Merchant Processing: The ability of a merchant to accept a transaction payment through a secure channel. The types of payments that are covered include:
- Credit cards
- Debit cards
- ACH transactions (sometimes called EFT)
Payment Processor: A company (often a third party) appointed by a merchant to handle transactions from various channels such as credit cards and debit cards for merchant acquiring banks.
Payment Gateway: An e-commerce service that processes credit card payments for online and traditional brick and mortar stores. Payment gateways facilitate these transactions by transferring key information between payment portals such as web-enabled mobile devices/websites and the front-end processor/bank. Payment gateways fulfill a vital role in the e-commerce transaction process, authorizing the payment between merchant and customer.
Merchant of Record: A merchant of record is the organization that assumes the overall liability of any outstanding credit or debit balance on a merchant account. The merchant of record typically handles the administrative duties of the merchant account such as statements, PCI compliance, in addition to the fiduciary liability held.
Batch Processing: Batch processing (also known as batch clearing) involves the exchange of transaction information twice, which is why it is also referred to a dual message processing. In dual message processing, the authorization occurs at the time of the transaction, through only one message and then the clearance is done later through another message. The clearing messages from the daily transactions are typically collected into a batch for the POS devices. At the end of the day, the batch is sent to the processor as part of the end-of-day processing. Device-capture and processor host-capture systems typically use dual message processing.
Real-Time Processing: In real-time processing, all transaction information flows online. If the final amount is known at the time of the authorization request, the same online message also provides the issuer with all the data needed to clear the transaction and post it to its cardholder’s account. This convenience is why real-time processing is also referred to as single message processing.
Chargeback: The return of funds to a consumer, initiated by the issuing bank of the instrument used by a consumer to settle a debt. Specifically, it is the reversal of a prior outbound transfer of funds from a consumer's bank account, line of credit, or credit card.
PCI: The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards designed to ensure that all companies that accept, process, store or transmit credit card information maintain a secure environment.
EMV (Europay, Mastercard and Visa): A global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions.
Encoded: Means the data has been transformed into another format using a scheme that is publicly available so that it can be easily reversed. Encoding does not require the use of a "key."
Encryption: Means the data has been transformed into another format in such a way that only specific individual(s) can reverse the transformation. Encryption uses a "key" to accomplish this process.