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Glossary

Acquiring bank: The bank that provides an e-commerce business with its credit card processing account. This bank sends credit card and purchase information from e-commerce transactions to a credit card association (such as Visa and MasterCard), which forwards it to the issuing bank.
Bank card: A plastic card that is widely accepted by merchants as a result of a standard set of rules for the authorization of its use, clearing, and settlement of transactions, used to credit an account for processing a sales transaction. The most common bank card is a credit card.
Capture: The submission of a credit card transaction for processing and settlement. POS terminals and real-time processing software capture transactions to submit to merchant account providers or credit card processors.
Cardholder: A person or company who has an active credit card account with which transactions can be processed.
Chargeback: A chargeback occurs when a card holder disputes a credit card transaction with his or her credit card issuer. The card issuer initiates a chargeback against the merchant account. The amount of the disputed transaction is immediately withdrawn from the merchant's bank account with NO POSSIBLE
NEGOCIATION. A chargeback fee is assessed to the merchant on top of the actual transaction. See also retrieval request here bellow.
Commerce server: A Web server that contains the software necessary for processing customer orders via the Web, including shopping cart programs, dynamic inventory databases, and online payment systems.
Credit card: A bank card establishing the privilege of the person to whom it is issued to present it as payment to a merchant; the card bearer must reimburse the credit card company the amount of the sale.
Credit card processors (or third-party processors): Merchant services providers that handle the details of processing credit card transactions between merchants, issuing banks, and merchant account providers.
Discount rate: A percentage fee paid to the merchant account provider or ISO for handling an electronic transaction.
e-commerce: The processing of economic transactions, such as buying and selling, through electronic communication. E-commerce often refers to transactions occurring on the Internet, such as credit card purchases at Web sites. See also Internet commerce.
EDC (electronic data capture): The use of a POS terminal for validating and submitting credit card transactions to a merchant account provider or other credit card processor.
Front end: The user interface that appears on a Web page and allows a visitor to the site to interact with dynamic features, including databases, shopping cart programs, and online purchase processing software.
Gateway: A device that connects two computer networks that use different protocols. It translates between protocols so that computers on the connected networks can exchange data.
Holdback: A portion of the revenue from a merchant's credit card transactions, held in reserve by the merchant account provider to cover possible disputed charges, chargeback fees, and other expenses. After a predetermined time, holdbacks are turned over to the merchant.
ISO (independent service organization): A firm or organization that offers to process online credit card transactions, usually in exchange for transaction fees or a percentage of sales. Merchants must generally establish a merchant account before contracting for ISO services, although some ISOs claim not to require separate merchant accounts.
Issuing bank: The bank that maintains the consumer's credit card account and must pay out to the merchant's account in a credit card purchase. The issuing bank then bills the customer for the debt.
MAP (merchant account provider): A bank or other institution that hosts merchant accounts and processes online credit card transactions. The term is also often used broadly to include any credit card processing service, including ISOs.
Merchant account: A bank account established by a merchant to receive the proceeds of credit card purchases. By establishing a merchant account, the merchant bank agrees to pay the merchant for valid credit card purchases in exchange for the right to collect on the debt owed by the consumer.
Merchant bank: A bank that holds a merchant account. After a consumer buys a product using a credit card, the merchant bank places funds into a merchant account in exchange for the right to collect on the debt owed by a consumer. See also merchant account provider.
Merchant services provider: A bank, ISO, or other firm that provides services for processing financial transactions, usually credit card sales. Many MSPs provide merchant accounts, while others require their clients to establish merchant accounts on their own.
Monthly minimum: The minimum amount in fees and percentages charged by a merchant services provider in a given month. If account activity does not generate the monthly minimum, the account holder must make up the difference.
MOTO discount rate (mail order / telephone order discount rate): The discount rate charged by the merchant account provider for credit card transaction in which the actual credit card was not available to the merchant.
Payment gateway: The code that transmits a customer's order to and from a merchant's bank's transaction-authorizing agent — usually a MAP (merchant account provider). See also payment gateway provider.
Payment gateway provider: A company that provides code and/or software for an e-commerce site to enable it to transfer information from its shopping cart to the acquiring bank, and on through the rest of the credit card transaction. See also payment gateway.
Recurring fees: Regular, usually monthly, charges for maintaining a merchant account. Recurring fees include the discount rate, transaction fees, statement fee, and monthly minimum.
Real-time processing: The verification and processing of credit card transactions immediately following a purchase. Real-time verification on the Web takes less than 2 minutes. Real-time verification is especially important for Web sites that sell products and services that consumers expect immediately, such as memberships to the site or software downloads.
Reserve account: See holdback.
Retrieval request: A retrieval request is what happens when a card holder cannot remember a credit card transaction, or the bank wants order information for some reason. The card issuer initiates a retrieval request, in which the merchant has 10 days to respond with the order information (Tthe merchant has 10 days in which to dispute the retrieval request with proof of purchase, signature, proof of delivery, etc) or the retrieval request will turn into a chargeback. There is a retrieval request fee issued against the merchant also in these cases.
SSL (secure socket layer): A system for encrypting data sent over the Internet, including e-commerce transactions and passwords. With SSL, client and server computers exchange public keys, allowing them to encode and decode their communication.
Secure server: A Web server or other computer connected to the Internet that is capable of establishing encrypted communication with clients, generally using SSL
Setup fees: Fees charged for establishing a merchant account, including application fees, software licensing fees, and equipment purchases.
Transaction fee: A charge for each credit card transaction, collected by the MAP (merchant account provider) or ISO.
Turnkey application: Software that requires no modification when inserted into a Web site.