Glossary of Electronic Payments Industry Terms

Glossary of Electronic Payments Industry Terms

Term Definition
Account Number or Primary Account Number (PAN) The long number on a payment card that identifies the cardholder’s account.
ACH A U.S. bank network that moves money electronically between bank accounts.
Acquirer The bank (or its agent) that sets up a merchant to accept card payments and routes the transactions.
Acquiring Bank/Merchant Bank The bank that processes card payments for a merchant and deposits the funds.
Address Verification Service (AVS) A fraud check that compares the billing address entered at checkout with the address on file at the card issuer.
Adjustments Manual changes to a merchant’s account, such as fee corrections, chargeback reversals, or other credits/debits.
Affinity Card A card linked to a group (like a school or charity) where part of the revenue supports that group.
AMEX American Express, a card network and issuer.
ATM Interchange Fee A fee charged when a cardholder uses an ATM that isn’t owned by their bank.
Authorization The real-time approval step that checks if the card is valid and funds are available, and reserves the amount.
Average Ticket The average dollar amount of each transaction.
Bank Routing Number A 9-digit number that identifies a bank for ACH and wire transfers.
Bankcard A payment card issued by a bank, such as credit or debit cards on Visa or Mastercard.
Batch The set of transactions submitted together in one batch.
Batch Processing Grouping transactions together and sending them for processing at the end of a day or shift.
Business Day A day banks are open for processing (usually Monday–Friday, excluding holidays).
Capture Date The date a transaction is finalized and included in a batch for settlement.
Card Issuer The bank or company that issued the customer’s card.
Card Verification Code (CVC) The 3- or 4-digit security code on a card used to confirm the card is in hand.
Card Verification Value (CVV) Another name for the card security code used for verification (often the same as CVC).
Cardholder The person whose name is on the card and who is allowed to use it.
Cardholder Data Information from a payment card, like the card number and expiration date.
Cardholder Data Environment (CDE) The systems and networks that store, process, or transmit cardholder data.
Chargeback A reversal where the cardholder’s bank returns funds to the customer after a dispute.
Chargeback Period The time window when a cardholder can dispute a transaction.
Check Verification A service that checks whether an e-check is likely to be valid (for example, account status and history).
Chip The small computer chip in many cards that improves security (EMV).
Clearing Account A temporary account used to hold funds while transactions are being processed and settled.
Clearing Bank The bank that handles clearing—moving transaction data and funds between parties.
Compliance Meeting required rules and standards (like PCI DSS) for processing payments safely.
Counterfeit Card A fake or altered card used for fraud.
Credit Account An account that lets a customer borrow up to a limit and pay back later.
Credit Card A card that lets customers pay using borrowed funds from a credit account.
Credit Limit The maximum amount a customer can borrow on a credit account.
Daily Discount When processing fees are taken out of deposits each day instead of billed monthly.
Data Encryption Protecting data by turning it into unreadable code unless you have the key.
Database A structured system for storing and organizing data.
Debit Money taken out of an account; also a type of card that draws from a bank account.
Debit Card A card that pulls money directly from the customer’s bank account.
Debit Transaction A payment that withdraws funds from a bank account (often using a debit card).
Decline OR Declined A transaction the issuer or network does not approve (for example, insufficient funds or a fraud concern).
Deposit Account A bank account used to hold funds, like checking or savings.
Discount Rate The percentage fee charged on card transactions (a key part of processing costs).
Doing Business As (DBA) The public-facing name a business uses, which may differ from its legal name.
Downgrade When a transaction is charged a higher rate because it didn’t meet certain processing requirements.
E-Check An electronic check payment that uses bank account and routing numbers.
Electronic Bill Payment A service that lets customers pay bills electronically from a bank account.
Electronic Funds Transfer (EFT) An electronic transfer of money between accounts, including ACH and wire transfers.
EMV A global standard for chip-card payments (named after Europay, Mastercard, and Visa).
Encryption The process of encoding data to keep it private.
Financial Institution A bank, credit union, or similar organization that provides financial services.
Funding The deposit of processed payment amounts into the merchant’s settlement account.
Interchange The system that moves transaction data and funds between the merchant’s bank and the card issuer.
Interchange Fee A fee paid to the card issuer as part of processing a card transaction.
Internet Protocol Address (IP) A network address that identifies a device on the internet.
Issuer/Issuing Bank The bank or company that issued the customer’s card and approves transactions.
Magnetic Stripe The black stripe on the back of some cards that stores card data.
Member A bank or institution that belongs to a card network (like Visa or Mastercard).
Merchant A business or organization that accepts payments for goods or services.
Merchant Acquirer Another name for the acquiring bank or organization that enables a merchant to accept cards.
Merchant Agreement The contract between a merchant and a processor/acquirer that sets payment terms and fees.
Merchant Number A unique ID assigned to a merchant for processing card payments.
Monthly Discount When processing fees are deducted from the account monthly rather than daily.
Monthly Minimum A minimum monthly fee; if processing fees don’t reach it, the merchant pays the difference.
Net Payment The amount deposited after subtracting fees, refunds, and other adjustments.
Net Revenue Revenue after subtracting costs and fees.
Net Settlement The final amount moved between banks after all transactions in a period are netted together.
Non-Qualified Transactions that don’t meet certain criteria and are charged the highest processing rate.
Originator The party that starts an ACH transaction, such as a business or bank.
Paper A paper-based payment or record, such as a paper check or printed receipt.
Payment Card Industry Data Security Standard (PCI DSS) The security standard organizations follow when they store, process, or transmit card data.
Payment Gateway Software that securely sends payment information from a website/app to the processor.
PCI Short for the Payment Card Industry; often used to refer to PCI DSS security requirements.
PIN (Personal Identification Number) A secret number used to authorize certain debit card and ATM transactions.
PIN Pad A device where customers enter a PIN for debit transactions.
Point of Sale (POS) Where a sale happens, such as a checkout counter, and the tools used to take payment.
POS Terminal The card reader/device used at the point of sale to accept card payments.
Prepaid Cards Cards loaded with money in advance; you can spend up to the balance on the card.
Processor The company that handles card transaction processing between the merchant, networks, and banks.
Reason Code A code that explains why a transaction was declined, returned, or charged back.
Receipt A record of a payment showing what was paid and when.
Recurring Transaction A payment that repeats on a schedule, like monthly utilities or subscriptions.
Reference Number A unique number used to track a specific transaction.
Remittance Information Details that explain what a payment is for (invoice number, account number, etc.).
Retrieval A request for information about a transaction, often related to a dispute.
Sales Draft A record of a card sale (paper or electronic), sometimes used as proof in a dispute.
Scope The parts of your systems and processes that are covered by a requirement (like PCI scope).
Self-Assessment Questionnaire (SAQ) A self-check form used by merchants to document PCI DSS compliance.
Service Provider A third party that stores, processes, or transmits card data on behalf of a merchant.
Settlement The step where money from transactions is transferred and deposited into the merchant’s account.
Settlement Statement A report showing deposits, fees, and adjustments for a settlement period.
Shopping Cart Software Website software that lets customers add items and check out online.
Smart Card A card with an embedded chip that can store data and support secure transactions.
Standard Industry Code (SIC) A code that classifies a business by industry type.
Third-Party Processing When a separate company processes payments on behalf of a merchant.
Transaction Date The date the payment happened.
Transaction Fees Per-transaction charges for processing payments.
Virtual Payment Terminal or Virtual Terminal (VT) A web-based tool that lets staff manually enter payments (like phone orders) without a physical card reader.

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