Acquirer or Acquiring Bank:  Provides the merchant with the ability to do credit card transactions. It communicates with the customer’s credit card providing bank to authorize payment and transfer money (see Merchant Bank).

Address Verification Service (AVS): Is a service that reduces the merchant’s likelihood for fraud by verifying the customer’s billing address during a credit card transaction. This occurs when the customer is not physically present to swipe their card.

Authorization: Is the process by which the merchant bank communicates with the card holder’s bank to ensure that sufficient funds exist in the card holder’s account.

Batch : This occurs when the merchant account provider submits stored transactions (usually at the close of business day) that have been authorized but not settled for processing.

Card network: Is the intermediary between the merchant account and the customer’s credit card issuing bank.

Cardholder: Is the individual that is authorized to use the card and has established an account with the credit card issuing bank. This allows the cardholder to make purchases using a credit card.

CVV2 (Cardholder Verification Value) or CVV2 (Card Verification Value): Are 3 or 4 digit numbers printed on the credit card for added security.

Chargeback: Is a credit transaction that is billed back to the merchant on the premise that the customer did not receive his good or service, or if the customer believes that he did not place the order.

Discount Rate: Is a fee paid by the merchant to the merchant account provider for handling the credit card transaction. It is charged per transaction.

Gateway: Used in an internet transaction to connect the shopping cart to the credit card processor (see Payment gateway).

Imprinter: Is a manual device used in physical transactions to create a physical imprint of the credit card on a transaction slip.

Interchange Fee:  The fee that the credit card issuer charges the merchant via the merchant account for their service to allow the merchant to accept their credit card.

Issuing Bank: The bank or financial institution that issues credit cards to the cardholder.

Keyed: Term used to describe when credit card information is manually typed “keyed” in. This method is used in lieu of “swiping”.

Merchant account: is an account provided by the acquiring bank to the merchant so that the merchant can accept payment via credit card.

Merchant Bank: (See Acquiring Bank).

Point Of Sale (POS) terminal: Is an electronic device used to collect credit card information in retail businesses by swiping the card through a machine.

Payment gateway: Allows merchants to accept credit card payments online.

Shopping Cart:  Used for online shopping to allow customers to put their purchases in a virtual shopping cart before they proceed to pay with one online transaction.

Swipe: The act of sliding a card through a Point of Service machine for processing. Used instead of “keying in” the credit card information.