PAYMENT GLOSSARY

Payment Processing Glossa

Account Takeover (ATO): A method of online fraud where

acquiring the login, often by theft, and then takes over the

Automated Clearing House (ACH): An electronic payment

transactions between banks in the United States. Used for
electronic checks and Demand Deposit Account (DDA) tra

Acquirer: A bank that accepts payments for a payments ne

provides a merchant account and processes card transac
The acquirer feeds transaction data into the interchange s
bank.

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 Acquirer Reference Number (ARN): A unique number atta
the merchant’s bank to the cardholder's bank. The numbe
progress. They can also be called trace IDs because they
transaction are in the process.

Affinity Card: A credit card issued in association with an o

alumni, retirement or other associations. The card issuer o
the card.

Anti-Money Laundering (AML): Any tool or technique form

refers to standardized policies and regulations put in place

Application Programming Interface (API): A package of so

designed to allow software developers to seamlessly acce

ATM Interchange Fee: Fee paid to the acquirer by the card

are set by the ATM network.

Authorization: The process of checking and approving tha

for the proposed transaction. A positive check means an a
aside for the proposed transaction.

Average Monthly Volume (AMV): The average amount of tr

(merchant, processor, etc.) during a month. Typically expre

Average Ticket: For any particular merchant account, the a

fee and pricing calculations. Also called Average Selling P

Address Verification Service (AVS): Fraud protection servi

customer matches the one on file with the issuing bank to

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 Back Office Conversion: Check conversion (paper to digit
office”. Consumers must be notified that BOC will occur b
receiving locations.

Bankcard: A financial transaction card (typically a credit o

Bank Identification Number (BIN): The first digits — typica

found on a card from an issuing or acquiring institution as

Bank Routing Number: The first nine digits at the bottom o

institution where the account is located.

Basis Point: One one-hundredth of one percent. Generally

Batch: A group of card transactions collected for submittin

Beneficiary: Person who receives funds collected by a thir

on behalf of another person. If they want the funds to be s
need to be changed to complete KYC checks on the bene

Capture: After a card is authorized, a second set of data is

capture. It signifies that an actual transaction has taken pl
for settlement.

Capture Date: The date when a transaction is processed b

Card association: A technical term for a specific credit car

Express, Discover.

Cardholder: The individual to whom a credit or debit card

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 also authorized to use the card.

Card Issuer: The financial institution that authorizes the iss

Card issuers retain authority over the use of the card by th

Card Not Present Transaction (CNP): A payment card tran

presented to the merchant at the time of the transaction. C
telephone transactions but also used in a few other cases

Card Not Present (CNP) Accounts: A merchant or seller ac

card not present payments. May have higher rates than po
present. Because the signature is not required, these acco

Card Present (CP): A transaction made where the cardhol

merchant. Requires a point of sale device.

Card Verification Code (CVC): A unique numerical value c

magnetic stripe of a MasterCard card, validating card info

Card Verification Value (CVV): A unique value calculated f

a VISA card, validating card information during the authori

Chargeback: The result of a cardholder or the cardholder’

transaction. The chargeback is sent back to the merchant
amount of time in which to defend the chargeback, depen
chargeback fee is usually charged to the merchant in add

Chargeback Defense: The information a merchant needs/

invoice, a customer verification, or proof of shipping.

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 Chargeback Period: The time during which an issuing ban
the acquiring bank. The period varies by transaction type

Check 21: The Check Clearing for the 21st Century Act - a
electronically. Check 21 lets banks use an electronic copy
of the original.

Clearing: The process of transmitting information about a

in a decision of approval or denial of the transactions and

Compliance: Any process that is used by any of the partne

follow regulatory procedures applying to that transaction.
network regulations, bank regulations and others.

Credit card processors: Entities like merchant account pro

card transactions between merchants, issuing banks, and
processors.

Crowdfunding: Funding a project, event or organization by

number of people.

Cryptocurrency: Digital currency, such as bitcoin, that relie

to create, distribute and track the currency.

Currency conversion: The process of converting an amoun

Typically involves one or more national currencies and is g
buying and selling each currency.

Debit: A charge to an account. Basically any amount propo

to as a debit.

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 Debit Card: A payment card that primarily accesses a Dep
purchases or withdraw cash.

Decline: The transaction request has been refused, usually

entities along the processing chain. Reasons are typically
Reasons are coded for return with the decline.

Deposit Account: A financial account with a balance of fun

include checking, savings, share draft, and many others.

Disbursement: The distribution of funds once a transaction

the various fees to the stakeholders along the way.

Discount Rate: In credit card payment systems, the interes

processing credit card transactions. Other fees may also b

Dispute: A claim made by a cardholder to the issuing bank

charge. Disputes start an interaction with the merchant tha

E-Check: The electronic equivalent of a paper check.

Ecommerce: Buying and selling goods and services online

Electronic Check Acceptance or ECA: A system that captu

and converts it into an electronic item processed through
check or via ACH. Now available to consumers via smartp

Electronic Bill Payment (E-Pay): Method for consumers to

devices to send electronic instructions to withdraw funds

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 Electronic funds transfer (EFT): The electronic transfer of f
electronic means rather than paper methods. Includes AC
fund transfer made completely electronically.

Europay, Mastercard and Visa (EMV): A commonly-availab

using chip and pin systems for card present transactions.
harder to counterfeit.

Gateway: An organization or system initiating transactions

Often provides additional fraud, identity, and reporting fun
process transactions.

Image Replacement Document (IRD): Also known as a su

paper check that conforms to the requirements set forth b
(Check 21). Because of Check 21, IRDs act as the legal eq
financial institutions to settle check transactions.

Independent Sales Organization (ISO):ISOs sell merchant

usually purely sales and support organizations.

Instant Payment Notification (IPN): A method for online re

server-to-server communication in real time.

Interchange: The domestic and international systems ope

settlement and the passing through of interchange and ot
monetary information related to bankcard activities.

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 Interchange fee: A fee specified by card associations that
each credit or debit card transaction to cover transaction
in addition to any other fees charged for processing credit
number of variables, such as card type, business type, car
timeframe, information submitted with the transaction, and

Issuing bank: The bank that holds the customer’s credit or

acquiring bank for payment to the merchant. The issuing b
date, typically monthly.

Know Your Customer (KYC): The compliance process of c

Most commonly refers to government, bank, and card netw
fraud, identity theft, money laundering, and terrorist financ

Marketplace: A type of online ecommerce business where

third parties, but transactions are processed by the marke

Merchant: Any person or business entity that accepts paym

Merchant account: A bank account from an acquiring ban

and other payment types.

Merchant Acquirer: Another term for the acquirer or acqui

Merchant Agreement: The contract between merchant an

and responsibilities.

Merchant ID Number (MID): A unique number to identify e

chain for accounting and billing purposes.

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 Merchant of Record: The merchant designated for the spe

Method of Payment (MOP), aka Payment Method:

check, direct debit, credit card, ACH, debit card, cash and

Magnetic Ink Character Recognition (MICR): A character r

electronic scanning easier. Used for the bank routing num
check.

Mobile Point of Sale (mPOS): A mobile device, either stand

combined with software or an app to allow mobile card re

Money Laundering (ML): An illegal activity designed to con

passing them through accounts and businesses in transac

Money Transmitter License (MTL): Every US state has a reg

Many (but not all) states require institutions that handle pa
and procure a license to operate in their state.

Multi-Factor Authentication (MFA): A defense against hack

and pieces of information in order to gain access to an on

National Automated Clearing House Association (NACHA

ACH.

Near Field Communication (NFC): A form of communicati

devices for payments that allows devices to communicate
transactions.

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 Net Settlement: The final (net) effect of a series of paymen
banks.

Network Fees: Fees charged for payment transactions by

interchange fees.

Non-Bank: A financial institution that does not offer bankin

Originator: The institution that initiates a wire transfer or AC

Payfac: See Payment Facilitator.

Payment Facilitator: A very specific and highly regulated p

the Payment Facilitator participates in the settlement of fu
Payment Facilitator. And WePay offers Core to businesses
to become a Payment Facilitator, the business must deplo
onboarding submerchants, managing risk and meeting re
they operate.

Payment Card industry (PCI): The credit, debit, prepaid an

the requirements that they have set out that provide secur
architecture, software design and more.

Payment Card Industry Data Security Standard (PCI DSS)

the payment card industry. A requirement for merchants a
requirements that are used extensively across almost all c

PCI compliance: A common term used to indicate that a p

Industry Data Security Standard (PCI DSS) requirements. F
penalties or the suspension of the ability to make card tran

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 Payment Rails: Any form of financial technology that reliab
business to another. The most common examples of Paym
Automated Clearing House (ACH) Network. Blockchain is

Payee: The person/business/organization that receives a p

Payment Service Provider (PSP): Provides online services

payment methods including credit card, direct debit, bank
designation by Visa and Mastercard that allows merchants

PIN Authorization Request (PIN verification): A procedure

PIN to a card account.

Point of Sale (POS): Both the device used to conduct a tra

Typically refers to a card swipe or chip reading pad conne

POS Terminal: The actual device at a point of sale (POS) th

and forward the transaction details.

Prepaid Cards: Debit card that is acquired with a balance

the cardholder to spend up to the amount deposited into

Reason Code: A code used to provide additional informat

or change in status. Information covered could include a c
collection, funds disbursement, or request for a source do

Receiving Depository Financial Institution (RDFI):

from relevant parties.

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 Reconciliation: The process through which incoming and

Reserve account: For high-risk merchants, an account tha

bank requires reserve accounts to cover chargebacks, dis
organizations require reserve accounts of all new merchan

Retrieval request: When a cardholder or issuing bank wan

issuing bank sends a retrieval request. The merchant has a
Typically a failure to respond will result in a chargeback an
the merchant.

Routing Transit Number (RTN): In the US, the nine digit cod
bank where the account is held.

Settlement: The transfer of funds to satisfy a payment tran

granted, the funds travel back to the acquiring bank and th
deducted along the way.

Settlement Statement: A statement provided to a merchan

activity, billing information, fees and chargebacks (if any) t

Swipe Fees: Another term for interchange fees.

Void: Cancellation of a payment transaction and also canc

merchant.

White Label Payment: A payment solution available from a

as software platforms, embed and rebrand as part of their
of a White Label Payment solution.

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 Discuss th
Learn more about whic

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 About Us
Our Story
Careers
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 © 2023 WePay

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