Module 4

Glossary of terms for e-payments

0 A B C D E F H I M N O P R S T U V
  • 3-D Secure

    3-D Secure - The name for a group of protocols designed as an additional security layer for online credit and debit card transactions. Each of the major credit cards has its own version of the 3-D Secure protocols.

  • Acquirer

    A financial institution or Merchant Service Provider (MSP) that processes and operates credit card transactions for a business or other merchant customer.

  • Acceptor

    A merchant or other entity that accepts a payment instrument presented by a client in order to transfer funds to that merchant or other entity.

  • Acquiring processor

    Acquiring processor - The credit card processor that an acquirer uses so that the acquirer can offer merchants various credit services, including billing, reporting, clearing, and settling. so that the acquirer can offer merchants various credit services, including billing, reporting, clearing, and settling

  • Alternative Payments

    Refers to payment methods that are used as an alternative to credit card payments. Most alternative payments have been developed specifically for eCommerce. They can be stored value cards, digital wallets, and other alternative payment methods that are specific to geographic regions and target audiences.

  • API

    Application programming interface.

  • Authentication

    A security mechanism for verifying: 1) the identity of an individual or other entity (including verification by means of a computer or computer application); and 2) the level of authority of that person or entity (i.e. the ability of that person or entity to perform specific tasks or activities).

  • Authorization

    Process through which merchants request approval for a credit or debit card transaction from the customer's bank. The bank verifies if the account is active and has enough credit or funds to make the transaction.

  • Authorization Code

    The code assigned to the transaction once it has been approved by the processor.

  • Backup System

    A system designed to replace the primary system in the event of the primary system being unable to function for whatever reason.

  • Bank Identification Number (BIN)

    The first six digits of any credit card, debit card, or other similar financial instrument. A BIN can not only identify the bank from which the card was issued, but it can also identify the ACH network to which the card belongs.

  • Bill of exchange

    A written order from one party (the drawer) to another (the drawee) instructing it to pay a specified sum on demand or on a specified date to the drawer or a third party specified by the drawer. These are widely used to finance trade and, when discounted with a financial institution, to obtain credit.

  • Card Data / Customer Card Data

    At a minimum, card data includes the primary account number (PAN), and may also include the cardholder name and expiration date. The PAN is visible on the front of the card and encoded into the card’s magnetic stripe and/ or the embedded chip. Also referred to as cardholder data.

  • Card Issuer

    1) The financial institution or retailer that authorizes the issuance of a card to a consumer (or another organization), and is liable for the use of the card. The issuer retains full authority over the use of the card by the person to whom the card is issued. 2) Any bank or organization that issues, or causes to be issued, bankcards to those who apply for them. 3) Any organization that uses or issues a personal identification number (PIN).

  • Card Verification Code (CVC)

    A unique value calculated from the data encoded on the magnetic stripe of a card, validating card information during the authorization process.

  • CVC2/CVV2 (Card Verification Code and Card Verification Value)

    These are terms used for the codes printed on the cardholder signature panel following the full or partial account number as a security feature. When provided by the cardholder and contained in the authorization record, it allows the issuer to verify the physical presence of the card. Merchant has re-presentment rights and additional protection for specific chargeback codes when issuer approval and authentication of this value occur. Applicable to card-not-present transactions.

  • Card Verification Value (CVV)

    A unique value calculated from the data encoded on the magnetic stripe of a VISA card, validating card information during the authorization process.

  • CVV2 Status

    This value indicates the level of match between the CVV2 code entered on a transaction and the value that is on file with a customer’s credit card company. A code and narrative description are provided indicating the results returned by the processor.

  • Cardholder

    The person to whom a bank card is issued or an additional person authorized to use the card.

  • Chip

    A small square of thin semiconductor material, such as silicon, that has been chemically processed to have a specific set of electrical characteristics such as circuit storage, and/or logic elements.

  • Data Encryption Standard

    The method that is used to scramble a message or other data into a coded series of bits before transmission.

  • Debit

    A charge to a customer’s bank card account.

  • Debit Card

    Any card that primarily accesses a Deposit Account.

  • Digital payment token

    A digital representation of value backed by claims or assets denominated in euro or redeemable in euro, or referring to other digital assets that are accepted under the rules of an electronic payment instrument scheme for payment purposes or to discharge payment obligations in euro, and which enables the transfer of value between end users. Depending on the underlying design, digital payment tokens can be used to effect a transfer of value without necessarily involving a central third party and/or using payment accounts. The term digital payment token excludes the “tokenization” of sensitive data by a surrogate value which is conducted for security reasons to protect the original data and where the token does not represent an asset or claim recorded elsewhere.

  • Digital Wallets

    Digital wallets are online payment tools, usually in the form of a mobile app. Also known as an electronic wallet, e-wallet, or mobile wallet. The wallet securely stores virtual versions of payment information - including bank accounts, debit cards, and credit cards, so the customer doesn’t need to enter card details or carry a physical card at all to make payments.

  • EFTPOS terminal

    A terminal that captures payment information by electronic means and transmits such information either online or offline.

  • Electronic Banking

    A form of banking in which funds are transferred through an exchange of electronic signals between financial institutions, rather than an exchange of cash, checks or other negotiable instruments.

  • Electronic Bill Payment (E-Pay)

    An alternative to paper checks for paying bills. Consumers can use PCs, telephones, screen phones, or ATMs to send electronic instructions to their bank or bill payment provider to withdraw funds from their accounts and pay merchants. Payments may be made either electronically or by a paper check issued by the bill payment provider.

  • E-commerce

    The sale or purchase of goods or services through electronic transactions conducted via the internet or other computer-mediated networks.

  • Electronic Bill Presentment and Payment (EBPP; electronic invoicing)

    Process that companies use to collect payments electronically. It has become a core component of online banking at many financial institutions today. Other industries—including insurance providers, telecommunications companies, and utilities—depend on EBPP services as well.

  • Electronic money

    Electronic money (e-money) is broadly defined as an electronic store of monetary value on a device that may be widely used for making payments to entities other than the e-money issuer. The device acts as a prepaid bearer instrument which does not necessarily involve bank accounts in transactions.

  • Electronic payment instrument

    Umbrella term used to describe any physical or digital instrument that is used to make cashless transactions, facilitating the movement from the customer’s bank account to the merchant’s. Commonly used examples include Credit cards, Debit cards, Direct debits, Payment Service Providers (like Paypal), and E-wallets.

  • Electronic payment instrument scheme

    A set of formal, standardized, and common rules enabling the transfer of value between end users by means of electronic payment instruments. It is managed by a governance body.

  • Encryption

    The technique of scrambling data automatically in the terminal or computer before data is transmitted for security/anti-fraud purposes.

  • End-to-End Encryption

    Uninterrupted protection of the integrity and confidentiality of transmitted data by encoding it at the start and decoding it at the end of the transaction.

  • End User

    A natural or legal person making use of an electronic payment instrument governed by a scheme/arrangement for the transfer of value, in the capacity of the payer, payee, or both.

  • Firewall

    Hardware and/or software that protects network resources from unauthorized access. A firewall permits or denies communication between computers or networks with different security levels based on a set of rules and other criteria.

  • Hosting Provider

    Offers various services to merchants and other service providers, where their customers’ data is “hosted” or resident on the provider’s servers. Typical services include shared space for multiple merchants on a server, providing a dedicated server for one merchant, or web apps such as a website with “shopping cart” options.

  • Issuing Bank

    A bank or other financial institution that issues all kind of cards (debit, credit, prepaid, e-money) to customers. The terms “Card Issuing Bank” and “Issuer” are often used in place of Issuing Bank.

  • Malware

    Malicious software is designed to infiltrate a computer system to steal data or damage applications or the operating system. Such software typically enters a network during many business-approved activities such as via email or browsing websites. Malware examples include viruses, worms, Trojans (or Trojan horses), spyware, adware, and rootkits.

  • Merchant Bank

    A bank or financial institution that processes credit and/or debit card payments on behalf of merchants. Also called an “acquirer,” or “acquiring bank,”.

  • Mobile payment (m-payment)

    A payment where a mobile device is used at least for the initiation of the payment order and potentially also for the transfer of funds.

  • Mobile Payment Acceptance

    Using a mobile device to accept and process payment transactions. The mobile device is usually paired with a commercially available card-reader accessory.

  • Multi-Factor Authentication

    Method for authenticating a user when two or more factors are verified. These factors include something the user has (such as a smart card or dongle), something the user knows (such as a password, passphrase, or PIN), or something the user is or does (such as fingerprints, other forms of biometrics, etc.).

  • Net Payment

    Payment to the merchant for sales drafts with fewer credits minus the appropriate discount fee.

  • Net Revenue

    Discount income less interchange expense.

  • Net Settlement

    The settlement, through an actual transfer of funds, of the net effect of a series of financial transactions involving customers of two or more banks.

  • Notification of Change

    A notice is given to a merchant from a bank or another financial institution that signifies there was an error with some of the account information that was provided with a particular transaction. Notification of changes will include the correct account information.

  • Online card transaction

    A card transaction that is authorized following explicit approval by the issuer at the time of the transaction.

  • Online Payments

    The process of exchanging money electronically to pay for goods or services, using the internet, computer networks, and digitally stored value systems.

  • P2P Payment

    Peer-to-peer payment

  • Payer

    The party to a payment transaction that issues the payment order or agrees to the transfer of funds to the payee.

  • Payment

    In a strict sense, a payment is a transfer of funds that discharges an obligation on the part of a payer vis-à-vis a payee. However, in a technical or statistical sense, it is often used as a synonym for “transfer order”.

  • Payment Application

    Related to PA-DSS, a software application that stores, processes, or transmits cardholder data as part of the authorization or settlement of payment transactions.

  • Payment Application Vendor

    An entity that sells, distributes, or licenses a payment application to POS integrators/resellers for integration into merchant payment systems, or directly to merchants for their own installation and use.

  • Payment Card

    A payment instrument, which is based on the rules of a card scheme, used to withdraw or place cash and/or enable a transfer of value at the request of the payer (via the payee) or the payee in respect of an end-user account linked to the card.

  • Payment Gateway

    An electronic system that lets merchants submit payment transactions to payment processing networks. This system also gives merchants transaction reports, as well as management and billing services.

  • Payment Order

    An instruction sent by a payer or a payee to a payment service provider requesting the execution of a payment transaction.

  • Payment processor

    A payment processor is a company that manages the card transaction process, acting as a kind of mediator between the bank and the merchant. Put simply, the payment processor communicates information from the customer’s card to the merchant's bank and the customer’s bank. Assuming there are enough funds, the transaction goes through.

  • Payment service provider

    A natural or legal person providing services (e.g. issuing, acquiring, the authorization of transactions, the authentication of end users) enabling the transfer of value between end users. This also includes crypto-asset service providers when delivering services relating to digital payment tokens.

  • Payment service user

    A natural or legal person making use of a payment service in the capacity of the payer, payee, or both.

  • Payment System

    Encompasses the entire process for accepting card payments in a merchant retail location (including stores/shops and e-commerce storefronts) and may include a payment terminal, an electronic cash register, other devices or systems connected to the payment terminal (for example, Wi-Fi for connectivity or a PC used for inventory), servers with e-commerce components such as payment pages, and the connections out to a merchant bank.

  • PIN (Personal Identification Number)

    The confidential individual number or code used by a cardholder to authenticate card ownership for ATM or POS terminal transactions.

  • PIN Authorization Request

    A procedure enabling the issuer to validate cardholder identity by comparing the PIN to the account numbers.

  • PIN Verification

    A procedure utilized by or on behalf of the Issuer Participant to verify the identification of the Cardholder as a result of the use of the PIN upon receipt of a Transaction request.

  • Receipt

    A hard copy description of the transaction that took place at the point-of-sale, containing at a minimum: date, merchant name/location, primary account number, type of account accessed, amount, reference number, and an action code.

  • Receiver

    The individual, company, or institution that has given an originator permission to issue a refund or charge a transaction to their bank account.

  • Retailer

    In eCommerce terms, any business that accepts credit or debit cards, alternative payment methods, or digital wallets, as a source of payment. The retailer is the party that offers goods for sale or provides services in exchange for payment.

  • Secure Payment Page

    A secure payment page assures consumers that their payment information is encrypted for privacy and data integrity before it is sent over the Internet. This page is typically identified by the “s” in https:// (instead of http://). Payment gateway providers make this necessary eCommerce link possible by hosting the payment gateway software and individual secure payment pages on their own servers.

  • Security Code

    A three- or four-digit value printed onto the front or back signature panel of a payment card. This code is uniquely associated with an individual card and is used as an additional check to ensure that the card is in possession of the legitimate cardholder, typically during a card-not-present transaction. Also referred to as a card security code.

  • Service Provider

    A business entity that provides various services to merchants. Typically, these entities store, process, or transmit card data on behalf of another entity (such as a merchant) OR are managed service providers that provide managed firewalls, intrusion detection, hosting, and other IT-related services. Also called a “vendor.”

  • Seller or Online Seller

    An individual or business that sells products or services and can accept payment for products and services via a Seller account.

  • Shopping Cart Software

    Shopping cart software allows the cardholder to select items from an online store and place them in a virtual shopping basket or shopping cart. The shopping cart remembers which items are selected while the cardholder views other items within the virtual storefront, keeps a running total, and may calculate taxes and shipping. The items in the shopping cart are eventually ordered if the cardholder chooses.

  • Transaction

    Any event that causes a change in an organization’s financial position or net worth, resulting from normal activity. The advance of funds, purchase of goods at a retailer, or when a borrower activates a revolving line of credit. Activities affecting a deposit account are carried out at the request of the account owner. One example of a transaction is the process that takes place when a cardholder makes a purchase with a credit card.

  • Transaction Date

    The actual date on which a transaction occurs. Used in recording and tracking transactions.

  • Transaction Fees

    Service costs charged to a merchant on a per-transaction basis.

  • Transaction ID (Trans ID)

    Each transaction within the system is assigned a unique transaction ID. This ID may be used to sort or identify specific transactions within the system.

  • Transaction Status

    Each transaction within the system is given a unique status value to indicate the current processing state. A transaction status provides summary information regarding the state and subsequent actions that may be performed against a transaction. The following values may appear in the transaction status field: Authorized/ Pending Capture, Captured/Pending Settlement, Credit/ Pending Settlement, Declined, Voided, Credited, General Error, Communication Error, Settled Successfully, Under Review, Review Failed.

  • Transaction Type

    This value indicates the type of transaction entered and actions that may be associated with the transaction.

  • Unencrypted Data

    Any data that is readable without the need to decrypt it first. Also called “plaintext” and “clear text” data.

  • Vendor

    A business entity that supplies a merchant with a product or service needed for the course of business. Where services are offered, the vendor may be considered a service provider and may require access to physical locations or computer systems within the merchant environment that could affect the security of card data.

  • Verified by Visa®

    This is a program offered by Visa to increase security and reduce fraud on internet-initiated purchases. One of the 3-D Secure protocols. The merchant’s website interfaces with Visa to obtain the specified fields at the time of purchase. These values are then submitted with the authorization request to verify that this is an authentic cardholder purchase.

  • Virtual Payment Terminal

    Web-browser-based access to an acquirer, processor or third-party service provider website to authorize payment card transactions. Unlike physical terminals, virtual payment terminals do not read data directly from a payment card. The merchant manually enters payment card data via the securely connected web browser. Because payment card transactions are entered manually, virtual payment terminals are typically used instead of physical terminals in merchant environments with low transaction volumes.

  • Virtual Private Network (VPN)

    The VPN consists of virtual circuits within a larger network, such as the Internet, instead of direct connections by physical wires. The endpoints of the VPN “tunnel” through the larger network, which is done to create a private, secure connection.