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Working in the online economy can sometimes be a confusing place of acronyms
and complex terminology. We've put together a whole list of definitions
to help you understand what everyone's talking about.
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Acquiring Bank/Merchant Bank
The bank that does business with merchants who accept credit cards. A
merchant has an account with this bank and each day deposits the value
of the day's credit card sales. Acquirers buy (acquire) the merchant's
sales slips and credit the tickets' value to the merchant's account.
Acquiring Processor/Payment Processor
The processor provides credit card processing, billing, reporting and
settlement and operational services to acquiring and issuing banks. Many
financial institutions don't do their own bankcard processing because
it's more cost-effective to let someone like First Data Corporation (FDC)
invest in the equipment and people and do it for them.
American Express
An organization that issues cards and acquires transactions, unlike Visa
and MasterCard, which are bank associations.
Approval
An acceptance of a payment. Usually in the form of an authorization code
provided by the Issuing bank.
Authorization Capture
A payment capture method that is used by merchants who ship orders on
the same day that they receive orders. The payment is captured when the
merchant authorizes the credit card used by the customer.
Authentication Verifying
that a person is who he/she claims to be, or that an email message is
actually from the person or organization that claims to have sent the
message.
Authorization
The act of insuring that the cardholder has adequate funds available against
their line of credit. A positive authorization results in an authorization
code being generated, and those funds being set aside. The cardholder's
available credit limit is reduced by the authorized amount.
Authorization Code
a numerical or alphanumeric code sent by the card issuer verifying that
the sale has been authorized. The authorization may be obtained by voice,
software, or terminal transmission. The merchant should include the authorization
number on the sales draft to facilitate the authorization process.
Authorization Request
An electronic message sent from the Merchant's business to the customers
credit card issuing bank to request an authorization code for a sale transaction.
Authorization Response
An issuing bank's electronic message reply to an authorization request.
Bank
An institution that handles savings and checking accounts, issues loans
and credit, and deals in government and corporate issued securities.
Bank Account
An account that holds funds within a bank and is subject to additional
deposits and withdrawals.
Batch Settlement
Each time an order is placed, it is approved and added to a "batch". But
the funds have not actually been charged against the credit cards nor
transferred to the merchant's bank account. That happens when the business
manager accesses the Backoffice Order interface to first "capture" the
funds for orders in a batch and then to "settle" the batch. Capturing
the funds causes the credit cards to get charged and the funds to be transferred
to the merchant bank account.
Browser
A client to a web server that allows the user to read hypertext documents
on the World Wide Web. Netscape Navigator and Microsoft Internet Explorer
are examples of popular web browsers.
Business Community
a central point where buyers and sellers can engage in electronic commerce,
or build and manage an online business. http://www.ecplace.com is a free
Business Community index that Multiactive Software provides free of charge
to all ecBuilder merchants.
Capture
The act of converting the authorization amount into a billable transaction
record. Transactions cannot be captured unless previously authorized,
and authorizations should not be captured until the goods or services
have been shipped or transmitted to the consumer.
Cardholder
Any person who opens a credit card account and makes purchases using a
credit card.
Cash
Money in the form of paper or coin that is readily available for use as
a medium of exchange.
Certificate
An electronic affidavit, issued by a trusted organization, like a bank,
that vouches for the identity and the authority of an individual or business
to conduct any transaction over the Internet.
Certificate Authority
A Certificate Authority can be an issuer of Security Certificates used
in SSL connections, as well as a trusted third-party organization that
can verify the identity and origin of a person or organization. These
institutions issue digital certificates directly to end-users or to other
certificate authorities allowing them to also issue digital certificates.
A certificate authority, such as Thawte or VeriSign, vouches for the identity
and the authority of an individual or business to conduct transactions
over the Internet.
Chargeback
The process of taking back, or debiting, the merchant's credit card funds
after the funds have been paid to the merchant. This occurs when a customer
disputes a credit card transaction. The merchant must respond to the charge
back and provide proof that the product or service was provided to the
customer.
Checking account
A bank account that the account holder can draw checks against without
giving prior notice or having a passbook.
Clearing
The process a check goes through to validate and transfer funds between
banks. An electronic check will clear in the same manner as a paper check.
Common Gateway Interface (CGI) Script
A computer program that allows web servers to forward requests for processing
to other programs, which then return their results to the web server.
Connection Establishing
contact with a remote computer.
Consumer
A person who purchases goods and services.
Credit
The extension of funds issued by a bank that allows a consumer to purchase
goods or services from a merchant. The consumer then pays back the bank
either in full or in installments, at an interest rate determined by the
bank.
Credit card
A bank-issued card that allows consumers to purchase goods or services
from a merchant on credit.
Credit card gateway
A reference to both the actual machine and the company hosting the credit
card gateway server, acting as a middleman between the ecBuilder merchant
and the merchant bank. The Credit Card Gateway passes data between the
merchants business Web site and the banks.
Credit Deposit
The value of a merchant's credit card purchases that are credited to its
bank account after the acquirer buys the merchant's sales slips. The deposit
is credited. It is not funded until the acquirer gets the monetary value
from the issuer during settlement.
DDA Demand Deposit Account
A bank account, such as a checking account, that allows the holder to
withdraw funds or use funds for payment upon demand.
Debit
The process of subtracting from the balance of an account.
Debit Card
An ATM bankcard. This type of card allows a merchant to deduct money directly
from a customer's bank account.
Decrypt
The process of converting encrypted data or text back to plain data or
text.
Denial
When permission to perform a particular action has been declined.
DES
Data Encryption Standard
Digital Cash
Money, in the form of information, that can be stored in electronic wallets
or on smart cards. Digital cash systems have been designed for use on
the Internet for so-called "micropayments" - payments for goods that are
too inexpensive to be paid for by credit cards.
Digital Certificate
A digital certificate is a special kind of message that contains information
about who it belongs to, who it was issued by, a unique serial number
or other unique identification, valid dates, and an encrypted "fingerprint"
that can be used to verify the contents of the certificate. Digital certificates
are issued by trusted third parties, known as Certificate Authorities.
The public key of the ecBuilder merchant's digital certificate is used
to encrypt the shopper's order information before it is emailed to him.
Digital Signature
A way to ensure whether a message was actually sent by the person who
claimed to have sent it. The sender's private key encrypts the signature,
and the recipient decrypts the signature with the sender's public key.
Digital signatures use public key cryptography and work in conjunction
with certificates
Discount Rate
A percentage rate that is charged by the acquiring bank for processing
a merchant's transaction. The type of business and/or how the credit card
is processed usually determine this rate. Retail based transactions, also
known as Card Present transactions are assigned lower discount rates than
MO/TO, also known as Mail Order/Telephone Order, Internet, or Card Not
Present transactions.
Download
The transfer of data from a host computer to a client computer over a
network, in this case, the Internet.
Drop-shipping
An arrangement whereby a mail-order or Internet merchant accepts orders
for products, and then pays a manufacturer or distributor to ship the
product to the customer.
EFT Electronic Funds Transfer
A method of crediting or debiting an account through electronic means.
Eliminating the need for paper, such as a check or withdrawal slip.
Electronic Check
An electronic version of the traditional paper check. It includes all
the components of a paper check and can be used as a method of payment
on the Internet. Currently the Payment Gateways that are integrated with
ecBuilder do not support Electronic Checks.
Electronic Check Security
A combination of state of the art technology and established business
practices to prevent fraud on electronic checks. Electronic check pilots
are currently being conducted using a combination of technology tools,
data encryption, digital signatures, certificates, secure e-mail and smart
card technology to ensure that the security of the system is not compromised.
Electronic Check Verification
The validation of an electronic check using certificates and digital signatures.
Once the electronic check is deposited, the bank will perform additional
verification against internal databases.
Electronic Wallet
Also called a virtual wallet, a software mechanism that allows commerce
server users to store and use credit card and electronic payment information.
Typically, information in the wallet is encrypted and is persistent from
session to session. Currently the Payment Gateways that are integrated
with ecBuilder do not support the use of Electronic Wallets
Encryption
The process of scrambling a message to ensure data secrecy. The message
is encoded using an electronic key, which makes it unintelligible to anyone
except to the holders of the other half of the key. There are two main
types of encryption methods, private key and public key encryption.
Financial Institution
An institution that obtains capital from individuals, businesses, and
other organizations and invests it in various financial assets.
Funds
availability The amount of money available for a consumer to use to make
purchases.
Gateway
A device that allows for the translation and management of communication
between networks that use different protocols or designs.
Hard goods
Tangible products that are distributed through the postal or other delivery
service. Contrasts with soft goods, which are distributed electronically.
Helper Application
A software application that supports another software application. For
example, the ecOrderDesk is a helper application ecBuilder.
Host
A computer running Internet protocols that can act as either a client
or a server on the Internet.
Host capture
A credit card processing model where the authorization and capture of
the transaction data are accomplished within a single message sent to
the payment processor.
HTML HyperText Markup Language
The formatting or document description language use to create World Wide
Web pages.
HTTP HyperText Transfer Protocol
Allows for the exchange of HTML documents over the World Wide Web.
HTTP proxy server
A server that forwards client requests using the HyperText Transfer Protocol
(HTTP) over the World Wide Web.
Imprint
An imprint of a customer's credit card can be electronic, swiping the
card through a credit card terminal, or manual, taking a physical impression
of the credit card. Either of these two methods is required to prove the
customer's credit card was present.
Incentive
A reduction in price given to customers after a purchase has been made.
Integration
The act of combining or coordinating several parts or elements into an
entire whole. For example, the Cardservie International payment-processing
engine is integrated with the ecBuilder Web site creation software.
Interchange
The exchange of information, transaction data and money among banks. Interchange
systems are managed by associations like Visa and MasterCard, and are
very standardized so banks and merchants worldwide can use them.
Interchange Fee
A fee paid by the acquiring bank/merchant bank to the issuing bank. The
fee is meant to compensates the issuer for the time after settlement with
the acquiring bank/merchant bank and before it recoups the settlement
value from the cardholder.
Internet
The Internet is the world's largest computer network; it is essentially
a network of networks. Any device attached to the Internet can communicate
with any other device on the network. Some uses of the Internet include
sending and receiving email, browsing web sites, and increasingly, the
buying and selling of goods and services.
Internet merchant
A business owner who sells products or services over the Internet.
IP Address
A unique number that is assigned to any device connected to the Internet.
ISO Independent Sales Organization
An organization that performs merchant solicitation, sales or service
on behalf of financial institutions and/or processors.
Issuer
The bank that extends credit to customers through bankcard accounts. The
bank issues the credit card and receives the cardholder's payment at the
end of the billing period. Also called the issuing bank or the cardholder
bank.
Issuing
The act of providing a bank card to a cardholder and authorizing them
to use it to make financial transactions
Key pair
The use of the public and private key together. The public key is used
to exchange and encrypt the private key.
Link
means a URL hidden behind a formatting option that may take the form of
a colored item of text, logo or image, and which allows a user to automatically
move between WWW pages, WWW sites or within a WWW document.
Logs
Records of network activities. These activities can include access records,
errors, and financial transactions.
Mall
A group of businesses, usually retail, that have individual managements,
but are also managed under one administrator. Online malls are virtual
malls, and may consist of one business under individual management. ecPlace
is an example of an online mall.
Manual Entry
The entering of credit card information via computer keyboard or terminal
keypad instead of swiping the card through a credit card reader terminal.
ecOrderDesk support the act of manually entering a customers credit card
information for processing directly against a payment gateway.
MasterCard
An association of banks that governs the issuing and acquiring of MasterCard
transactions.
Merchant
Any business that agrees to accept credit cards and debit cards in exchange
for goods or services. In terms of Internet Commerce, a merchant is any
Web site that is selling physical goods, services, or digital content
to consumers or other businesses.
Merchant Account
A written, commercial bank account established by contractual agreement
between a merchant/business and a bank and/or a payment gateway. The agreement
contains the respective rights, warranties, and duties with respect to
accepting bankcards like Visa or MasterCard. You must apply for this account
directly from your bank, or from the Payment Processor.
Merchant ID
A unique set of numbers or letters and numbers that is associated with
a specific merchant. The merchant ID is typically tied to a system database
record that contains all merchant specific information regarding that
particular merchant. This is provided by the bank or the Payment Processor.
Merchant Service Agreement
A contract that outlines the terms for accepting and processing credit
cards between an acquiring bank and/or payment gateway company, and the
merchant.
Message
Information sent and received that communicates various parts of a transaction.
Micropayments
Payments, usually in very small amounts (< $3.00) for goods purchased
over the Internet.
MO/TO
Refers to Mail Order / Telephone Order sales where the customer's card
is not present at the time of transaction.
Money
A means of payment or a measure of value.
Network
The setup of hardware and software that allows multiple computers to connect
and communicate with each other electronically. The Internet is by far
and away the largest network in the world.
Nexus
A seller's minimum level of physical presence within a state that permits
the taxing authority to require the seller to register, collect and remit
sales/use tax and comply with the Country's, Province's, State's and/or
County's taxing statutes and regulations.
Offline capture
A payment capture method used by merchants who ship an order one or more
days after they receive it. The payment is captured when the merchant
ships the order and sends a post-authorization message to the payment
processor.
Online
A computer or user is online when connected to a network or server that
allows communication flow between computers.
Online capture
A payment capture method used by merchants who ship an order on the same
day that they receive it. The payment is captured when the credit card
is authorized.
Online Store
A web site that accepts direct payments in exchange for goods and services.
Password
A sequence of characters paired with a user name that assures only the
user with that password can log on with the particular user name associated
with it.
Payment Capture
A method used to receive payment. This method is determined by the merchant's
bank and/or payment processor.
Payment Gateway
A combination of software and hardware that provides an interface to the
bank card processing network.
Payment Methods
a means for accepting payment. The most common are credit card, electronic
check, phone charge, corporate account, and invoice.
Payment Processor
A financial institution distinct from the bank that processes data from
credit card transactions. Providing pre-authorization, post-authorization,
and refund services to businesses accepting credit cards. They are responsible
for the distribution of funds between consumers and businesses. Sometimes
also referred to as a Transaction Processor.
Private Key Encryption
An encryption system that uses two private keys for encrypting and decrypting
messages. Both parties must have a secret key to decrypt a message encrypted
by the other. The drawback with this method of encryption is in the difficulty
of distributing the private keys.
Processor
A transaction processor, distinct from the bank, that processes data from
credit card transactions and then distributes funds from the merchant's
bank account.
Public-Key Encryption
An encryption system that uses two keys, a public key for encrypting messages
and a private key for decrypting messages, to enable users to verify each
other's messages without exchanging secret keys. ecBuilder uses Public
Key technology.
Purchase
The act of providing a payment in exchange for a product or service.
Queries
Inquiries that are performed about transactions, databases, or other records.
Real-Time
An activity which occurs "while you wait", rather than being delayed for
processing at a later time.
Reconciliation
The act of balancing debits, credits, and totals between two systems.
Recurring Transaction
A credit card transaction permitted by a customer that is periodically
charged to the customer's account on a weekly, monthly, or quarterly basis.
Refund
A return of funds to a consumer for a returned product.
Registration
An entry of personal information in a formal record. When customers shop
at your online business, they will have the opportunity to register as
a member of your online business. The registration usually consists of
user name, password, billing/shipping address, and e-mail address.
Reseller
A person who is authorized to sell someone else's goods and/or services.
Response
A reply, answer, or additional message that is returned to a sender.
Retrieval Request
A request by a bank to a merchant for documentation concerning a transaction.
Usually regarding a customer dispute or an improper sale or return. A
retrieval request can lead to a chargeback. See "Chargeback".
Return
A transaction in which a consumer wants to return a purchase and receive
his/her money back. (Contrast with void.)
RSA
A method of public key encryption developed by Rivest, Shamir, and Adelman
at the Massachusetts Institute of Technology which is sold by RSA Data
Security Inc. RSA technology is one of the most popular public key encryption
technologies currently available.
Security
Measures taken to keep something protected or safe from viewing, destruction,
or manipulation.
Security Certificate
A chunk of information (often stored as a text file) that is used by the
SSL protocol to establish a secure connection. A Security Certificate
contains information about whom it belongs to, who it was issued by, a
unique serial number or other unique identification, valid dates, and
an encrypted "fingerprint" that can be used to verify the contents of
the certificate. In order for an SSL connection to be created both sides
must have a valid Security Certificate (also called a "Digital ID").
Server
A computer or software program that provides services such as email and
World-Wide Web access to clients on a network.
Session
In terms of the payment system, a session manages the exchange of money.
SET Secure Electronic Transaction
A standard electronic transmission security format developed by Visa/MasterCard
which uses a combination of encryption, digital signatures, certificates
and third-party validation for secure credit card transactions over the
Internet.
Settlement
A process in which an electronic transaction (credit cards) is accepted
for financial settlement between the acquiring and issuing banks. S-HTTP
Secure HyperText Transfer Protocol - A secure version of HTTP, developed
by Netscape, which provides general transaction security services over
the Web.
SKU
This is referred to as a stock keeping unit which is a specific number
designating one specific product.
Smart Card
A credit-card sized tamper resistant plastic card that contains a microprocessor
that can store and process data.
Soft goods
Soft goods are products that can be distributed electronically. Examples
of soft goods, also known as digital goods, include software, music files,
images, or any other type of data that can be sent electronically from
one computer to another.
Software
license A document that verifies a person has permission to use a software
program.
SSL
A protocol first designed by Netscape Communications to enable encrypted,
authenticated communications across the Internet. SSL is used mostly,
but not exclusively, in communications between web browsers and web servers.
URLs that begin with "http" indicate that an SSL connection will be used.
SSL provides 3 important things: Privacy, Authentication, and Message
Integrity. In an SSL connection each side of the connection must have
a Security Certificate, which each side's software sends to the other.
Each side then encrypts what it sends using information from both its
own and the other side's Certificate, ensuring the authenticity of the
message's origin, that only the intended recipient can de-crypt it, and
that the data has not been tampered with. ecBuilder provides for an SSL
connection between the shopper's browser and the merchants' web site.
Swiped Card
Credit card information that is electronically entered into a computerized
system by swiping the credit card through a card reader or terminal.
Tax Class
Defines the type of taxes that are being applied i.e. G.S.T, VAT, Federal,
State, or County tax.
Tax Jurisdiction
Defines a geographic area that has it's own distinct set of tax rules
and regulations i.e. a Country, a State, a City, a Municipal, or a County.
TCP/IP Transmission Control Protocol/Internet Protocol. A suite
of computer communication protocols that connect networks and allows them
to communicate with each other. TCP verifies data transmission between
a client and a server. IP moves the data to the appropriate node on a
network. TCP/IP is the primary transmission protocol used on the Internet.
Ticket
Another name for the sales slip or its monetary value that results when
a credit card purchase is made.
Transaction
The process that takes place when a cardholder makes a purchase with a
credit card.
Transaction Fee
A per transaction amount charged by the bank for processing each transaction.
This amount is in addition to the discount rate. For example: a discount
rate of 2.25% plus 15 cents per transaction.
URL Uniform Resource Locator
A method of identifying a document or resource on the Internet. A web
page address.
Visa
An association of banks that govern the issuing and acquiring of Visa
credit card transactions.
Voice Authorization
When a merchant makes a telephone call to obtain a credit card authorization
rather than using a terminal, or credit card software to obtain the authorization.
The merchant must, in addition to the voice authorization, submit the
credit card information via telephone, terminal, or software to close
out the transaction and transfer the funds to the their bank account.
Void
The act of canceling a purchase. There is only a small period of time
in which a purchase can be canceled. Voids are typically handled by issuing
credit to the consumer's account.
Alphabetical Listing:
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B
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QUESTIONS? WE HAVE ANSWERS |
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| Have questions about our merchant accounts
or the merchant account application?
Please call Customer Service at 570-686-2300 and speak to a Merchant
Account Specialist. |
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