Payments 101 – The Glossary
Welcome to the ever-evolving world of commerce and payments, condensed into this go-to glossary of core concepts, topical terms, and ambiguous acronyms. Initially released more than a decade ago by First Data, today’s leader in commerce enablement, this updated and expanded glossary is your comprehensive companion to First Data’s “Payments 101,” the definitive primer to help you define the changing way of how we pay for what we want and what we need.
A unique sequence of numbers assigned to a cardholder account that identifies the bank or credit union issuing the card and the type of financial-transaction card.
Accounts Receivable Conversion (ARC)
This is a process, offered by a transaction processor such as First Data, that electronically scans paper checks submitted in payment for an account receivable and transforms that check information into electronic data for payment through an Automated Clearing House (Also see ACH).
First Data’s Acculynk solutions include a True Debit™ gateway, which enables least-cost-debit routing (or the payment route that will result in the lowest cost) for eCommerce merchants via PaySecure® and PINless transactions on the Electronic Funds Transfer (EFT) networks; PayLeap®, a combined gateway and acquiring card processing service; PayGov®, an electronic bill payment and presentment solution; and Payzur, a debit-based P2P (peer-to-peer) and real-time disbursement solution.
A financial institution that processes a payment transaction, such as credit or debit card payments, on behalf of a merchant. In the payments value chain, the Acquirer enables businesses to accept credit card payments for the purchase of goods and services. The Acquirer underwrites the merchant account, and may provide the hardware and software to enable the merchant to process transactions. (Also see Payments Value Chain.)
The process whereby a bank or financial institution (also known as acquiring bank or acquirer) processes credit or debit card transactions on behalf of a merchant, enabling that merchant to accept card payment for the purchase of goods or services.
Address Verification System (AVS)
A security system requiring merchants to supply address information for a cardholder to the institution that issues the credit card in card-not-present transactions, including online purchases.
Adjustments are used by the Acquirer, or the entity processing payment transactions on behalf of a merchant, to address process disputes, duplicate charges, and other discrepancies.
A credit card issued in conjunction with an organization or collective group; for example a card associated with a profession organization, alumni group, or retired-persons association. The card issuer (the institution that issues and underwrites the card) often pays the organization a royalty to market that card to their membership base.
A third-party mobile and online payments platform belonging to the Alibaba Group®, used for payment transactions both online and in stores, established in February 2004.
Alternative Payments/Local Payments
Payment types that eliminate card associations and that are used as an alternative to credit-card transactions (e.g., debit cards, prepaid or stored-value cards, direct debit, bank transfers, mobile payments, checks, cash, money orders).
American Express, also known as AMEX, is an American is a multinational financial services corporation headquartered in New York City that issues payment, travel, and expense-management solutions for individuals and businesses.
The process utilized by the credit card issuing companies to ascertain whether an Acquirer (or the entity processing payment transactions on behalf of a merchant) has definitive responsibility for a chargeback.
ATM Interchange Fee
The fee paid to the Acquirer Member (processes the debit transaction on behalf of merchant) by the Issuer Member (issues the debit card to the cardholder) for a STAR ATM Transaction as established from time to time by the STAR® Network. (See also STAR Network.)
ATM Terminal Driving
This refers to maintaining the physical connection and software between an Automated Teller Machine (ATM) and relevant parties, including the financial institution, processor, EFT network, etc. First Data provides end-to-end ATM transaction processing, which includes terminal driving, network/ATM/telecommunications monitoring, authorization, and routing to all major gateway connections. First Data drives virtually all ATM makes and models, using a wide variety of telecommunications modes.
Automated Clearing House (ACH)
This refers to the U.S. electronic network used by financial institutions to electronically transfer funds between banks, including processing volumes of transactions in batches.
Automated Teller Machine (ATM)
This refers to an electronic banking terminal that can be physically located at a bank branch, retail business, or other location. An ATM enables customers to complete basic banking transactions without the presence of a bank representative. Most commonly used to facilitate cash withdrawals with debit and credit cards.
This is the process to verify the identity of a credit-card user, such as when a cardholder is required to provide secret information, such as a Personal Identification Number (PIN), to complete a transaction or request information.
This refers to the initial electronic request made by a merchant for a customer’s card issuer to release funds. This verification process confirms that a credit card has adequate funds to cover a transaction.
B2B Payments (Business-to-Business)
A form of a transaction between two or more businesses, such as a payment made by a manufacturer to a wholesaler for raw materials, or a retail business to its rental company. First Data offers a wide range of commercial payments solutions.
A data company (often a third party) contracted by an acquirer (or the entity that processes payment transactions on behalf of a merchant) to provide processing and communication services. As opposed to a front-end processor that has connections to the card associations and supplies the acquirer with authorization and settlement services, the back-end processor accepts the settlement information from the front-end processor and routes the payment from the bank that issued the card to the merchant to complete the transaction.
Bank Identification Number (BIN)
This refers to the initial four to six digits that appear on a payment card, identifying the bank or entity that issued the card, that issuer’s location, and the card type (e.g., credit, debit, gift).
Bank Routing Number
The bank routing number is the first nine digits that appear across the bottom of a personal check that identifies the financial institution that issued the check.
Typically, a plastic card issued by a card-issuing entity, often a bank or credit union, providing access to funds, either drawing on a bank or a credit account. ATM cards, debit cards, and credit cards are all examples of bank cards.
A basis point-measured in one hundredth of one percent-that is used in expressing differentiation in interest rates or interchange rates where differences of less than one percent are common.
The accumulation of captured (sale) transactions waiting to be settled. Multiple batches may be settled throughout the day.
A type of data processing and data communications transmission in which related transactions are grouped together and transmitted en masse for processing, usually by the same computer and under the same application.
This refers to the extremely large volumes of data. This term is often applied in the context of the challenges associated with attempting to derive value by collecting and analyzing massive pools of diverse data to identify patterns of behavior and then develop business strategies to act upon that analysis.
Bitcoin is the most recognizable of an increasing number of decentralized digital currencies, also known as cryptocurrencies, that are not backed by any country’s central bank or government. A cryptocurrency can be traded for goods or services, though only with vendors accepting that cryptocurrency as payment.
This is a term used in the field of cryptocurrency transactions (or the use of digital currencies exchanged for payments). A blockchain is a digital ledger where all transactions, in the form of blocks, made in a specific cryptocurrency are recorded in chronological order. That digital ledger is then made publicly available to anyone using that cryptocurrency. Blockchains are decentralized, in fact copies are stored across multiple computers, and then synchronized as needed, allowing markets to track and verify transactions without the need for central bookkeeping.
A breach is a common term to refer to an incident of exploitation of security safeguards to access and compromise a merchant’s sensitive cardholder data.
This refers to a standard day for conducting business, excluding government holidays and weekends, when the securities markets and most retail locations are open for business. This term is often used in defining the timeline of a payment transaction, such as the number of days that will expire before funds will be deposited in an account after a transaction is initiated.
This refers to the date on which a payment transaction is processed by an acquirer, the entity that processes transactions on behalf of the merchant.
Card Account Updater
A First Data product that updates card information such as expiry date, card number, and status so that a merchant's recurring payments continue uninterrupted, without the merchant having to reach out to the cardholder to provide any updated information.
An organization owned by a financial institution that licenses bank credit card programs and performs operational functions for its members, such as transaction processing, authorizations, and interchange settlement (e.g., Visa®, MasterCard®).
CardConnect is an innovative provider of payment processing and technology solutions, helping more than 67,000 organizations – from independent coffee shops to iconic global brands – accept billions of dollars in card transactions each year. Since its inception in 2006, CardConnect has developed advanced payment solutions backed by patented, PCI-certified point-to-point encryption (P2PE) and tokenization. CardConnect was acquired by First Data in 2017.
A financial institution, such as a bank or a credit union, that offers a payment card (credit or debit cards) directly to consumers (or organizations) and is liable for the use of the card. The issuer is also responsible for the billing and collecting of funds for purchases that were made using that card. In the payments value chain, the card issuer pays the acquiring bank for purchases of goods and services that the cardholder makes. The cardholder then repays the issuing bank based on terms of the agreement. First Data is a leading provider of a wide range of processing services that support both issuers and acquirers.
Card Verification Value Code
The Card Verification Code is an authentication code added to a payment card for use during the authorization process. The purpose of the CVC is to verify that the cardholder making the transaction during a card-not-present transaction actually possesses the credit or debit card being used for the purchase. Credit card companies have their own name for the CVV code. Visa denotes to the code as CVV2, MasterCard refers to it as CVC2, and American Express® calls it CID. For Visa and MasterCard, the code appears as three digits on the back of the card. For American Express, the verification code appears as a four-digit code on the front of the card.
The person to whom a payment transaction card (credit and debit cards) is issued or an additional person authorized to use that card.
This refers to credit or debit card transactions where the physical card is not present at the point of transaction, such as for online purchases.
CardPointe is a comprehensive portal developed by CardConnect that allows merchants to securely accept and more easily manage credit card payments. In addition to features such as real-time transaction reporting, customer bill plans and PCI compliance management, the CardPointe platform offers a suite of products including a plug-and-play retail terminal, Virtual Terminal, mobile app, and more to accommodate Omnichannel payment acceptance needs.
An amount advanced by a bank teller (or Automated Teller Machine) to a bank cardholder that is drawn against the cardholder’s line of credit.
This term refers to an amount of money added to the total purchase price of a retail transaction paid by debit card where the customer receives that amount in cash along with the purchased item or service. This also refers to cash amounts returned to a cardholder by a retailer or card issuer as part of a loyalty and rewards program, similar to the solutions First Data provides to its credit-processing clients.
This refers to a demand on behalf of the credit-card issuer, on behalf of its cardholder, made to a retailer to reverse a payment based on a disputed transaction or instance of fraud.
The number of calendar days (counted from the transaction processing date) during which the card issuing institution has the right to charge the transaction back to the acquirer. The number of days varies from 45 to 180 days, according to the type of transaction.
This refers to a database service provided to merchants, businesses, and individuals to verify the check writer has a valid checking account and does not have a history of writing bad checks. This is not a guarantee of payment to the merchant.
A type of credit/debit card with an embedded smart chip designed to make transactions more secure. Now the global standard for credit and debit cards, also known as EMV® for the founding developers of the technology: Europay, MasterCard and Visa. (Also see EMV or visit the First Data EMV Information Center.)
This term refers to single-purpose payment cards, such as a store credit card or gift card (or even wristband), that may only be used for a transaction at a single store or group of stores owned by a company. The customer may have the option to reload funds for continued use. Conversely, Open Loop refers to the use of a credit card, debit card, or gift card to purchase goods or services anywhere that payment cards are accepted, subject to terms and conditions of the card issuer.
Small in size, Clover Flex is a versatile, full-featured mobile Point-of-Sale device with extensive payment acceptance capabilities that is easy to take with you and easy to hand to customers-they can dip, swipe, tap, enter a pin, and sign-whether in line, in the aisle, or at the table. And its built-in receipt printer and scanner ensures Clover Flex delivers the ultimate in flexibility.
A smartphone-ready all-in-one contactless, chip, and swipe card reader, Clover Go Contactless Reader is your go-to Point-of-Sale device for secure credit card swipes, dips and taps, such as Apple Pay®, Samsung Pay® and Google Pay®. It also offers many of the same industrial-strength payment capabilities and security as larger Clover devices. Just provide your own smartphone or tablet and a free hand.
A Point-of-Sale payment device with a tablet-user experience, Clover Mini is a touchscreen solution accepts swipe, EMV-chip and mobile-wallet payments (such as Apple Pay), while integrated tools help small business owners manage the business.
An all-in-one Point-of-Sale and payments system, the Clover Station integrates the functions of a cash register, card payment terminal, and POS system. Clover Station makes it easier and faster than ever to run your business using one device. Built-in capabilities allow you to simplify daily tasks, speed up transactions, engage customers, and accept the latest payments effortlessly.
A generic term referring to payment cards issued to businesses for use by employees to cover expenses (e.g., corporate cards, purchasing cards, travel, and entertainment cards). First Data offers a wide range of commercial payments solutions.
Connected Home/Connected Car
The concept that the home/vehicle is equipped with Internet access, enabling interconnectivity with devices, networks and services located outside the home/vehicle, extending capabilities such as payments, safety, navigation, media/infotainment, diagnostics/efficiency, and more.
An opt-in communication service offered by card issuers where cardholders receive alerts based on unusual or unauthorized transaction activity. For instance, First Data offers a range of customizable, real-time alerts and notifications that issuers can provide to customers to let them decide what information they want about their accounts and how they want to receive that information. This can include fraud alerts, but also notifications when a card is nearing its limit or is being used by another family member.
This refers to tools used to verify that the cardholder making a transaction is actually the individual authorized make that transaction, for both in-person and card-not-present transactions.
Contactless payments refer to a secure method of transaction that leverages mobile devices and payment terminals equipped with radio frequency identification (RFID) or near-field communication (NFC) technologies. For instance, Clover provides the latest in contactless payment terminals that enable payments with the tap of a mobile device, including Apple PayTM.
A unique numerical identifier used for a chargeback or retrieval request. (Also see Chargeback.)
A plastic card that has been fraudulently printed, embossed, or encoded to appear to be a genuine bank card, but that has not been authorized by MasterCard or Visa or issued by a member. This also refers to a card that was originally issued legitimately but that was subsequently altered without the issuer’s knowledge or consent.
This is an access account that provides for the advance of cash, merchandise, or other commodity, in the present, in exchange for a promise to pay a definite sum at a future date, usually with interest.
A company that collects, researches, and maintains credit information, and that sells that data to lenders, creditors, and consumers as credit reports. Though there are many credit bureaus, the most recognizable are Equifax, Experian, and TransUnion.
A plastic card with a credit limit used to purchase goods and services and to obtain cash advances on credit for which a cardholder is subsequently billed by the issuer (the institution, such as a bank or credit union, which offers the card to the individual) for repayment of the credit extended.
This refers to the maximum amount that a cardholder may owe to the issuer on the card account at any given time.
This is the status indicating a refunded transaction has been processed successfully.
A digital or virtual currency where encryption technology-operating independently of a central bank-is used to facilitate generation of units of currency and verify the transfer of funds.
The part of the World Wide Web intentionally hidden from search engines that is not generally accessible without special browser software that disguises IP addresses, enabling users to operate anonymously, often for nefarious purposes such as the unlawful trade of illegally obtained credit card data.
This refers to an incident when sensitive, confidential data, such as credit card or personal health information, is viewed, stolen, or used by an unauthorized, untrusted individual.
Data encryption is the process of securing sensitive data, such as credit card information, by transforming that data using an algorithm to make it unusable to anyone except those possessing special knowledge, referred to as a key.
Data Security Standard (DSS)
Also referred to as the Payment Card Industry Data Security Standard (PCI DSS), this is a common set of information security policies and procedures for use by entities that handle credit card data (basically, any organization that accepts, processes, stores, or transmits credit card information) to protect that data and prevent misuse of cardholders’ personal information.
This term refers to a large collection of data that is stored digitally and organized and designed for easy access and retrieval, e.g., a collection of customer names and addresses.
This refers to a charge to a customer’s deposit account.
Any card that primarily accesses a deposit account.
An electronic system used for debit-card transactions to withdraw cash from automated teller machines (ATMs), reconcile bills online, and make purchases. The network’s logo, such as STAR®, appears on the card.
A bank card may be used to purchase goods and services and to obtain cash, which debits the cardholder’s personal deposit account. First Data offers a wide range of debit processing and ATM solutions.
This refers to the refusal of a credit-card issuer to authorize and proceed with a payment transaction. A decline can occur for several reasons, include the suspicion of fraudulent activity, account-balance deficiency, a new card that has yet to be activated, etc.
This refers to a bank account where money can be deposited and withdrawn by the account holder. Deposit accounts include checking, NOW, savings, share draft, and such other depository accounts as are legal under applicable law.
See Credit Deposit.
A merchant discount rate is the amount charged a merchant for payment processing services its daily debit and credit card transactions.
A financial institution that provides banking services exclusively via digital platforms.
Also known as an eWallet, this is a software application usually used in conjunction with a mobile payment system to facilitate electronic payments using a computer or smartphone for online transactions, as well as purchases at physical stores. Digital wallets need to be linked to user’s bank account. For example, Apple Pay and Samsung Pay are device-based digital wallets. First Data offers a range of mobile payment solutions.
Doing Business As (DBA)
This term refers to a secondary name (also known as an assumed name, fictitious business name, or trade name) that is legally associated with a company and can be used to open bank accounts, write checks, enter into contracts, and for other business purposes. That company must lawfully file this secondary name or faces fines and penalties. A sole proprietor is usually required to file for a DBA, while for large organizations with multiple businesses and brands, a DBA helps identify the true ownership, for legal purposes.
Dynamic Currency Conversion
With Dynamic Currency Conversion, First Data® clients can offer customers with foreign-issued MasterCard® and Visa® cards the option of paying for goods in their local currency at a competitive exchange rate-and to earn additional revenue themselves through a share of the margin First Data receives.
EBT/Electronic Benefits Transfer Cards
Electronic Benefits Transfer (EBT) refers to the electronic system enabling state government assistance programs to issue benefits to recipients in the form of payment cards, or EBT cards. Previously, state welfare agencies distributed benefits in the form of paper coupons.
This refers to the electronic equivalent of a paper check.
The buying and selling of goods and services via an electronic network, usually the Internet. First Data offers a wide range of eCommerce solutions and services.
A form of banking in which funds are transferred through an exchange of electronic signals between financial institutions, rather than traditional banking exchanges of physical cash, paper checks, or other negotiable instruments.
Electronic Bill Payment (ePay)
An alternative to paper checks for paying bills, where consumers or businesses can use computers, telephones, smartphones, or ATMs to send electronic instructions to their bank or bill-payment provider to withdraw funds from their accounts and pay merchants.
Electronic Check Acceptance (ECA)
This refers to a system that captures banking information from a paper check and converts it into data that can be processed through the Automated Clearing House (ACH) network. With ECA, checks are processed similarly to credit cards, and the paper check is returned to the consumer at the Point-of-Sale.
Electronic Funds Transfer (EFT)
This refers to the transfer of funds between bank accounts (either within the same institution or among multiple institutions) by electronic means rather than conventional paper-based payment methods or requiring the intervention of bank personnel. For instance, direct deposit, where payroll is automatically deposited into an employee’s account at on a previously schedule payment date, is an example of an EFT transaction.
EMV is a fraud-reducing technology that can help protect issuers, merchants and consumers against losses from the use of counterfeit and lost or stolen payment cards at the Point-of-Sale. EMV cards are embedded with a microprocessor or smart chip that interacts with the merchant’s Point-of-Sale device to make sure that the payment card is valid and with the use of a PIN that it belongs to the person using the card. This kind of chip technology adds layers of security against fraud and is virtually impossible to duplicate. At the moment of transaction- when the cardholder is most susceptible to fraud- an EMV cryptogram is what keeps sensitive data away from cyber-thieves. Now the global standard for credit and debit cards, EMV is actually an acronym that represents the founding developers of the technology: Europay, MasterCard® and Visa®.
EMV Resource Center
This is a comprehensive online repository of updates and educational resources providing latest information regarding EMV adoption. (Click here to access the First Data EMV Resource Center.)
The technique of scrambling sensitive data automatically in the terminal or computer before data is transmitted for security/antifraud purposes.
An Enterprise Resource Planning, or ERP, system is business process management software that provides an enterprise with a series of integrated applications for managing its business operations and automating many back office functions related to technology, services, human resources, and more. First Data provides ERP Integrated Solutions that offer tight integrations with popular ERP systems like Oracle, SAP and InforM3, delivering intuitive payment processing, eCommerce, Point-of-Sale, and supplier collaboration solutions to enterprise-level organizations.
eWIC/Electronic Women Infants and Children
The government assistance program Electronic Women Infants and Children (eWIC) is now being added in some states to process in a way similar to Electronic Benefits Transfer (EBT) cards. eWIC replaces the existing paper-based EBT program used by state welfare programs. By converting to these magnetic-stripe programs, new transaction revenue can be obtained.
This refers to the date appearing on the face of a credit card, which identifies when that card is no longer valid for transactions.
A financial institution is any organization in the business of moving, investing, or lending money, dealing in financial instruments, or providing financial services. This includes commercial banks, thrifts, federal and state savings banks, saving and loan associations, and credit unions.
This term refers to the array of emerging technologies applied to enable banking and financial services functions. In the payments industry, this term often refers to technology companies competing with traditional financial institutions in delivery of services.
Basically, an API, or application program interface, is code that allows two software programs to communicate with each other. First API is First Data’s API technology that enables integration into the First Data Global Gateway, intended to saving developers/clients time and resources.
First Data is the global technology leader in payment technology and services solutions. With 24,000 owner-associates and operations in 36 countries, the company provides secure and innovative payment technology and services to more than 6 million merchants and financial institutions around the world, from small businesses to the world’s largest corporations. Today, businesses in nearly 118 countries trust First Data to secure and process more than 2,500 financial transactions per second. First Data’s unparalleled infrastructure and partnerships go “beyond the transaction” with next-generation Point-of-Sale technology fueled by powerful analytics to detect fraud, gain insights into consumer spending, and strengthen customer loyalty. (Click here for more info on First Data.)
In payments, this refers to dishonest means to perpetrate false or illegal transactions, including account takeovers, identity theft, card counterfeiting, and other illicit schemes. First Data offers a wide range of security and fraud prevention solutions.
First Data’s Fraud Detect is a comprehensive, state-of-the-art fraud prevention solution with real-time fraud scoring and machine-learning capabilities designed to reduce a merchant’s exposure and cost of fraud.
Fraud Score/Fraud Scoring
A predictive analytics system for payment processors to assign a score, based on various models and transaction data, to assess the risk level of a pending transaction during the authorization process and determine the probability that the transaction is unauthorized or fraudulent. The fraud score assigned will determine if additional verification is required for the transaction to proceed.
This term refers to the act of blocking a consumer’s access to credit. A credit freeze, or security freeze, is most often applied in incidents of identity theft when a cardholder wants to prevent an identity thief of opening accounts or making purchases. A freeze may also be applied by a consumer seeking to limit their own spending or to limit potential threats to a family member, such as an elderly parent.
This refers to a scheme where a cardholder, or someone who gains access to the card, makes a purchase and then enters a chargeback based on a false claim, such as they did not receive the purchased goods or did not initiate the original transaction.
Payment processors are third parties designated by merchants to handle credit card and debit card transactions, and include both front-end processors and back-end processors. Front-end processors provide the connections to the card associations, as well as authorization and settlement services. Back-end processor accept the settlement information from the front-end processor and route the payment from the bank that issued the card to the merchant to complete the transaction.
This refers to the payment to a merchant for the merchant’s submitted deposits.
Funds Transfer System
A wire transfer network, Automated Clearing House (ACH), or other communication system or clearinghouse or association of banks in which First Data’s Clearing/Funding Bank is a member and through which a payment order by a bank may be transmitted. This includes: SWIFT, CHIPS, Fedwire, the NACHA® (reviously the National Automated Clearing House Association), MasterCard®, and Visa®.
In the payment industry, this refers to an eCommerce payment service to process credit card transactions and direct payments for both online and traditional brick-and-mortar businesses.
A gift card is basically a prepaid stored-value card, issued by a bank or retail business, for use as an alternative to cash for the purchase of goods or services. The monetary value is stored on the card itself and not in an external account maintained by the merchant or a financial institution. First Data offers a wide range of gift card solutions for all types of businesses.
This refers to a labor scenario dominated by independent contractors and freelancers, as opposed to traditional full-time employees. The contractor or freelancer is paid for each “gig” or short-term job performed. The Gig economy is a term increasingly used in reference to the rise of on-demand services (e.g., DoorDash, TaskRabbit, Uber).
Global PFAC™ Program
First Data’s Global Payment Facilitator program is an aggregator model that allows payment facilitators to offer a suite of services to their sub merchants. The program supports the Card Brand rules and guidelines which enables payment facilitators to facilitate payments seamlessly on behalf of multiple sub merchants.
This refers to the period of time where a cardholder is allowed to pay the balance of a credit card bill without incurring interest charges. The length of the grace period is established in the credit card agreement.
First Data Gyft provides consumers with the ability to purchase, send, and manage plastic or digital gift cards from any device. Users can send eGift cards instantly or upload plastic cards to their Gyft wallet and redeem them from a mobile device.
The term “hacker” in the payments industry is more commonly used to refer to a cybercriminal, often an expert programmer, who gains unauthorized access to systems, networks, and data to commit crimes. While the term can also refer to any skilled computer programmer, it is more often used to refer to malicious activity.
Hard Credit Pull
Also known as a “Hard Inquiry,” this is the verification process performed by a credit-card issuer or lender when a consumer applies for some form of credit (e.g., credit-card application, loan, or mortgage). Initiating this process requires consent by the individual seeking credit. Conversely, a “Soft Credit Pull” is a credit check performed by a lender without knowledge of the consumer, such as to assess if that individual prequalifies for an offer, or if a credit check is requested by the consumer.
When a final transaction total is uncertain, as in a hotel stay, an authorization hold is placed on a portion of the cardholder’s credit limit or debit balance as a pledge of collateral. Once the full amount of the transaction is determined, usually at checkout, the card is charged and the hold is removed.
This refers to a third-party service that enables a business to accept debit and credit payments online, such as First Data’s Payeezy Gateway, that helps ensure faster, uninterrupted online payments thanks to top processing speeds and an intelligent infrastructure.
The purchase of goods or services from within a mobile application.
A First Data program designed to help businesses acquire, develop, convert, and retain customers by allowing them to incorporate both digital and plastic gift cards into their branding and marketing campaigns.
Independent Sales Organization (ISO)
In merchant services, this refers to an independent credit-card processing company, often an approved entity reselling services from a larger company, such as First Data, under its own company name.
Intelligent Payment Routing
The process of routing a payment transaction to the acquiring bank most likely to approve a transaction, based on specific criteria, designed to minimize the convenience of declines.
Interactive Voice Response/IVR
IVR refers to the field of telephony technology enables a computer to interact with a consumer through the use of voice commands and keypad buttons. In the payments industry IVR is the basis for menu systems enabling identification, segmentation, and routing of inbound callers to specific agents on a customer response or call center team, or for self-service resolution. First Data IVR systems and call centers handle an average of 30 million calls per month.
The domestic and international systems operated by MasterCard® and Visa® for authorization, settlement, and the passing through of interchange and other fees, as well as other monetary and non-monetary information related to bank card activities.
In credit-card processing, this refers to the fees paid by the acquiring bank to the issuing bank to compensate for transaction-related costs. MasterCard and Visa establish interchange-fee rates.
Electronic networks managed by American Express®, Discover®, MasterCard, and Visa for the exchange of data pertaining to card transactions among issuers and acquirers. Access is required to facilitate verification for approvals and settlement. Interchange fees vary by card.
Internet of Things (IoT)
This term refers to the interconnection of everyday devices (also called “smart devices”), embedded with computer chips and sensors, via the Internet. The integration of evolving payments technology into the IoT paradigm holds promise to help revolutionize the payments industry. For example, an automobile equipped with internet access facilitating frictionless payment at the pump and other functions, otherwise known as a Connected Car, is an example of IoT technology at work.
This refers to technology that enables financial institutions to provide their commercial customers with end-to-end payment automation, including integration with their back-office systems for a seamless business-management experience. Invoice-to-Pay technology seeks to supplant manual bill payment still performed with paper checks. (Also see MineralTree®.)
An issuer is a financial institution, such as a bank or a credit union, which offers a payment card (credit or debit cards) directly to consumers (or organizations) and is liable for the use of the card. The issuer is also responsible for the billing and collecting of funds for purchases that were made using that card. In the payments value chain, the card issuer pays the acquiring bank for purchases of goods and services made by the cardholder. The cardholder then repays the issuing bank based on terms of an existing agreement. First Data is a leading provider of a wide range of processing services that support both issuers and acquirers.
JCB (Formerly Japanese Credit Bureau)
Since being established in 1961, JCB has maintained the position as a leader in the Japanese card industry. JCB is Japan's premier and only international payment brand, with wide acceptance in Japan and Asia.
The issuing of credit to two or more people, based on combined income, credit histories, and assets. Joint credit may be issued to organizations as well as groups of individuals. The parties involved share the responsibility for repaying the debt accumulated.
An old-style device that is rarely still in use today for credit card transactions. The card is physically placed in the device and an impression is created by sliding a bar across carbon paper to capture the card’s embossed numbers. Also known as a Zip Zap Machine.
Late Payment Fee
A fee charged to a borrower or cardholder for not submitting a minimum required payment by a previously agreed-upon deadline for payment.
Local Payments/Alternative Payments
Refers to payment types that eliminate card associations, used as an alternative to credit card transactions (e.g., debit cards, prepaid or stored-value cards, direct debit, bank transfers, mobile payments, checks, cash, money orders).
This refers to programs for card issuers to offer incentives to cardholders for using a specific card. For example, First Data’s Premier Loyalty Platform offers card issuers a configurable platform for designing new loyalty programs, featuring core reward program capabilities, customizable promotions and offers, a redemption center, analytics, marketing and communication services, and more.
MCC or SIC Codes
A four-digit code that is assigned by credit card companies to merchants for tracking purposes.
MICR Number Method
A check-authorization procedure that uses the bank routing/transit numbers, checking account numbers and check number encoded along the bottom of the check.
Machine learning refers to the developing field of high-performance computing in the payments industry that applies a set of data analytics tools to enhance various aspects of transactions processing, such as more accurately predicting delinquencies and improving virtual customer service.
Magnetic Information Character Recognition (MICR)
Imprinted banking numbers (routing/transit number, checking account number, check number) that appear at the bottom of a check.
A stripe (on the bank card) of magnetically encoded cardholder account information affixed to a plastic card.
A financial institution that is a member of Visa® USA and/or MasterCard® International. A member is licensed to issue cards to cardholders and/or accept merchant drafts.
A retailer, or any other person, firm, or corporation that, according to a Merchant Agreement signed with an Acquirer or Independent Sales Organization (ISO), agrees to accept credit cards, debit cards, or both, when properly presented.
A financial institution that processes a payment transaction, such as credit or debit card payments, on behalf of a merchant. In the payments value chain, the Acquirer enables businesses to accept credit card payments for the purchase of goods and services. The Acquirer underwrites the merchant account, and may provide the hardware and software to enable the merchant to process transactions. (Also see Payments Value Chain.)
The written contract between merchant and acquirer that details their respective rights, responsibilities, and warranties related to the processing of payment transactions.
This refers to a bank that primarily provides business loans, underwriting, and other financial services to businesses. A merchant bank does not provide banking services to consumers.
Merchant Identification Number
A number that numerically identifies each merchant to the merchant processor for accounting and billing purposes.
Merchant Service Provider (MSP)
Third-party entity that provides intermediary services to help a merchant manage the processing of payments. An MSP may also assist in managing a merchant account with a card association or a card network.
This refers to loyalty-rewards programs sponsored by credit card issuers, such as financial institutions, that utilize merchant partners to provide rewards and incentives for promotional campaigns for cardholders, at no cost to the issuer. This process enables the merchants to introduce their products and services, as rewards, to new groups of customers, in the hopes they would become recurring customers. For instance, First Data offers its issuers access to a network of more than 16,000 merchants for funded rewards programs.
This is invoice-to-pay technology to enable a financial institution to provide its commercial customers with end-to-end payment automation that integrates with back-office systems for a seamless business-management experience. The intent is to replace the use error-prone, manual written checks as forms of B2B payments. First Data offers a range of commercial payments solutions.
The purchase of goods and services conducted over the Internet with mobile devices.
The use of a mobile device to pay for goods or services.
Also known as an eWallet or Digital Wallet, this is a software application usually used in conjunction with a mobile payment system to facilitate electronic payments using a smartphone for online transactions as well as purchases at physical stores. Digital wallets need to be linked to a user’s bank or credit card account.
The electronic payroll delivery services offered by First Data, including Money Network Card, Money Network Checks, and related services.
NFC (Near Field Communications)
More commonly known by its acronym, NFC, Near Field Communications refers to close-range contactless wireless technologies enabling connectivity between devices, such as for processing mobile payments, when the devices are either touching or within close proximity to one another.
Payment to the merchant for sales drafts less credits minus the appropriate discount fee.
Discount income less interchange expense.
This refers to 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.
In a payment system, this is a financial institution or company that provides some banking services, but does not offer a full array of retail banking services and does not have the legal status of a bank. For example, a company that offers a credit card but does not accept deposits is an example of a non-bank.
The First Data OfferWise solution is an open platform that dramatically simplifies the offer redemption process and creation of card-linked services for consumers and merchants. The OfferWise solution allows offer publishers or application developers to create electronic offers such as deals, eCoupons and loyalty programs that consumers can attach to one or more of a their payment cards or mobile wallet, thereby enabling streamlined and automatic redemption of the offer at the Point-of-Sale.
Office of Foreign Assets Control (OFAC)
OFAC is the unit of the U.S. Department of the Treasury that administers and enforces economic and trade sanctions, including asset seizures, based on U.S. foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States. OFAC acts under Presidential national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze assets under U.S. jurisdiction.
Offline Debit Transaction
Also known as a signature-debit transaction, this is a payment method utilizing a debit card to transfer funds from the cardholder’s bank account to the merchant via a credit card network, processing in much the same way as a credit card transaction. An interchange fee is charged to the merchant and not the card-issuing bank.
Omnichannel is the concept of integrating multiple channels for retail sales (online purchases, in-store purchase, mobile shopping, etc.) focused on presenting a seamless, high-quality shopping experience for the buyer. For example, with the Clover Online Store, business owners can give their customers the omnichannel shopping experience that shoppers are increasingly coming to expect today.
Also known as PIN debit, during an online debit card transaction, once the card is inserted/swiped at the Point-of-Sale, the cardholder is required to enter a Personal Identification Number (PIN), and the funds for the transaction are deducted from the cardholder’s bank account. The transaction is processed on the ATM network of the cardholder's bank, such as STAR®.
This refers to the electronic purchase of goods or services utilizing the internet, computer networks, and digital stored value systems.
The use of a credit card, debit card, or gift card to purchase goods or services anywhere that payments cards are accepted, subject to terms and conditions of the card issuer. This the opposite of a Closed Loop card, also called a single-purpose card, referring to a store credit card or gift card that can only be used for a transaction at a single store or group of stores owned by a company.
This is the up-front multi-step process by which a consumer or borrower applies for a new loan or credit card, and the lender or card issuer processes that application, covering all steps from application submission through approval/denial.
This refers to one physical location of a retail chain in the network of a merchant’s business.
When a cardholder exceeds the predetermined credit limit on a payment card, that cardholder’s account is deemed over-limit. At that point, the card issuer may decline the transaction or process the transaction and then assess a penalty fee for surpassing the agreed-upon limit.
During a transaction, when the purchase amount exceeds the cardholder’s credit limit, the issuer can return a partial authorization for funds only up to the amount of the limit. At the Point-of-Sale, the merchant then requests an additional method of payment to cover the outstanding balance of the transaction.
First Data Payeezy is payment gateway technology for merchants that offers a dynamic eCommerce solution that helps create a seamless customer experience on a website by offering more payment options, security features and easier integration. Customers can pay with any card, PayPal account or electronic checks-all in their native currencies.
This refers to the total amount of a cardholder’s transaction submitted for authorization for payment.
An Internet-based system used in an eCommerce transaction for the transfer of credit-card information from a computer or website to a credit-card processor for verification, completing the authorization process between the merchant and the consumer.
Purchasing Card / P Card
Type of commercial card issued to a business for use by an employee for transactions made outside the standard corporate-purchasing process.
The form of payment a consumer uses to purchase goods or services from a seller (e.g., cash, credit card, debit card, money order, bank transfer).
Payments Value Chain
The Payment Value Chain refers to the complex ecosystem supporting a payment transaction that includes the consumer, merchant, acquirer, network (e.g., MasterCard®, Visa®), issuer, and processor, as well as myriad third-party servicing entities supporting many aspects of this process.
First Data’s PayPoint Payment Gateway is an enterprise-wide solution that manages payment processing across multiple channels and customer payment types. It’s designed to consolidate and help simplify payment processing, transaction tracking, reporting and exception processing-all through one integrated payment portal.
PCI DSS (Payment Card Industry Data Security Standards)
Common information security standards for merchants, financial institutions, payment-device makers, software designers, processors, and other third parties, that handle credit cards from major card organizations, intended to help ensure the safeguarding of payment card account data. Basically, all entities that store, process, and / or transmit cardholder data are required to adhere to these standards.
PIN (Personal Identification Number)
A Personal Identification Number, or PIN, is the confidential individual number or code used by a cardholder to authenticate card ownership for ATM or POS-terminal transactions.
PIN Authorization Request
This refers to the procedure enabling the card issuer to validate the cardholder’s identity by comparing the Personal Identification Number to the account numbers.
This refers to an electronic device where cardholders can enter their Personal Identification Numbers, usually at a Point-of-Sale terminal, to complete a transaction using a payment card. The PIN Pad should encrypt the PIN during the transaction to ensure security.
A procedure utilized by or on behalf of the card issuer to verify the identification of the cardholder as a result of the use of the PIN upon receipt of a transaction request.
PINless Debit Transaction
This refers to a debit-card transaction where a customer is not required to enter a Personal Identification Number at the point of purchase.
This colloquial term refers to the physicality of payment card, usually in reference to the manufacture, enhancement, and addition of security features of these hard-plastic cards.
This refers to the specific time and place where a retail transaction is completed.
This is an electronic system, including software and hardware, which is used to complete retail transactions. More advanced POS systems, such as Clover, now offer a wide range of functions, (e.g., sales transactions, returns, exchanges, gift cards, customer loyalty and rewards programs, promotions, discounts, inventory management, and much more).
Point-to-Point Encryption (P2PE)
Security standard that immediately encrypts cardholder info at the initial swipe device, then securely transfers that information to the payment processor who in turn decrypts the data. This technology is designed to ensure unencrypted cardholder data is never stored or processed in a merchant’s Point-of-Sale system, thereby intended to minimize the potential of a data breach.
A device placed in a merchant location that is connected to the merchant’s bank or authorization service provider via telephone lines and is designed to authorize, record, and transfer data by electronic means for each sale.
A prepaid card is payment card that is not linked to a bank account, where the cardholder can only spend up to the amount that has been pre-deposited onto the card. Prepaid cards are often reloadable.
Primary Account Number (PAN)
Numerical code, up to 16 digits, uniquely identifying a credit cardholder’s account, created when the account is opened. The first six numbers identify the card network, the next set of digits signifies the cardholder, and the remaining digits are used for security purposes.
Private Label Credit Cards
A private label credit card is a store-branded credit card intended for use at a specific retailer’s store locations or website, based on a revolving credit program managed by a financial institution or finance company. Five of the top seven retail private-label credit card issuers in the United States today are now clients of First Data for processing, while more than 380 retailers nationwide entrust First Data for their private label and co-branded card processing needs.
PSP (Payment Service Provider)
A Payment Service Provider is a third party that provides merchants with the ability to accept electronic payments, enabling connectivity to financial institutions and credit card acquirers.
Digital technology that enables consumers to transfer funds from their credit card or bank account directly to another individual's account through a mobile device or the internet. For example, First Data Payzur offers financial institutions a fully brandable white-label solution to offer person-to-person mobile and web-initiated payments.
The qualifying ratio is the percentage of a credit applicant’s income that is consumed by paying existing debt obligations. The qualifying ratio is used by lenders to determine creditworthiness and approve/reject credit requests.
QR (Quick Response) Code Mobile Payments
This technology allows customers to display a QR code (trademarked name for a two-dimensional bar code) on their mobile devices that can then be scanned by a merchant’s optical scanner to read the code and facilitate a payment.
QSR/Quick Service Restaurants
Quick service restaurants, also known as fast food restaurants, serve food quickly and conveniently, with minimal table service. More and more QSRs now leverage First Data processing and mobile payment technologies to provide their customers with the convenience of ordering in advance, pre-paying via their devices and picking up their food upon arrival at the restaurant location.
First Data Rapid Connect provides software developers with an efficient way to payment-enable a merchant’s physical and virtual environment through a single interface to multiple First Data platforms.
This refers to a code used to provide additional information to the receiving clearing member regarding the nature of a chargeback, subsequent presentment, fee collection, funds disbursement, or request for a source document.
A documented acknowledgement that a transaction 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.
Recurring Billing Transaction
A transaction charged to the cardholder (with prior permission) on a periodic basis for recurring goods and services, (e.g., health-club memberships, book-of-the-month clubs).
A portmanteau blending the words regulatory and technology, used to refer to the use of technology in the financial services industry to enhance the ability to meet regulatory compliance challenges more effectively than pre-existing measures. RegTech is considered a sub-set of technologies in the area of FinTech. (See FinTech.)
A reloadable card is a prepaid payment card where the consumer has the ability to add additional funds. A reloadable is not linked to a bank account. First Data offers a complete managed service for prepaid cards and innovative contactless payment product types.
This refers to the sum of money sent in outstanding payment for goods or services.
Information required by the biller to post customer bill payments effectively.
Also known as receivable processing, remittance processing refers to the processing and clearing of payments associated with consumers paying their bills. For instance, First Data offers banks and businesses a full slate of remittance and electronic payment collection services.
A retailer is an individual or business that sells goods or services to the public. More retailers today are offering their customers the convenience of an increasing array of payment options to complete purchases (e.g., cash, credit or debit transactions, store credit or gift cards, Point-of-Sale loans, alternative payment methods, digital wallets) across various channels (e.g., in-store purchases, eCommerce, mobile shopping).
A retrieval request is when a credit-card issuer requests from a merchant additional information regarding a transaction involving one of that issuer’s cardholders. For instance, the issuer may request a transaction ticket or receipt when a charge is being disputed. A retrieval request is also known as a soft chargeback. Merchants are usually charged fees by their Managed Service Provider for retrieval requests, and may incur penalties for not responding in a timely manner.
Series of numbers assigned to checking accounts, savings accounts, or other accounts that identify the financial institution associated with the specific account.
A sales draft is paper documentation of a transaction. A sales draft may also be called a sales slip, a charge slip, or a hard copy.
Secure Payment Page
This refers to a web page that is secured with Secure Sockets Layer (SSL) 128-bit encryption and designed to accommodate the safe transfer of sensitive data, including credit card information, for the purpose of eCommerce transactions.
As the sales transaction value moves from the merchant to the acquiring bank to the issuer, each party buys and sells the sales ticket. Settlement is what occurs when the acquiring bank and the issuer exchange data or funds during that function to complete the payment transaction.
This refers to a transaction status denoting an error that occurred during processing that is now preventing settlement of the transaction.
A document issued to the merchant, indicating the sales and credit activity, billing information, discount fee, and chargebacks (if any) occurring during a particular time frame (one week, one month).
Shopping Cart Software
Shopping cart software allows an online shopper to select items from an eCommerce store and place them in a virtual shopping basket or shopping cart, where those items can then be processed for sale. 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.
SIC (Standard Industrial Classification) Codes
A four-digit code assigned by the United States government for classifying industries used to identify the nature of a business.
A smart card is a plastic card resembling a traditional credit or debit card that contains a computer microprocessor chip capable of storing significantly more information than a magnetic stripe.
First Data SpendTrend economic analyses provide a comprehensive view of transaction and dollar volume growth by payment type. This unique analyses aggregate retail sales data across over four million merchant locations to provide extraordinary insight into consumer spending patterns in all major retail verticals. With a combination of macroeconomic reports and customized datasets, SpendTrend economic analyses help guide forecasting, validate models and identify sales growth areas. Set of solutions providing timely, accurate insight and analysis of U.S. consumer spending that helps facilitate market forecasting, sales growth comparisons and strategic business decisions.
A leading debit card processing, full-service debit payment network that offers real-time network management with exception processing, transaction research and marketing tools. STAR Network provides coast-to-coast coverage at more than 1 million Point-of-Sale and ATM locations.
The process of sending batch deposits to Merchant Services for processing. This may be done electronically or by mail.
This refers to the forms necessary to support a chargeback-processing cycle, and any additional material to uphold a dispute. (Also see Chargebacks.)
First Data’s TeleCheck delivers industry-leading check acceptance, check processing, and risk analytics services while safeguarding customers from fraud and identity theft with a relentlessly committed team of specialists. Whether you purchase in store, online, or over the phone, your identity and checking account information are safeguarded from unwarranted or unlawful use.
Terminal Identification Number (TID)
Unique numerical identifier that denotes the specific Point-of-Sale device or computer where a payment transaction initiated, used by merchants, card associations and others to source the origin of fraud transactions.
Processing of transactions by service providers acting under contract to card issuers or acquirers. First Data is a third-party processor.
Token/Security Token/Authorization Token
A unique identifier created by an algorithmic process that replaces a credit card number and other sensitive data during the processing of a payment transaction to prevent credit card fraud. Tokens can be passed electronically without exposing actual customer account data.
Token Service Provider (TSP)
The entity within the payments ecosystem responsible for issuing and managing tokens, including mapping customer card numbers to payment tokens.
Tokenization is data-security technology that substitutes non-sensitive random numerical sequences for sensitive credit card data in the transaction process so it can be passed over the internet without exposing the data to cybercriminals.
In payments, a transaction refers to an agreement between a buyer and seller to exchange an asset for payment for goods or services. A transaction involves the change in financial status between the two parties. One example of a transaction is the process that takes place when a consumer makes a purchase at a retail store using a credit card.
This refers to the actual date on which a transaction occurs that is used in recording and tracking transactions.
Service costs charged to a merchant on a per-transaction basis.
Transaction ID (Trans ID)
A unique identification code assigned to a specific credit or debit transaction, used for sorting transaction data.
Refers to the specific state in which a transaction currently is in in the processing cycle. Various transaction states include Authorized/ Pending Capture, Captured/Pending Settlement, Credit/ Pending Settlement, Declined, Voided, Credited, General Error, Communication Error, Settled Successfully, Under Review, and Review Failed.
First Data’s security package that helps protect businesses from hackers and malicious software. The TransArmor Solution provides multilayered protection for businesses. It helps defend eCommerce systems from hackers, protect customers’ sensitive information, and reduces liability in the event of a breach. TransArmor is also a standard feature of any First Data merchant account.
Short for Universal Commerce or Ubiquitous Commerce or Ultimate Commerce, uCommerce refers to commerce that is enabled between buyers and sellers anytime, anywhere, and on any type of device. With uCommerce, the mobile device is at the center of the user experience.
The payment processor practice of reviewing a potentially fraudulent or high-risk transaction prior to submission for processing, usually resulting in a minor delay.
Universal Commerce for IoT/Connected Car
First Data solution suite that enables frictionless shopping experiences securely and at scale (e.g., pay at the pump, mobile order and pay, loyalty/offers, smart parking).
Universal Commerce for Petro/C-Store
First Data solution suite that enables frictionless shopping experiences securely and at scale (e.g., white-label mobile app, pay at the pump, loyalty/offers, cloud-based software).
Universal Commerce for QSR
First Data solution suite that enables frictionless shopping experiences securely and at scale (e.g., order and pay ahead, pick up orders at drive-thru or curbside, loyalty/offers).
Universal Commerce for Retail/Grocery
First Data solution suite that enables frictionless shopping experiences securely and at scale (e.g., mobile order and pay, in-store scan and pay, curbside pickup or delivery, loyalty/offers).
During a purchase, the use of a credit or debit card, or via other method, to make a payment not authorized by that account holder, often the result of fraud or cybercrime. Note that this does not refer to an issuer declining authorization for payment on a transaction.
A credit or debit transaction cancelled by the seller, or merchant, after authorization but prior to completion and settlement.
Also known as an eWallet, this refers to a software application usually used in conjunction with a mobile payment system to facilitate electronic payments using a computer or smart phone for online transactions as well as purchases at physical stores. Digital wallets need to be linked to user’s bank account.
An old-style device rarely in use today for credit card transactions, where the card is physically placed in the counter-top device and an impression is created by sliding a bar across carbon paper. Also known as a Knuckle Buster.