Glossary of Terms

Both novice and established merchants can always use a little knowledge booster. Listed are some of important banking and merchant account terms that you might find useful as you look for the right merchant account service for your e-commerce business.

Acquirer / Acquiring Bank
An organization licensed as a member of Visa / MasterCard as an affiliated bank or bank/processor alliance that is in the business of processing credit card transactions for businesses (acceptors) and is always acquiring new merchants.

Address Verification Software (AVS)
A product designed to combat fraud by checking if the billing address provided by the cardholder matches the credit card address information.

Bank Identification Number (BIN)
BIN is the acronym for bank identification number. A BIN check can be used as an effective form of fraud protection.

Cardholder
The person / business to whom a card has been issued by a bank.

Chargeback
A transaction reversal. A chargeback is the process by which a consumer disputes a charge on his credit card statement, which usually results in the bank reversing or "charging back" the disputed amount to the merchant and then crediting the consumer. May be caused by a number of reasons such as double-charging, credit card expiration, bank error or customer dispute. eMerchantPay effectively minimizes chargebacks by utilizing a secure payment gateway with fraud-protection measures.

Credit Card
A bank-issued card that entitles the holder to a line of credit for purchase of goods or services. The cardholder then pays the issuing bank in full or on installment basis upon billing.

Fraud Scrubbing
Methods by which a processor evaluates transactions to determine its legitimacy

Encryption
The scrambling of a file to make it unreadable except by the intended recipient who possesses the means of unscrambling it.

High-Risk Account
VISA considers any website selling downloadable, digital merchandise and/or services or those falling within Merchant Category Code 5967, to fall within the "high risk" category. Gambing, gaming, pharmaceuticals and adult sites fall under the high risk category, along with several other industries.

Internet Payment Service Provider (IPSP)
An Internet Payment Service Provider (IPSP) is an online entity that enters into a contract with an Acquirer (Merchant Bank) to shoulder financial responsibility and liability for "high risk" merchant accounts, by which registered sponsored merchants (website owners) are allowed to process and settle Internet transactions.

Issuing Bank
The bank that has issued a credit card to an individual or a business.

Merchant Account
An account that is established by a merchant to receive payments via credit cards.

Payment Gateway
A payment gateway allows credit card information to be collected and passed over the Internet. A payment gateway can be thought of as a digital equivalent to a credit card processing terminal. You can choose between PayLink and PayDirect for a payment gateway solution that best suits your business needs. Know More

Secure Socket Layer (SSL)
A method of encryption and data protection used by online merchant websites.

Terminated Merchant File
A negative database kept by credit card associations. Once placed in this list, businesses and its principals will never be able to escape and will be permanently barred from ever accepting credit card transactions again.

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