Payment Industry Terms
Please find below a glossary of payment industry terms which we hope will be of use.
| Term | Description |
|---|---|
| 3D Secure (or 3DS) | 3DS is a fraud prevention measure that acts as an added layer of security to protect the merchant when taking card payments online. |
| Acquirer (or card acquirer) | A financial institution that provides card processing services to merchants. |
| Affinity Card | Affinity cards are credit cards that are linked to organisations such as charities, political parties and sports clubs. |
| AMEX | Credit cards issued by American Express. |
| ATV | Average Transaction Value. |
| AVS | An acronym for Address Verification Service - this confirms the billing address against the information on file for the cardholder and is used to provide an extra layer of protection to the merchant. |
| BACS | BACS is an acronym for Bankers’ Automated Clearing System. It is one of the UK’s inter-bank transfer facilities and is used to process electronic transactions and transfers. |
| Banking Window | A banking window is the period of time allocated to a card machine for any one trading day. Transactions processed after the cut-off time will be included in the next day's trading. |
| Basis Points | Basis points are the percentage charged on a card transaction. One basis point is equal to 1/100th of 1 percent. Thus a rate of 2.33% is equivalent to 233 basis points. For example, 75 basis points is equivalent to 0.75%. |
| BIN | The first 6 digits of a credit card number are known as the Issuer Identification Bank Identification Number (BIN). These identify the institution that issued the card to the card holder, now known as (IIN) Issuer Identification Number. |
| Captured Sale | A captured transaction is one that has been approved by the acquirer and has been captured ready for settlement. |
| Card category | Any of the following: debit card, credit card, commercial card, or a prepaid card. |
| Card Issuer | A financial institution that issues credit and debit cards to the public. |
| Card Issuing Company | A financial institution that issues credit and debit cards to the public. |
| Card Machine | A physical device for reading a credit card. Used interchangeably with "Card Reader", "Chip and PIN Machine", "PDQ" and "Card Terminal" |
| Card Reader | A physical device for reading a credit card. Used interchangeably with "Card Machine", "Chip and PIN Machine", "PDQ" and "Card Terminal" |
| Card Scheme | A network such as Visa, Mastercard, Amex, JCB etc that acts as a gateway between the card acquirer and the card issuer for the authorising and funding of transactions. |
| Card Scheme Regulations | Rules set by the Card Schemes that all card issuers and acquirers must adhere to. |
| Card Scheme Rules | Rules set by the Card Schemes that all card issuers and acquirers must adhere to. |
| Card Terminal | A physical device for reading a credit card. Used interchangeably with "Card Machine", "Chip and PIN Machine", "PDQ" and "Card Reader" |
| Cardholder | The owner of the card used to make a purchase. |
| CAV | Cardholder Authentication Value, also referred to as an Accountholder Authentication Value (AAV), Universal Card Authentication Field (UCAF) & Cardholder Authentication Verification Value (CAVV) - A unique value returned during the authorisation process |
| Ceiling Limit | A Ceiling Limit is the maximum transaction value that a card machine is able to process. |
| Chargeback | A chargeback is a transaction where a merchant may have initially received payment but the transaction is subsequently rejected by the cardholder or the card issuing company. |
| Chip and PIN | A credit/debit card verification technology which requires the holder of the card to enter their 4 digit PIN number before the card transaction can be processed |
| CNP | Cardholder not present. The name given to card transaction which occurs when the cardholder is not Infront of the merchant. It will always be a non Chip and PIN transaction. |
| Contactless | Contactless payments are transactions from credit cards, debit cards, or other devices including smartphones and other mobile devices, that use radio-frequency identification (RFID) or near field communication (NFC) for making secure payments. The transaction value limit for contactless payments is £30 per transaction. This was subsequently increased to £45 in the UK on 1 April 2020. |
| CP | Cardholder present - a type of transaction where the cardholder is present at the time of the transaction. |
| CSM | The Clearing and Settlement Mechanism is a set of rules and directives which constitute how money and messages are sent in a standardised manner between payment service providers. |
| CVM | Cardholder Verification Method is used to assess whether the individual presenting the payment device, (i.e. card or smartphone etc), is the actual cardholder. ‘No CVM’ in itself is a CVM method that the terminal and the card can support. |
| CVV | An acronym for Card Verification Value - it is the three-digit number printed in the signature space on the back of most credit cards. |
| DCC | An acronym for Dynamic Currency Conversion. DCC is a process whereby the amount of a card transaction is converted by a card acceptance device (e.g. card machine, ATM or virtual terminal) into the local currency of the cardholder at the point of sale. |
| Direct Debit | A direct debit is an instruction from an account holder to their bank, authorising a company to withdraw varying amounts of money. Direct Debits are used to ensure a payment can be made regularly, safely and efficiently. |
| Domestic transaction | Transactions processed where the merchant is based within the same country as the cardholder. |
| ECI | Electronic Commerce Indicator is a value returned during the authentication process to indicate the security level of a transaction. |
| Electronic Authorisation | The process used by a card acceptance device (e.g. card machine or virtual terminal) to obtain authorisation from a cardholder's issuing company that a card transaction due to be lodged against a card can proceed. |
| End of Day Banking (EODB) | A function a merchant can perform on their card machine whereby all transactions that have been taken since the previous total was run, are sent to the acquirer for settlement. |
| ePDQ | ePDQ is Barclaycard's online solution for accepting cards over the Internet. |
| Floor Limit | A Floor Limit is the value above which a card transactions must be electronically authorised before being processed. The floor limit is specified in a merchant's processing agreement with their acquirer. A merchant's floor limit will normally be set to zero. |
| Ghost Payment | A payment caused after an AVS or CV2 decline. Ghost Payments occur when a card issuer has authorised a transaction, however the transaction has been declined for some other reason e.g. not meeting the security requirements of the merchant. Funds relating to a ghost payment will not leave a cardholder's account however the value of the transaction may be reserved by the issuer for a number of days. |
| IBAN | The International Bank Account Number (IBAN) is an internationally agreed system of identifying bank accounts across national borders to facilitate the communication and processing of cross border transactions with a reduced risk of transcription errors. |
| IIN | The first 6 digits of a card number are known as the Issuer Identification Number (IIN), previously known as Bank Identification Number (BIN). These identify the institution that issued the card to the card holder. |
| Inter-regional transaction | Transactions which are not categorised as domestic or intra-regional transactions. For UK based merchants, inter-regional transactions are transactions with cardholders where the credit or debit card has been issued outside of the UK and outside of the European Region (as defined by the card schemes). |
| Interchange | Interchange is a fee paid between acquirers and issuers for the acceptance of card based transactions. Interchange is determined by a number of factors including the card type, location of the card issuer and the processing method used to accept the card transaction. |
| Intra-regional transaction | Transactions which don’t qualify as domestic transactions, however both the cardholder and the merchant are based within the European Region (as defined by the card scheme). |
| Issuer (or card issuer) | A financial institution that issues credit and debit cards to the public. |
| JCB | Japanese Credit Bureau - a type of credit card issued by the Japanese Credit Bureau based in Tokyo, Japan. |
| KYC | KYC is an acronym standing for Know Your Customer, or more commonly understood as forms of Identification and proof of address. |
| Magnetic-stripe Reader | The side swipe reader used to read a card when Chip & PIN is not an option. (Typically used for international card payments). |
| Merchant | The business accepting credit or debit card payments for products or services sold to the cardholder. |
| MID | Merchant ID - a unique number given to each merchant. |
| MOTO | An acronym for "Mail-order, Telephone order". A transaction processed by a merchant over the phone or by using card details sent by mail order (i.e. the cardholder is not present). |
| Non-secure transactions | Transactions are deemed non-secure when they are processed in a non-Chip & PIN environment and the address verification or CV2 details are unknown. An online transaction is deemed to be non-secure when 3D Secure is not enabled and or AVS/CV2 details are unknown. |
| Payment Service Provider (PSP) | A Payment Service Provider or PSP provides a range of payment methods (such as credit card acceptance, direct debit, bank transfer etc) to merchants who want to accept payments online. |
| PCI DSS | The Payment Card Industry Data Security Standard is a security standard which applies to any organisations that accepts card payments. The standard was introduced to help businesses process card payments securely and reduce card fraud. |
| PED | Commonly used acronym for a Chip and PIN machine, which stands for 'PIN Entry Device'. |
| PNI | Payment Network Indicator defines which card scheme a transaction applies to. |
| PWCB | An acronym for "Payment With Cash Back" relating to a configuration setting on a card machine. When enabled, a cardholder using a debit card to purchase goods or services may be offered up to £50 cash back, provided they are making a retail purchase and are present at the time of the transaction. |
| Referral | A referral occurs if a card transaction is being processed and the card issuer requests electronically (via the card machine) for the merchant to contact the issuer to obtain authorisation for the transaction. A referral request would normally be associated with a high value transaction. |
| Representment | Part of the chargeback process. Representment refers to the process used by an acquirer to provide additional information relating to a transaction which has been disputed by a cardholder or issuer. |
| Retrieval | Retrieval is the initial step of the chargeback process. Where a transaction has been challenged or disputed, the issuing bank requests a copy of the physical sales ticket for the transaction in question. |
| Retrieval Request | A card issuers request for a transaction receipt, which could include the original, a paper copy or fax, or an electronic version thereof. |
| SCA | Strong customer authentication (e.g. 3D Secure) |
| Scheme Fees | Scheme Fees are amounts paid by acquirers to the card schemes for their role in maintaining the card system. |
| SDWO | Staged Digital Wallet Operator - An entity that provides digital wallet services to customers, and processes payments between the customer and the card acceptor. |
| SecureCode | The Mastercard approved authentication product designed to allow Mastercard card issuers to authenticate individual electronic commerce transactions processed with either a Maestro card or a Mastercard card. |
| Shopping Cart | An e-commerce software package that allows customers on a website to select items to purchase. |
| TID | Terminal ID - a unique number given to each terminal or device which can accept a card payment. |
| Tokenisation | A service that protects cardholder data, substituting account details found on a credit/debit card with a series of numbers that can be used to authorise a payment without exposing actual account details. |
| Transaction Identifier | A unique 15 character value that Visa assigns to each transaction and returns to the acquirer in the authorisation response. Visa use this system to maintain an audit trail from the point of processing to completion and or chargeback. |
| UKCA | An acronym for UK Cards Association, the body that oversees payment clearing and money transmission services in the UK, as well as setting the industry compliance standards for data processing. |
| Unapproved transactions | Transactions processed on card types which haven't been approved by a merchant's acquirer. |
| UnionPay | China UnionPay, better known as UnionPay (or by its abbreviation, CUP) is a Chinese financial services corporation headquartered in Shanghai, China. It provides bank card services and is one of the major card schemes in China. |
| V PAY | V PAY is a European debit card issued by Visa Europe. |
| VBV | Verified by Visa, The Visa scheme designed to authenticate cardholders so that they cannot subsequently repudiate their use of a card to purchase goods. |
| Virtual Terminal (VT) or Virtual Card Machine | A Virtual Terminal is a web-based version of a traditional credit card machine which can be accessed securely from any Internet connected web-browser or device such as PC, tablet or smartphone. |
| Voice Authorisation | Authorisation by means of communication between a merchant and the card issuer. Voice Authorisation occurs when the card issuer requires additional information regarding a transaction before authorisation is provided and would typically occur when the transaction is deemed to be high-risk. |
