The 3-D Secure™ protocol
was developed by Visa to improve the security of
Internet payments. The protocol is offered with
the service name Verified
by Visa. MasterCard has also adapted a similar
protocol called MasterCard
SecureCode. Both are designed to allow authentication
of cardholders by their Issuers at participating
Aggregated processing lets you accept payments
without a merchant account of your own. Instead,
the acquiring bank lets you use their merchant
account under their own terms of service. Please
also see Third party processing
The Address Verification Service
(AVS) enables the address, including postcode, entered
by the shopper to be compared against the UK card
CVV / CVV2 Code
AKA "The 3 digit
number on the back of the card" - A card security
code (CSC), often called card verification value (CVV
or CVV2) are different terms for a security feature
for "card not present" payment card transactions.
The card security code is located on the back of MasterCard,
Visa and Discover credit or debit cards and is typically
a separate group of 3 digits to the right of the signature
Cookies are data files written
to your hard drive by some Web sites when you
view them in your browser. These files can contain
information the site can use to track such things
as passwords, lists of pages you've visited, browsing
habits or can store information from
a shopping cart.
When a user sends email or points
a browser to an Internet domain such as web-merchant.co.uk,
the DNS translates
the names into Internet addresses (123.456.78.9).
The term refers to two definitions: naming hosts and
how domain names are handled on the Internet.
A payment gateway
provides a secure connection between your online shopping
cart (or other website
where payments are taken) and your internet
merchant account. A Gateway fee is applied by
the transaction processor to cover the costs of receiving
and processing the transaction.
Interchange is the money transferred from the acquiring
bank to the issuing bank for each card transaction.
Interchange fees account for the majority of credit
card processing costs and are established by the card
brands (Visa, MasterCard, Discover). However there
are instances where the interchange fee is paid from
the issuer to acquirer, often called reverse interchange.
Interchange Plus Pricing
Interchange plus is the term used to describe a merchant
account pricing model where a fixed markup is applied
directly to interchange fees published by Visa, MC
Interchange = Credit card processing rates set by
the card brand (Visa, MasterCard
Plus = Refers to the processor's markup that's applied
to each credit card transaction (typically expressed
as basis points)
Interchange Plus Plus Pricing
Interchange Plus Plus pricing works by adding a constant,
flat margin on top of Interchange and Scheme Fees.
So typically, Interchange Plus Plus pricing models
will also be written in the three component format,
with a percentage fee and per-transaction fee above
Interchange and Scheme Fees.
If you are unable to qualify for a direct internet
merchant account, you can still process credit card
transactions using an account issued to you by an
Internet Payment Service Provider (IPSP). An IPSP
is a payments organization that can issue accounts
for payment processing without going through an acquiring
An ISO (Independent Sales Organisation) is an organization
that is not an Association member (meaning not a Visa
or MasterCard member bank), but which has a bank card
relationship with an actual Association member. Such
a relationship can involve various things, such as
acquiring or issuing functions.
A Merchant Category Code (MCC) is a four-digit number
assigned to a business by MasterCard or VISA when
the business starts accepting one of these cards as
a form of payment. The MCC is used to classify
the business by goods or services it provides
Merchant Service Charge – a charge paid by
a merchant to their acquirer, calculated as a percentage
of credit card turnover for card transactions or a
fixed charge per transaction for debit cards.
The multi-currency processing system enables you
to offer your products, and to receive payment, in
many different currencies. Our standard
merchant account sets up GBP, US Dollar and Euro
as standard and for FREE.
Point of Sale (sometimes meaning Point of Service).
Typically the physical location at which a merchant
is sited and where card transactions are conducted
- see also VPoS
A retrieval request, also known as a Request for
Information (RFI) is raised by a credit card issuer
when a cardholder disputes a transaction
on their statement. This usually occurs when they
don't recognise the transaction and need more information
to work out whether they made it, or if it was fraudulent
or unauthorised. If you don't respond in time, it
may become a chargeback.
The amount of time from someone paying you online
via a credit or debit card to getting your money put
(settled) into your chosen bank account.
Commands and/or code that can be integrated into
HTML pages which are processed by the server when
users request a file/page. It is commonly used to
display content in the header or footer areas of web
pages which allow you to make one page or content
and share it among many and/or all pages of the website.
Credit cards charge a percentage of the sale for
use and this amount is referred to as a transaction
The term basis point is thrown around a lot in
the credit card processing industry, but many
sales people fail to realize that most people
aren't quite sure exactly what a basis point is.
Basis points are percentage points of a sale a
merchant pays on every purchase made with a credit
card to the acquiring bank. One basis point is
equal to one hundredth of one percent (0.01%)
For example a transaction rate of 1.6% is 160
The BIN (Bank Identifying Number) is the first four
to six digits of a credit card. The bank identification
number identifies the institution issuing the card
(Visa, MasterCard, Amex etc.). It is critical to the
correct matching of transactions to the issuer of
the charge card.
A chargeback is the
result when a merchant's credit card customer successfully
disputes a transaction on their bill. Disputes typically
arise from the customers
dissatisfaction with the merchandise
or services received.
A DMA (direct merchant account) is a merchant account
you already have direct with a bank or PSP (payment
Dynamic currency conversion
Dynamic currency conversion (DCC) is a financial service
in which credit card holders, when making a payment
in a foreign country, have the cost of a transaction
converted to their home currency at the point of sale.
DCC allows customers to see the amount their card
will be charged, expressed in their home currency.
The currency conversion is done by the
merchant or his representative card processor at the
point of sale instead of by the credit card company
when the account is charged
AKA eCommece (Electronic Commerce) is basically doing
business online. Most times the site will integrate
a shopping cart, SSL certificate, and a merchant
account to process payments.
An algorithm used to scramble data which makes it
unreadable to everyone except the recipient. This
is often used by e-commerce
sites to secure credit card data. Secure sites
This is a unique string of numbers that identifies
a computer or server on the Internet. These numbers
are normally shown in groups separated by periods.
Example: 188.8.131.52 is Googles IP address.
Hosting accounts for websites
can have either a shared or unique IP address.
Know Your Customer (or ‘KYC’) is the
due diligence that financial institutions and other
regulated companies must perform to identify their
clients and ascertain relevant information pertinent
to doing financial business with them. KYC policies
have become increasingly important globally to prevent
identity theft, fraud, money laundering and terrorist
A Merchant Account
is an account opened through a bank that is a member
of the Visa, MasterCard, or other credit card network
which allows merchants to accept credit cards from
purchasers. The funds are then transferred
electronically to the merchants bank account.
For a business to accept online payments they need
a Merchant ID. This number identifies the merchants
specific bank account of which credit card funds are
Facilitating geo-location technologies, Multi-Currency
Conversion can automatically deliver country-specific
currencies or redirect to country-specific websites.
Multi-Currency Conversion enables merchants identify
a credit card's country of origin and offer the customer
a choice between their home currency or the merchant's
local currency. The Multi-Currency Conversion solution
immediately accesses current exchange rates and calculates
prices in the requested currency. The buyer then selects
the transaction currency of choice and final settlement
will occur in the merchant's home currency.
In order to have payments from your web site processed
by the credit card networks you will have to apply
to an approved Payment Service Provider, known as
a 'PSP' Their function is to integrate your e-commerce
enabled web site with the international credit card
networks so that orders generated by your chosen 'shopping
cart' software can be authorised and payment collected
for you. This payment will be transferred to your
for payment into your bank account.
The rolling reserve holds a percentage (5 - 10%)
of total approved gross transactions over the previous
six month period. Following the seventh month of operation
(and every month thereafter) the reserves generated
from the first month of operation (and every month
thereafter) will be forwarded to the merchant of each
sale for a specified period, after which time it is
paid to you.
SQL (Structured Query Language), pronounced "sequel,"
not "squeal." SQL is used to construct database
queries and manipulate data help within relational
databases. It was developed by IBM.
Encryption method for transferring data between a
client and server (Secure Socket Layer)
If the acquiring bank ends the processing contract
with the merchant on negative terms (not simply because
of a change of policy), it is most likely that the
account will be terminated. A TMF merchant account
also known as a terminated merchant facility is the
worst thing that can happen to your business. If your
merchant account comes under a “TMF” it
means that your account has been blacklisted and will
remain so for a minimum of 5 years.
Virtual Terminal (VT)
Similar to the terminals
used in stores that swipe the purchasers
credit card. The virtual
terminal allows the merchant account holder to
enter the credit card information securely
for processing of debits and credits.
The VPOS (Virtual
Point Of Sale) is a Windows-based software application
that provides all the necessary features required
for processing credit
and debit card transactions quickly and easily
in situations where cards are not present. The VPOS
is a straightforward, powerful and effective tool
that helps companies boost sales.
Velocity controls are settings that determine transaction
thresholds for a particular Merchant. i.e. how many
times a merchant can try to process a card per day
Third Party Processing
A company accepting and processing credit cards on
behalf of an entirely different business. Third party
processing accounts are ideal for merchants that have
difficulties getting or maintaining their own merchant
facility. However they usually have very high transaction
rates (10% plus).