Acquirer, Acquiring Bank, Acquiring Institution
The financial institution supplying the merchant with means to accept credit cards for payments. The financial institution will charge the merchant a fee for providing these services.

Automated Clearing House - Allows for the exchange and settlement of electronic payments between financial institutions.

Application Programming Interface - An interface allowing integration with virtually any programmable software package or platform.

Address Verification Service - Typically used for mail order/telephone order transactions, an AVS response is given to indicate the level of accuracy of a given address based on the billing address of the customer's credit card.

A transaction verifying the availability of funds in a cardholder's account to make the purchase (usually identified by an Approval Code).

Auto Close
The feature allowing some gateways and terminals to automatically batch transactions daily without them being initialized by the merchant.

Card Issuing Bank
The financial institution that issues a credit card. This institution is responsible for issuing the statement and collecting the payments on the card.

Card Not Present
A transaction where the card is not present at the time of the transaction (moto/ecommerce). Credit card data is typically manually entered instead of swiping the card.

A person who holds a payment card account.

A credit card transaction is billed back to the merchant after a sale has been completed typically on behalf of the cardholder. The cardholder usually has disputed the transaction because of dissatisfaction or failure to deliver.

Close Batch
The process of sending a batch of transactions for settlement.

Discount Rate
The fee charged by the merchant financial institution to the merchant for services associated with processing card transactions.

Device which passes data between networks having similar functions but different implementations.

Interchange Fee
A fee set by and collected by the bankcard association from the merchant financial institution and paid to the issuing financial institution to cover processing and float expenses incurred in billing the cardholder.

IP Address
An internet address usually represented in dotted decimal, e.g. "".

Independent Sales Organization - ISOs act as a third-party between the merchant and the acquiring bank. Many businesses are unable to obtain merchant status through an acquiring bank because they are viewed as too large a risk, and need to go through an ISO to obtain merchant status.

Mail Order/Telephone Order - Credit card transactions initiated via mail, email or telephone. Sometimes ecommerce transactions are referred to as MOTO instead of ecommerce.

Non-Qualified Transaction Fees
Bankcard sales transactions that do not meet set Mastercard & Visa criteria for that particular merchant and are processed at a higher interchange rate.

Purchasing Cards
Charge cards used by businesses to cover purchasing expenses, such as raw materials or office supplies.

Third-Party Processor
A company that provides a variety of bank/merchant services including billing, reporting, customer service, authorization, and settlement services on behalf of the acquiring financial institution.

Value Added Reseller - Third-party vendor that enhances or modifies existing hardware or software, adding value to the services provided by the processor or acquirer.