Definitions

Question 1

Acquiring Bank

Answer 1

Is the bank or financial institution that processes credit and/or debit card payments for a merchant

Question 2

Authorization

Answer 2

An authorization will generate an approval code, which follows the life of the transaction throughout the processing systems

Question 3

Batching

Answer 3

Authorized transactions are stored in batches, either in the terminal or on the processor’s host, which are sent to the acquiring clearing processor on a predetermined schedule, also known as Auto Batch

Question 4

Card Brands

Answer 4

Is a network of issuing banks and acquiring banks that processes brand-specific payments

Question 5

Card Holder

Answer 5

An End user or consumer

Question 6

Card Issuer

Answer 6

Any banking institution that provides credit or debit cards to a consumer

Question 7

Chargeback

Answer 7

An event in which money in a merchant account is held due to a dispute relating to the transaction

Question 8

Clearing and Settlement

Answer 8

Acquirer sends the batch transactions through the card brand, which debits/credits (if chargebacks and returns exceed sales for the day) the issuer for payment and credits/debits the acquirer

Question 9

Credit Card

Answer 9

Allows the cardholder to buy goods and services based on the cardholder’s promise to pay for these goods and services at a later date

Question 10

Debit Card

Answer 10

Provides the cardholder electronic access to his or her bank accounts at a financial institution

Question 11

Funding

Answer 11

Once the acquirer has been paid, the acquirer pays the merchant

Question 12

Independent Sales Organization

Answer 12

An organization or individual registered with a card brand (visa/mastercard) and has a payment card relationship with an acquirer or issuer to perform functions on behalf of the acquirer/issuer

Question 13

Merchant

Answer 13

Any business that accepts credit or debit cards for payment in exchange for goods and services

Question 14

Mobile Payment Solution

Answer 14

Consists of a device and software application (typically a smart phone application and card reader) that process transactions with a debit or a credit card via a cellular (wireless) data network

Question 15

Payments Processor

Answer 15

Is a company (often a 3rd party) appointed by a merchant to handle payment card transactions for acquiring banks

Question 16

PIN Entry Device

Answer 16

Are electronic devices used in debit or smart card-based transactions to input and encrypt to cardholder’s Personal Identification Number

Question 17

Point of Sale

Answer 17

A device that processes transactions with a debit or a credit card, via a telephone line or internet connection, typically powered by a power cord

Question 18

Service Provider

Answer 18

A company or organization that provides transaction processing solutions to merchants; any sales office that offers payment services to merchants

Question 19

Virtual Terminal

Answer 19

A payment Gateway service provider allowing the merchants to accept cards and electronic check payments through their websites over an IP (Internet Protocol) connection

Question 20

wWireless Terminal

Answer 20

A device that processes transactions with a debit or a credit card via a cellular (wireless) data network, typically powered by battery pack