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Getting to Know the Terms

The credit card industry is full of acronyms and terms. Here are some important ones:

Term Definition
Acquiring Bank The merchant’s acquiring bank. Sometimes the same as the processor, this is the bank in the background that approves and underwrites the risk of the merchant account and provides funding.
Batch A group of credit card transactions processed for the day or a period of time.
Cardholder The customer that possesses the credit card.
Card Brands or Card Network The credit card brands that operate the network. These include Visa, Mastercard, American Express and Discover Card.
Card-not-present When the customer and their card is not physically in the merchant’s presence when a transaction is processed, such as an ecommerce transaction.
Card-present When the customer and their card are physically present for a transaction.
Chargeback An event where a customer files a complaint with their bank to be refunded a credit card transaction. This could be because their credit card was stolen, or they did not receive the purchased goods.
Credit Card Number The 15 or 16-digit credit card number, shown on the front of the card.
CVV/CVC/CVD The 3 or 4 digit security code, usually found on the back of the credit card.
Discount Rate The percentage (%) charged on each transaction as part of the processor’s payment fees. A confusing name, it comes from the fee-amount “discounted” from the transaction’s original total.
EMV/Chip and Pin EMV refers to the new credit card Chip standard. It standard for “Europay Mastercard Visa” who were the three cards that originally developed the technology.
Expiry Date The expiry date (formatted MMYY) of the credit card.
Issuing Bank The customer’s credit card bank. This is the bank that issued them the credit card.
Magnetic/Swipe Data The credit card information that is stored on the magnetic stripe (or magstripe) on the back of the credit card.
Merchant The business accepting the credit cards.
Merchant Account The account provided to a merchant that allows them to accept credit card payments.
Mobile Reader/Card Reader A device that allows credit and debit cards to be accepted when paired with another device, such as a phone, tablet or computer.
NFC In a payments context, NFC (Near Field Communication) refers to the technology that has recently been integrated into payment processing infrastructure (credit and debit cards, phones, wearable devices, as well as card readers and terminals) that allows for and facilitates contactless. These payments are sometimes referred to as Tap & Pay or, simply, tap.
PCI PCI-DSS stands for Payment Card Industry Data Security Standard. It is a set of rules enforced by the card brands for the safe-keeping and safe-transfer of sensitive credit card information.
Processor The credit card processor, providing the merchant account and the credit card processing service to the merchant.
Settlement When processed funds from credit card transactions are sent to the merchant’s bank account.
Terminal Either a credit and debit card machine, usually capable of processing Swipe and Chip & Pin transactions and printing receipts or the software used to process a payment, sometimes called a TID.
Tokenization A processor will store and encrypt a credit card and provide a token back to the merchant so that the card can be used at a later time without the merchant having to store sensitive credit card data.
Virtual Terminal A web-based software used to process keyed-in credit cards using a web-browser, mobile phone and/or computer.

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