms or spyware and may steal personal information in order to commit fraud.
Merchant Cash Advance. An agreement between a company and a merchant to have a percentage of the sales be directed to the company in exchange for a lump sum payment. Used by merchants who may have trouble obtaining a bank loan, thus the percentage of the MCA will be higher than the interest rate on a conventional loan.
Funds tied to loyalty programs offered by merchants.
Initial point of contact for consumers, and typically begin at the very place where a transaction occurs — and in a physical setting, or online. Can be just about anywhere, with the ability to accept different payment mechanisms, ranging from credit cards to debit cards.
Magnetic Ink Character Recognition. A character recognition technology used primarily by the banking industry to facilitate the processing of checks. Makes up the routing number and account number at the bottom of a check. The technology allows computers to read information (such as account numbers) off printed documents. Allows banks to easily process large numbers of checks.
An e-commerce transaction involving a very small sum of money.
Mobile Network Operator. A wireless service provider. AT&T and Verizon Wireless are example of MNOs.
Mail Order/Telephone Order. Also known as card-not-present (CNP) accounts. May have higher rates than POS accounts with the consumer present. Because the signature is not required, these accounts are generally higher risk.
National Automated Clearing House Association. Manages the development, administration and governance of the ACH Network. As a not-for-profit association, NACHA represents more than 10,000 financial institutions via 17 regional payments associations and direct membership.
Near Field Communication. A short-range wireless technology that is often used in mobile and electronic payment transactions.
Originating Depository Financial Institution. Institution that confirms that a transaction is in compliance with regulations and thus can proceed.
Seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone or in a brick-and-mortar store.
ONE-TIME USE VIRTUAL CARD
Virtual card numbers that are generated at the transaction level and are germane only to that transaction.
A check or draft that is in excess of the account balance.
Peer-to-peer or person-to-person. Payments by individuals to friends, family members and other individuals for goods and services.
Include the major card companies, such as Visa, Mastercard and American Express. Those companies have been behind the buildout of infrastructure that allows for payments across different rails that connect with all sides of a transaction.
Payment Card Industry. Standards designed to enhance payment account data security worldwide. Consists of 12 requirements governing security management, policies, procedures, network architecture, software design and other areas critical to the protection of cardholder data. Members of the payment card industry (financial institutions, credit card companies and merchants) must comply with these standards and failure to do so may result in fines or restriction from processing credit cards.
An email fraud scam conducted to gather personal, confidential or account information from an individual or business with the intent to steal personal or financial data.
Personal Identification Number. A unique numeric code chosen by a cardholder to ensure the security of the transaction.
Point Of Sale. Quite literally, the cash register. The place where retail sales occur, and payment transactions are initiated. POS systems offer more functionality than standalone POS terminals and can be tailored to specific business types, such as restaurants or grocery stores. May also be active in inventory control and analyzing trends and consumer behavior.
PRIVATE LABEL CARD
Cards issued and accepted only by a sole merchant.
Utilize NFC to enable payments to be made by mobile device at the point of sale. Consumers hold their mobile device close to the payment terminal, and the amount purchased is deducted from a prepaid account, a mobile account or a bank account.
Payment Service Provider.
Quick Response code. A two-dimensional barcode-like image that can be read by software on a smartphone, usually via a downloadable app, or a QR code scanner. Once scanned, QR codes connect users to mobile-optimized web pages for online information, including web sites, text, photos or videos. QR codes are a mobile-friendly way to direct people in an offline space to online resources.
Quick-Service Restaurant. Merchant category of restaurants, including fast food chains, with massive throughput and low-dollar transactions.
Re-Presented Check Entry. Used to resubmit a check that has been returned for non-sufficient funds (NSF). By resubmitting the check electronically, it has a better chance of being honored by the bank the second time through because it carries a higher priority than paper checks.
Remote Deposit Capture. An electronic check processing service that uses a digital image of a paper check for clearing and settlement. Remote deposit capture can be used to process checks with a desktop PC and a check imager. This is very useful to deposit checks at the merchant's location instead of going to the bank to deposit checks.
Receiving Depository Financial Institution. Manages ACH transactions by taking credits or debits from relevant parties.
Process through which funds both incoming and outgoing are matched up.
An agent or ISO that may sell products and an independent agent of another company.
The transfer of financial data in order to complete a requested transaction.
When consumers research a product in a store but purchase the product online, often at a large e-commerce site, such as Amazon.
Also referred to as interchange fees. Some of the costs that merchants pay the credit card network to process the transaction. These fees compensate for transaction-related costs and for settling and receiving funds. They usually range from 1-3 percent of a transaction.
Terminal Identifier. Identifies a physical terminal tied to a transaction.
A process to protect sensitive data, such as credit card account numbers, by replacing them with non-sensitive, alias values or "tokens" to reduce the amount of cardholder data in the environment.
Card used via online transaction on a one-time basis — post-transaction the card is rendered useless.