Online Payments Glossary
All
| Term | Definition |
|---|---|
| Acquiring Bank |
An acquiring bank (also know as a Merchant Bank) is a financial organisatiton that is licensed as a Visa/MasterCard member. They issue Internet Merchant Accounts to the Merchant to allow the acceptance of credit card payments. They are responsible for ensuring the Merchant is compliant with Card Network Regulations. |
| Authorisation |
This is the term used to describe the entire process of sending credit card details to the card's issuing bank in order to get approval for the funds requested. |
| Card Not Present (CNP) |
Card Not Present also known as Customer Not Present is the term used to describe when a transaction takes place where the card is not physically present at the time of purchase. Examples of such purchases would be Mail Order, Internet Order or Telephone Order. |
| Card Present (CP) |
Card Present also known as Customer Present is the term used to describe when a transaction takes place where the card is physically present and passed to the merchant at the time of purchase. Typical examples of this is paying for your groceries at a supermarket checkout or paying for a meal in a restaurant. |
| Card Verification Code (CVC) |
This is a security code used as a fraud protection measure for online transactions. It is a 3 digit number that is printed on the back of Visa, MasterCard, Switch and Solo cards. For American Express cards it is a 4 digit number that is printed on the front of the card. |
| Cardholders Financial Institution |
See Issuing Bank. |
| Chargeback |
A Chargeback occurs when a customer successfully disputes a transaction with their issuing bank and has the transaction reversed. In most cases the merchant will take the hit of this reversal. |
| Continuous Authority |
Continuous Authority is a type of online payment transaction where the cardholder grants written permission to a merchant to periodically charge their card. It is typically used for subscription type recurring payments. After the initial transaction has been processed the card is considered safe. Subsequent transactions do not require the CVC value or the expiry date to be included. |
| Credit Card |
Credit cards allow the bearer to pay a merchant for goods or services without the need to hand over cash at the time of the transaction. A credit card issuer extends a line of credit to the bearer of the card that allows them to pay the merchant immediately. The cardholder then pays the card issuer a later stage. |
| CSC | |
| Customer Not Present |
See Card Not Present. |
| Customer Present |
See Card Present. |
| CV2 | |
| CVC2 | |
| Debit Card |
A Debit Card is similar to a Credit Card except there is no line of credit instead purchases are automatically deduced from the cardholder's account. Visa and MasterCard both offer debit cards through financial institutions. |
| Decline |
This is the term used to describe the denial of an authorisation request. Reasons include insufficient funds or suspicious activity on the card. |
| Fraud |
In online payment terms, fraud generally refers to fraud against the merchant as the cardholder is generally protected from loss. Fraud against the merchant generally comprises of a fraudster using valid but illegally obtained credit card details to obtain goods or services from the merchant. The merchant commits to the transaction in good faith and releases the goods or carries out the service. At some stage after that the genuine card holder checks their credit card statement and notices the fraudulent transaction. They will contact their card issuer and query the transaction which will more than likely end up with a chargeback for the merchant and a reimbursement for the card holder. |
| Fraud Control Checks |
Fraud Control Checks are carried out in an effort to screen potentially fraudulent transactions. Your payment processor can advise you on what level of fraud control they employ. Examples of such checks might be determining the geographic region of the Credit Card and checking it against a list of high risk areas or determining how many times a card has been used in the last 24 hours. |
| Internet Merchant Account (IMA) |
This is a agreement between a merchant and an acquiring bank that enables the merchant to accept payments through online systems. |
| Issuing Bank |
An issuing bank is the financial institution that issues a credit card or debit card to the cardholder. It is also known as the cardholder's financial institution. |
