Payment Processing and Credit Card Glossary - for business owners.

Acquirer: Obtains merchant's credit card transactions and processes them for payment.

Authorization: The process of verifying the credit card has sufficient funds (credit) available to cover the amount of the transaction. An authorization is obtained for every sale.

Bankcard: A MasterCard or Visa credit card.

Batch: The collective amount of transactions in the merchant's terminal or POS device that have yet to be settled.

Cardholder: Person that uses a credit card to purchase goods and services.

Close: The process of sending the batch for settlement.

Commercial Cards: Credit cards used by businesses to cover expenses such as travel and entertainment and purchasing.

Corporate Card: Credit card used for business-related expenses such as travel and entertainment.

Debit card: Credit card whose funds are withdrawn directly from the cardholder's checking account.

Discount rate: A collection of fees charged by the acquirer to process the merchant's transaction.

Electronic Cash Register (ECR): A device used for cash sales. Can also be integrated to accept credit cards.

Electronic Draft Capture (EDC): Process of electronically authorizing, capturing and settling a credit card transaction.

Fleet cards: Private label credit cards designed mainly for repairs, maintenance and fueling of automobiles.

Interchange: The fees assessed a transaction by MasterCard and Visa.

Independent Sales Organization (ISO): [U.S. Merchant Services].

Companies which independently solicit prospective merchants for MasterCard and Visa. ISOs may either assume partial or shared financial liability for merchant activity.

Merchant: Customer of U.S. Merchant Services.

Merchant number: Identifying number assigned to each merchant.

Network: Company used to authorize and capture credit card transactions.

Private Label: Credit or debit card that can be used only within a specific merchant's store.

Purchasing Card: Credit card used by business to cover purchasing expenses.

Settlement: Process of sending the merchant's batch to the network for processing and payment.

Software: Programming which determines the characteristics and features of the terminal.

Smart card: A credit-type card that electronically stores account information in the card itself.

TE card: Credit card used by businesses for travel and entertainment expenses.

Terminal: Equipment used to capture, transmit and store credit card transactions.

Value Added Reseller (VAR): Third party which enhances or modifies existing hardware or software, adding value to the services provided by the processor or acquirer.