Home > Merchant Account Tutorial > Internet / Mail / Phone > Glossary Terms   Glossary Terms & Definitions Automated ClearingHouse (ACH) A form of electronic payment. ACH is designed to be an "electronic check." It is typically used to process high volumes of relatively small-dollar payments for settlement within one or two business days. The networks of participating organizations that use the ACH network settle and clear electronic debit transactions through the automated clearinghouse. Acquiring Bank (Acquirer) All merchant accounts must be sponsored by a bank that is a member of the card associations (Visa & MC). They are responsible for depositing the funds into your checking account. Approval Code or Authorization Code The 6-digit code returned to the merchant upon transaction approval. Authorization An authorization reduces the cardholder's credit limit but does not actually capture the funds (charging the card). An authorization will generally be deleted after a couple of weeks. Bank Card A Visa or MasterCard credit card. It is called a bank card because it is issued by a bank, unlike an American Express or Discover card. Batch A collection of credit card transactions saved for submission at one time. Batch ID Once a batch is settled, it receives a batch ID. Every transaction in the batch shares this ID. If a transaction does not have a batch ID associated with it, the transaction has not been settled. Capture An action in which an electronic credit card sale transaction is submitted for financial settlement. Authorized credit card sales must be captured and settled in order for a merchant to receive their funds. Clearing The process of exchanging financial transaction details between an acquirer and an issuer to facilitate posting of a cardholder's account and reconciliation of a customer's settlement position. Clearing and settlement occurs simultaneously. CVC2 (card validation code 2) & CVV2 (card verification value 2) VISA and MasterCard implemented a security feature known as “CVV2” and “CVC2”. These are the three-digit numbers printed on the back side, far right of the credit card. The three-digit code helps validate that the cardholder has the card in his/her possession and the account is legitimate. You can include the code in your transaction and expect to receive a “match” or “no match” response. If you are using a shopping cart, make sure it is capable of collecting these numbers, but you are not allowed to store them per V/MC regulations. Keep in mind this is not fool proof and fraudsters can have these codes. American Express customers will have a four-digit code on the front, far right side of the card. Discover Card is the same as Visa & MC. Issuing Bank The bank that issued or maintains the consumer's credit card account Merchant ID (MID) The MID is a number assigned to a merchant to identify themselves to their provider. PIN (personal identification number) Personal identification number is used by a cardholder to authenticate card ownership for ATM or debit card transactions. The cardholder enters his/her PIN into a PIN pad. The PIN is required to complete an ATM/Debit card transaction. Recurring Transactions A transaction in which a cardholder has given a merchant permission to periodically charge the cardholder's account. Referral The message displayed on the POS terminal when an electronic attempt for authorization is denied and must be authorized by calling the Voice Authorization Center. Settlement The process by which transactions with authorization codes are sent to the processor for payment. Smart Card A plastic card containing a computer chip that can store electronic "money." It is similar in function to a prepaid calling card but is available for all purchases. Terminal ID (TID) The number assigned to a credit card processing device (such as a POS terminal). It identifies the merchant’s equipment to their processor. A TID is also used for Internet gateways and other software applications. Travel and Entertainment Card (T&E) Credit cards such as American Express and Discover Card Void To cancel a transaction that has been authorized but not yet settled. Settled transactions require them to be processed as a refund instead. Voice Authorization or Voice Auth Associated when an issuing bank sends a "Please Call” message to the merchant instead of an authorization number and the merchant must make a phone call. Rates & Fees | The GM Advantage | Sign Up Now | Reseller Program | Corporate | Contact Us Link-to-Us | Credit Card Logos | Resources | Merchant Check List | Secure SSL | Glossary ©Copyright 1999 - 2007 Got Merchant Account Partners: Web Hosting Reviews | Webmaster Resources | Best Web Hosting | HostProfessor.com