Step into the dynamic world of commerce and payments, encapsulated within this essential glossary of fundamental concepts, current terminology, and commonly encountered acronyms. Originally introduced over a decade ago by First Data, the leader in commerce facilitation, this refreshed and expanded glossary serves as your all-encompassing companion to “Payments 101” by First Data. It’s your ultimate guide to deciphering the evolving landscape of how we pay for our wants and needs.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Account Number

A unique sequence of numbers is assigned to a cardholder’s account, identifying the issuing bank or credit union and the card’s financial transaction type.

Accounts Receivable Conversion (ARC)

A process, provided by transaction processors like First Data, that electronically scans paper checks used for account receivables, converting check information into electronic data for Automated Clearing House (ACH) payments. (Also see ACH)

Acculynk

First Data’s Acculynk solutions encompass a True Debit™ gateway, facilitating cost-efficient debit routing for eCommerce merchants via PaySecure® and PINless transactions on Electronic Funds Transfer (EFT) networks. They also include PayLeap®, a comprehensive gateway and acquiring card processing service, PayGov®, an electronic bill payment and presentment solution, and Payzur, a debit-based peer-to-peer (P2P) and real-time disbursement solution.

Acquirer/Acquiring Bank

A financial institution that processes payment transactions (e.g., credit or debit card payments) on behalf of a merchant. In the payments value chain, the Acquirer enables businesses to accept credit card payments, underwrites merchant accounts, and may provide the necessary hardware and software for transaction processing. (Also see Payments Value Chain)

Acquiring

The process by which a bank or financial institution (referred to as acquiring bank or acquirer) handles credit or debit card transactions on behalf of a merchant, allowing the merchant to accept card payments for goods or services.

Address Verification System (AVS)

A security system requiring merchants to provide address information for cardholders in card-not-present transactions, such as online purchases, to the issuing institution of the credit card.

Adjustments

Adjustments are utilized by the Acquirer or the entity processing payment transactions for merchants to resolve disputes, address duplicate charges, and rectify other discrepancies.

Affinity Card

A credit card issued in partnership with an organization or collective group, such as a card associated with a professional organization, alumni group, or retired persons association. The card issuer often pays the organization a royalty to market the card to its members.

Alipay™

A third-party mobile and online payments platform belonging to the Alibaba Group®, used for online and in-store payment transactions, established in February 2004.

Alternative Payments/Local Payments

Payment methods that bypass traditional card associations, offering alternatives to credit card transactions. These methods include debit cards, prepaid or stored-value cards, direct debit, bank transfers, mobile payments, checks, cash, and money orders.

American Express®

American Express, also known as AMEX, is a multinational financial services corporation headquartered in New York City. It issues payment, travel, and expense-management solutions for individuals and businesses.

Arbitration

The process used by credit card issuers to determine whether an Acquirer (or the entity processing payment transactions for a merchant) is definitively responsible for a chargeback.

ATM Interchange Fee

The fee paid to the Acquirer Member (which processes debit transactions on behalf of merchants) by the Issuer Member (issuing debit cards to cardholders) for a STAR ATM Transaction, as determined by the STAR® Network. (See also STAR Network)

ATM Terminal Driving

This involves maintaining the physical connection and software between an Automated Teller Machine (ATM) and relevant parties, including financial institutions, processors, EFT networks, etc. First Data offers end-to-end ATM transaction processing, covering terminal driving, network/ATM/telecommunications monitoring, authorization, and routing for all major gateway connections. First Data supports virtually all ATM makes and models, using a variety of telecommunications modes.

Automated Clearing House (ACH)

This refers to the U.S. electronic network used by financial institutions for electronically transferring funds between banks, handling large volumes of transactions in batches.

Automated Teller Machine (ATM)

An electronic banking terminal located at bank branches, retail establishments, or other locations, enabling customers to conduct basic banking transactions without assistance from bank representatives. ATM usage primarily involves cash withdrawals using debit and credit cards.

Authentication

The process of verifying the identity of a credit card user, requiring the cardholder to provide confidential information, such as a Personal Identification Number (PIN), to complete a transaction or request information.

Authorization

The initial electronic request made by a merchant to a customer’s card issuer for the release of funds. This verification process ensures that a credit card holds sufficient funds to cover a transaction.

B

B2B Payments (Business-to-Business)

A form of transaction involving two or more businesses, such as a manufacturer’s payment to a wholesaler for raw materials or a retail business’s payment to its rental company. First Data offers an extensive range of commercial payment solutions.

Back-End Processor

A data company, often a third party, contracted by an Acquirer (or the entity processing payment transactions for a merchant) to provide processing and communication services. Unlike a front-end processor, which connects to card associations and provides authorization and settlement services to Acquirers, the back-end processor accepts settlement information from the front-end processor, routing payments from the card-issuing bank to the merchant for transaction completion.

Bank Identification Number (BIN)

The initial four to six digits on a payment card, identifying the bank or entity issuing the card, the issuer’s location, and the card type (e.g., credit, debit, gift).

Bank Routing Number

The first nine digits appearing at the bottom of a personal check, identifying the financial institution that issued the check.

Bank Card

Usually a plastic card issued by a card-issuing entity, often a bank or credit union, granting access to funds from a bank or credit account. Examples include ATM cards, debit cards, and credit cards.

Basis Point

A basis point, equal to one-hundredth of one percent, used to express differences in interest rates or interchange rates where variations of less than one percent are common.

Batch

A collection of captured (sale) transactions awaiting settlement. Multiple batches may be settled throughout the day.

Batch Processing

A data processing and data communication transmission method that groups related transactions for mass processing, usually handled by the same computer and under the same application.

Big Data

This term refers to exceptionally large data volumes, often encountered in the context of challenges related to collecting and analyzing extensive pools of diverse data to identify behavioral patterns. Subsequently, businesses develop strategies based on this analysis.

Bitcoin

Bitcoin is the most recognizable among a growing number of decentralized digital currencies, known as cryptocurrencies, not backed by any country’s central bank or government. Cryptocurrencies can be used to purchase goods or services, but only with vendors accepting them as payment.

Blockchain

A term commonly used in cryptocurrency transactions, referring to a digital ledger that records all transactions made in a specific cryptocurrency. Blockchains are decentralized, with copies stored on multiple computers and synchronized as needed. This enables transparent transaction tracking and verification without the need for central bookkeeping.

Breach

A term describing the unauthorized exploitation of security safeguards to access and compromise a merchant’s sensitive cardholder data.

Business Day

A standard workday, excluding government holidays and weekends, during which securities markets and most retail establishments operate. This term often specifies the timeline for payment transactions, including the number of days before funds are deposited after a transaction initiation.

C

Capture Date

The date on which an Acquirer processes a payment transaction on behalf of a merchant.

Card Account Updater

A First Data product that updates card information, such as expiration date, card number, and status, ensuring uninterrupted merchant recurring payments without requiring the cardholder to provide updated information.

Card Association

An organization owned by a financial institution that licenses bank credit card programs and performs operational functions for its members, such as transaction processing, authorizations, and interchange settlement. Examples include Visa® and MasterCard®.

CardConnect®

CardConnect is an innovative provider of payment processing and technology solutions, assisting over 67,000 organizations in accepting billions of dollars in card transactions annually. Since its inception in 2006, CardConnect has developed advanced payment solutions supported by patented, PCI-certified point-to-point encryption (P2PE) and tokenization. CardConnect became part of First Data in 2017.

Card Issuer

A financial institution, such as a bank or credit union, that directly offers payment cards (credit or debit cards) to consumers or organizations. The issuer assumes liability for card use, billing, and fund collection for card-based purchases. In the payments value chain, the card issuer compensates the Acquiring Bank for goods and services purchases by cardholders, with cardholders subsequently repaying the issuing bank as per the agreement terms.

Card Verification Value Code

The Card Verification Code is an authentication code added to a payment card during authorization. Its purpose is to verify that the cardholder conducting a card-not-present transaction possesses the credit or debit card used for the purchase. Different credit card companies use various names for the CVV code, such as CVV2 (Visa), CVC2 (MasterCard), and CID (American Express). For Visa and MasterCard, the code consists of three digits on the back of the card, while American Express displays a four-digit verification code on the card’s front.

Cardholder

The individual to whom a payment transaction card (credit and debit cards) is issued or an authorized user of the card.

Card-Not-Present Transactions

This term applies to credit or debit card transactions where the physical card is absent at the point of sale, such as online purchases.

CardPointe®

CardPointe is a comprehensive portal developed by CardConnect, enabling merchants to securely accept and manage credit card payments with ease. In addition to real-time transaction reporting, customer billing plans, and PCI compliance management, the CardPointe platform offers a suite of products, including a plug-and-play retail terminal, Virtual Terminal, mobile app, and more, catering to omnichannel payment acceptance needs.

Cash Advance

An amount extended by a bank teller or Automated Teller Machine (ATM) to a bank cardholder against the cardholder’s line of credit.

Cash Back

This term refers to an amount added to the total purchase price of a retail transaction paid by debit card, with the customer receiving that amount in cash alongside the purchased item or service. It can also denote cash amounts returned to a cardholder by a retailer or card issuer as part of a loyalty and rewards program, similar to solutions provided by First Data to credit-processing clients.

Chargeback

A demand from a credit card issuer, on behalf of its cardholder, made to a retailer to reverse a payment based on a disputed transaction or suspected fraud.

Chargeback Period

The calendar days, counted from the transaction processing date, during which the card-issuing institution has the right to charge the transaction back to the Acquirer. The number of days varies, ranging from 45 to 180 days based on the transaction type.

Check Verification

A database service offered to merchants, businesses, and individuals to verify whether a check writer has a valid checking account and a history free of bounced checks. This service does not guarantee payment to the merchant.

Chip Cards

Credit/debit cards equipped with embedded smart chips designed to enhance transaction security. These cards, also known as EMV® cards (named after the technology’s founders, Europay, MasterCard, and Visa), have become the global standard for credit and debit cards. (Also see EMV or visit the First Data EMV Information Center)

Closed Loop

This term refers to single-purpose payment cards, such as store credit cards or gift cards, which can only be used for transactions at specific stores or a group of stores owned by a company. Customers may have the option to reload funds for continued use. In contrast, Open Loop refers to using a credit card, debit card, or gift card for purchases at any location accepting payment cards, subject to the issuer’s terms and conditions.

Clover® Flex

Compact and versatile, Clover Flex is a full-featured mobile Point-of-Sale device equipped with extensive payment acceptance capabilities. It’s convenient for customers to dip, swipe, tap, enter a PIN, and sign, whether they’re in line, in the aisle, or at the table. Clover Flex also features a built-in receipt printer and scanner, ensuring the ultimate in flexibility.

Clover Go

A smartphone-ready all-in-one contactless, chip, and swipe card reader, Clover Go Contactless Reader is the go-to Point-of-Sale device for secure credit card swipes, dips, and taps, including Apple Pay®, Samsung Pay®, and Google Pay®. It offers many industrial-strength payment capabilities and security features, similar to larger Clover devices. Customers can provide their own smartphone or tablet and a free hand.

Clover Mini

A Point-of-Sale payment device providing a tablet-like user experience, Clover Mini accepts swipe, EMV-chip, and mobile-wallet payments (such as Apple Pay), while integrated tools assist small business owners in managing their operations.

Clover Station Solo

An all-in-one Point-of-Sale and payment system, Clover Station Solo combines the functionality of a cash register, card payment terminal, and POS system. It streamlines payments acceptance and business operations using a single device. Built-in capabilities enable effortless acceptance of the latest payments, faster transactions, and simplified daily business tasks.

Commercial Card

A generic term encompassing payment cards issued to businesses for use by employees in covering expenses, such as corporate cards, purchasing cards, and travel and entertainment cards. First Data offers a wide range of commercial payments solutions.

Connected Home/Connected Car

The concept involves equipping homes and vehicles with internet access, enabling interconnectivity with devices, networks, and services outside the home/vehicle. This extension enhances capabilities such as payments, safety, navigation, media/infotainment, diagnostics/efficiency, and more.

Consumer Alerts

An opt-in communication service offered by card issuers where cardholders receive alerts based on unusual or unauthorized transaction activity. For instance, First Data offers a range of customizable, real-time alerts and notifications that issuers can provide to customers. These alerts allow cardholders to decide what information they want about their accounts and how they wish to receive it. Notifications may include fraud alerts, updates on a card nearing its limit, or its use by another family member.

Consumer Authentication

Tools used to verify that the cardholder making a transaction is the authorized individual for that transaction, applicable to both in-person and card-not-present transactions.

Contactless Payments

Secure transaction method utilizing mobile devices and payment terminals equipped with radio frequency identification (RFID) or near-field communication (NFC) technologies. For example, Clover provides the latest contactless payment terminals that enable payments with a simple tap of a mobile device, including Apple PayTM.

Control Number

A unique numerical identifier used for chargeback or retrieval requests. (Also see Chargeback.)

Counterfeit Card

A fraudulent plastic card that has been printed, embossed, or encoded to resemble a genuine bank card but has not been authorized by MasterCard or Visa or issued by a member. This term can also refer to a card originally issued legitimately but subsequently altered without the issuer’s knowledge or consent.

Credit Account

An access account that allows immediate access to cash, merchandise, or other commodities in exchange for a promise to repay a definite sum at a future date, often with interest.

Credit Bureau

Companies that collect, research, and maintain credit information, selling this data as credit reports to lenders, creditors, and consumers. Prominent credit bureaus include Equifax, Experian, and TransUnion.

Credit Card

A plastic card with a credit limit used to make purchases and obtain cash advances on credit, subsequently billed to the cardholder by the issuing institution (e.g., a bank or credit union) for repayment.

Credit Limit

The maximum amount a cardholder may owe to the issuer on the card account at any given time.

Credited

The status indicating a successfully processed refunded transaction.

Cryptocurrency

A digital or virtual currency using encryption technology and operating independently of a central bank. It facilitates the creation of currency units and verifies fund transfers.

D

Dark Web

The portion of the World Wide Web intentionally hidden from search engines, generally inaccessible without specialized browser software masking IP addresses. It allows users to operate anonymously, often for illicit purposes like the unlawful trade of illegally obtained credit card data.

Data Breach

An incident in which sensitive, confidential data (e.g., credit card or personal health information) is accessed, stolen, or used by an unauthorized and untrusted individual.

Data Encryption

The process of securing sensitive data, such as credit card information, by transforming it using an algorithm. This makes the data unusable to anyone without specific knowledge, referred to as a key.

Data Security Standard (DSS)

Also known as the Payment Card Industry Data Security Standard (PCI DSS), this encompasses a set of information security policies and procedures for entities handling credit card data. It is applicable to organizations that accept, process, store, or transmit credit card information, aiming to protect this data and prevent its misuse.

Database

A vast collection of digitally stored data, organized for easy access and retrieval, such as a database containing customer names and addresses.

Debit

A charge to a customer’s deposit account.

Debit Card

Any card primarily used to access a deposit account.

Debit Network

An electronic system facilitating debit card transactions, including cash withdrawals from ATMs, online bill reconciliation, and purchases. The network’s logo, like STAR®, is displayed on the card.

Debit Transaction

The use of a bank card to make purchases or obtain cash, debiting the cardholder’s personal deposit account. First Data offers various debit processing and ATM solutions.

Decline/Declined

Refers to the refusal by a credit card issuer to authorize and proceed with a payment transaction. Declines can occur for various reasons, including suspected fraudulent activity, insufficient account balance, or an unactivated new card.

Deposit Account

A bank account allowing deposit and withdrawal of funds by the account holder. Types of deposit accounts include checking, NOW, savings, share draft, and other legal depository accounts.

Deposit Credit

See Credit Deposit.

Discount Rate

The amount charged to a merchant for processing its daily debit and credit card transactions.

Digital-Only Bank

A financial institution exclusively providing banking services via digital platforms.

Digital Wallet

Also known as an eWallet, it is a software application used with a mobile payment system to facilitate electronic payments via computer or smartphone for online transactions and in-store purchases. Digital wallets must be linked to the user’s bank account. Examples include Apple Pay and Samsung Pay. First Data offers a range of mobile payment solutions.

Doing Business As (DBA)

A secondary name legally associated with a company, also called an assumed name, fictitious business name, or trade name. It permits actions such as opening bank accounts, writing checks, entering contracts, and other business activities. Filing this secondary name is mandatory, with non-compliance resulting in fines and penalties. Sole proprietors usually file for a DBA, while for large organizations with multiple businesses and brands, a DBA helps identify true ownership for legal purposes.

Dynamic Currency Conversion

First Data® clients can offer foreign-issued MasterCard® and Visa® cardholders the option to pay for goods in their local currency at a competitive exchange rate through Dynamic Currency Conversion. Clients also earn additional revenue through a share of the margin received by First Data.

E

EBT/Electronic Benefits Transfer Cards

Electronic Benefits Transfer (EBT) refers to an electronic system that allows state government assistance programs to issue benefits to recipients in the form of payment cards, or EBT cards. Previously, state welfare agencies distributed benefits using paper coupons.

eCheck

The electronic equivalent of a paper check.

eCommerce

The buying and selling of goods and services via electronic networks, typically over the Internet. First Data offers a wide range of eCommerce solutions and services.

Electronic Banking

A form of banking where funds are transferred through electronic signals exchanged between financial institutions, as opposed to traditional exchanges involving physical cash, paper checks, or other negotiable instruments.

Electronic Bill Payment (ePay)

An alternative to paper checks for paying bills, where consumers or businesses can use computers, telephones, smartphones, or ATMs to send electronic instructions to their bank or bill-payment provider to withdraw funds from their accounts and pay merchants.

Electronic Check Acceptance (ECA)

This refers to a system that captures banking information from a paper check and converts it into data that can be processed through the Automated Clearing House (ACH) network. With ECA, checks are processed similarly to credit cards, and the paper check is returned to the consumer at the Point-of-Sale.

Electronic Funds Transfer (EFT)

This refers to the transfer of funds between bank accounts (either within the same institution or among multiple institutions) by electronic means rather than conventional paper-based payment methods or requiring the intervention of bank personnel. For instance, direct deposit, where payroll is automatically deposited into an employee’s account on a previously scheduled payment date, is an example of an EFT transaction.

EMV®

EMV is a fraud-reducing technology that can help protect issuers, merchants, and consumers against losses from the use of counterfeit and lost or stolen payment cards at the Point-of-Sale. EMV cards are embedded with a microprocessor or smart chip that interacts with the merchant’s Point-of-Sale device to ensure that the payment card is valid and, with the use of a PIN, that it belongs to the person using the card. This kind of chip technology adds layers of security against fraud and is virtually impossible to duplicate. At the moment of the transaction- when the cardholder is most susceptible to fraud- an EMV cryptogram is what keeps sensitive data away from cyber-thieves. Now the global standard for credit and debit cards, EMV is actually an acronym that represents the founding developers of the technology: Europay, MasterCard® and Visa®.

EMV Resource Center

This is a comprehensive online repository of updates and educational resources providing the latest information regarding EMV adoption.

Encryption

The technique of scrambling sensitive data automatically in the terminal or computer before data is transmitted for security/antifraud purposes.

ERP Integration

An Enterprise Resource Planning, or ERP, system is business process management software that provides an enterprise with a series of integrated applications for managing its business operations and automating many back-office functions related to technology, services, human resources, and more. First Data provides ERP Integrated Solutions that offer tight integrations with popular ERP systems like Oracle, SAP, and InforM3, delivering intuitive payment processing, eCommerce, Point-of-Sale, and supplier collaboration solutions to enterprise-level organizations.

eWIC/Electronic Women, Infants, and Children

The government assistance program Electronic Women, Infants, and Children (eWIC) is now being added in some states to process in a way similar to Electronic Benefits Transfer (EBT) cards. eWIC replaces the existing paper-based EBT program used by state welfare programs. By converting to these magnetic-stripe programs, new transaction revenue can be obtained.

Expiration Date

This refers to the date appearing on the face of a credit card, which identifies when that card is no longer valid for transactions.

Financial Institution

A financial institution is any organization in the business of moving, investing, or lending money, dealing in financial instruments, or providing financial services. This includes commercial banks, thrifts, federal and state savings banks, savings and loan associations, and credit unions.

FinTech

This term refers to the array of emerging technologies applied to enable banking and financial services functions. In the payments industry, this term often refers to technology companies competing with traditional financial institutions in the delivery of services.

First API

Basically, an API, or application program interface, is code that allows two software programs to communicate with each other. First API is First Data’s API technology that enables integration into the First Data Global Gateway, intended to save developers/clients time and resources.

First Data®

First Data is the global technology leader in payment technology and services solutions. With 24,000 owner-associates and operations in 36 countries, the company provides secure and innovative payment technology and services to more than 6 million merchants and financial institutions around the world, from small businesses to the world’s largest corporations. Today, businesses in nearly 118 countries trust First Data to secure and process more than 2,500 financial transactions per second. First Data’s unparalleled infrastructure and partnerships go “beyond the transaction” with next-generation Point-of-Sale technology fueled by powerful analytics to detect fraud, gain insights into consumer spending, and strengthen customer loyalty.

Fraud

In payments, this refers to dishonest means to perpetrate false or illegal transactions, including account takeovers, identity theft, card counterfeiting, and other illicit schemes. First Data offers a wide range of security and fraud prevention solutions.

Fraud Detect®

First Data’s Fraud Detect is a comprehensive, state-of-the-art fraud prevention solution with real-time fraud scoring and machine-learning capabilities designed to reduce a merchant’s exposure and cost of fraud.

Fraud Score/Fraud Scoring

A predictive analytics system for payment processors to assign a score, based on various models and transaction data, to assess the risk level of a pending transaction during the authorization process and determine the probability that the transaction is unauthorized or fraudulent. The fraud score assigned will determine if additional verification is required for the transaction to proceed.

Freeze

This term refers to the act of blocking a consumer’s access to credit. A credit freeze, or security freeze, is most often applied in incidents of identity theft when a cardholder wants to prevent an identity thief from opening accounts or making purchases. A freeze may also be applied by a consumer seeking to limit their own spending or to limit potential threats to a family member, such as an elderly parent.

Friendly Fraud

This refers to a scheme where a cardholder, or someone who gains access to the card, makes a purchase and then enters a chargeback based on a false claim, such as they did not receive the purchased goods or did not initiate the original transaction.

Front-end Processor

Payment processors are third parties designated by merchants to handle credit card and debit card transactions and include both front-end processors and back-end processors. Front-end processors provide the connections to the card associations, as well as authorization and settlement services. Back-end processors accept the settlement information from the front-end processor and route the payment from the bank that issued the card to the merchant to complete the transaction.

Funding

This refers to the payment to a merchant for the merchant’s submitted deposits.

Funds Transfer System

A wire transfer network, Automated Clearing House (ACH), or other communication system or clearinghouse or association of banks in which First Data’s Clearing/Funding Bank is a member and through which a payment order by a bank may be transmitted. This includes SWIFT, CHIPS, Fedwire, the NACHA® (previously the National Automated Clearing House Association), MasterCard®, and Visa®.

Gateway

In the payment industry, this refers to an eCommerce payment service to process credit card transactions and direct payments for both online and traditional brick-and-mortar businesses.

Gift Cards

A gift card is basically a prepaid stored-value card, issued by a bank or retail business, for use as an alternative to cash for the purchase of goods or services. The monetary value is stored on the card itself and not in an external account maintained by the merchant or a financial institution. First Data offers a wide range of gift card solutions for all types of businesses.

Gig Economy

This refers to a labor scenario dominated by independent contractors and freelancers, as opposed to traditional full-time employees. The contractor or freelancer is paid for each “gig” or short-term job performed. The Gig economy is a term increasingly used in reference to the rise of on-demand services (e.g., DoorDash, TaskRabbit, Uber).

Grace Period

This refers to the period of time where a cardholder is allowed to pay the balance of a credit card bill without incurring interest charges. The length of the grace period is established in the credit card agreement.

Gyft

First Data Gyft provides consumers with the ability to purchase, send, and manage plastic or digital gift cards from any device. Users can send eGift cards instantly or upload plastic cards to their Gyft wallet and redeem them from a mobile device.

H

Hacker

The term “hacker” in the payments industry is more commonly used to refer to a cybercriminal, often an expert programmer, who gains unauthorized access to systems, networks, and data to commit crimes. While the term can also refer to any skilled computer programmer, it is more often used to refer to malicious activity.

Hard Credit Pull

Also known as a “Hard Inquiry,” this is the verification process performed by a credit-card issuer or lender when a consumer applies for some form of credit (e.g., credit-card application, loan, or mortgage). Initiating this process requires consent by the individual seeking credit. Conversely, a “Soft Credit Pull” is a credit check performed by a lender without knowledge of the consumer, such as to assess if that individual prequalifies for an offer, or if a credit check is requested by the consumer.

Hold

When a final transaction total is uncertain, as in a hotel stay, an authorization hold is placed on a portion of the cardholder’s credit limit or debit balance as a pledge of collateral. Once the full amount of the transaction is determined, usually at checkout, the card is charged, and the hold is removed.

Hosted Checkout

This refers to a third-party service that enables a business to accept debit and credit payments online, such as First Data’s Payeezy Gateway, that helps ensure faster, uninterrupted online payments thanks to top processing speeds and an intelligent infrastructure.

In-App Payments

The purchase of goods or services from within a mobile application.

Incentive-to-Action

A First Data program designed to help businesses acquire, develop, convert, and retain customers by allowing them to incorporate both digital and plastic gift cards into their branding and marketing campaigns.

Independent Sales Organization (ISO)

In merchant services, this refers to an independent credit-card processing company, often an approved entity reselling services from a larger company, such as First Data, under its own company name.

Intelligent Payment Routing

The process of routing a payment transaction to the acquiring bank most likely to approve a transaction, based on specific criteria, designed to minimize the convenience of declines.

Interactive Voice Response/IVR

IVR refers to the field of telephony technology enables a computer to interact with a consumer through the use of voice commands and keypad buttons. In the payments industry, IVR is the basis for menu systems enabling identification, segmentation, and routing of inbound callers to specific agents on a customer response or call center team, or for self-service resolution. First Data IVR systems and call centers handle an average of 30 million calls per month.

Interchange

The domestic and international systems operated by MasterCard® and Visa® for authorization, settlement, and the passing through of interchange and other fees, as well as other monetary and non-monetary information related to bank card activities.

Interchange Fee

In credit-card processing, this refers to the fees paid by the acquiring bank to the issuing bank to compensate for transaction-related costs. MasterCard and Visa establish interchange-fee rates.

Interchange Network

Electronic networks managed by American Express®, Discover®, MasterCard, and Visa for the exchange of data pertaining to card transactions among issuers and acquirers. Access is required to facilitate verification for approvals and settlement. Interchange fees vary by card.

Internet of Things (IoT)

This term refers to the interconnection of everyday devices (also called “smart devices”), embedded with computer chips and sensors, via the Internet. The integration of evolving payments technology into the IoT paradigm holds promise to help revolutionize the payments industry. For example, an automobile equipped with internet access facilitating frictionless payment at the pump and other functions, otherwise known as a Connected Car, is an example of IoT technology at work.

Invoice-to-Pay

This refers to technology that enables financial institutions to provide their commercial customers with end-to-end payment automation, including integration with their back-office systems for a seamless business-management experience. Invoice-to-Pay technology seeks to supplant manual bill payment still performed with paper checks.

Issuer/Issuing Bank

An issuer is a financial institution, such as a bank or a credit union, which offers a payment card (credit or debit cards) directly to consumers (or organizations) and is liable for the use of the card. The issuer is also responsible for the billing and collecting of funds for purchases that were made using that card. In the payments value chain, the card issuer pays the acquiring bank for purchases of goods and services made by the cardholder. The cardholder then repays the issuing bank based on terms of an existing agreement. First Data is a leading provider of a wide range of processing services that support both issuers and acquirers.

 

JCB (formerly Japanese Credit Bureau)

JCB, established in 1961, has maintained its leadership position in the Japanese card industry. As Japan’s premier and exclusive international payment brand, JCB enjoys widespread acceptance in Japan and across Asia.

Joint Credit

Joint credit involves extending credit to two or more individuals or entities based on their combined income, credit histories, and assets. In such arrangements, all parties share responsibility for repaying the accumulated debt.

Knuckle-Buster

The knuckle-buster, an antiquated device seldom used today for credit card transactions, involves physically placing the card in the device and creating an impression by sliding a bar across carbon paper to capture the card’s embossed numbers. It is also known as a Zip Zap Machine.

Late Payment Fee

A late payment fee is charged to a borrower or cardholder who fails to submit the minimum required payment by the agreed-upon deadline.

Local Payments/Alternative Payments

Local payments or alternative payments are payment methods that bypass traditional card associations and serve as alternatives to credit card transactions. Examples include debit cards, prepaid cards, direct debit, bank transfers, mobile payments, checks, cash, and money orders.

Loyalty Program

A loyalty program refers to initiatives by card issuers aimed at offering incentives to cardholders for using a specific card. For instance, First Data’s Premier Loyalty Platform provides card issuers with a configurable platform for creating loyalty programs, featuring core reward program capabilities, customizable promotions, redemption centers, analytics, marketing services, and more.

MCC or SIC Codes

MCC (Merchant Category Code) or SIC (Standard Industrial Classification) codes are four-digit codes assigned by credit card companies to merchants for tracking purposes.

MICR Number Method

The MICR (Magnetic Ink Character Recognition) number method involves a check-authorization process that uses encoded bank routing/transit numbers, checking account numbers, and check numbers located at the bottom of a check.

Machine Learning

Machine learning encompasses the use of data analytics tools in the payments industry to enhance various aspects of transaction processing. It aids in more accurately predicting delinquencies and improving virtual customer service.

Magnetic Information Character Recognition (MICR)

MICR refers to the imprinted banking numbers, including routing/transit number, checking account number, and check number, found at the bottom of a check.

Magnetic Stripe

A magnetic stripe, affixed to the bank card, contains magnetically encoded cardholder account information.

Member

A member is a financial institution that holds membership with Visa USA and/or MasterCard International. Members are authorized to issue cards to cardholders and/or accept merchant drafts.

Merchant

A merchant, as defined in a Merchant Agreement with an Acquirer or Independent Sales Organization (ISO), is a retailer or any entity agreeing to accept credit cards, debit cards, or both, when presented correctly.

Merchant Acquirer

A merchant acquirer is a financial institution responsible for processing payment transactions, including credit and debit card payments, on behalf of a merchant. Acquirers underwrite merchant accounts and may provide hardware and software for transaction processing.

Merchant Agreement

A merchant agreement is a written contract between a merchant and an acquirer, outlining their respective rights, responsibilities, and warranties related to processing payment transactions.

Merchant Bank

A merchant bank primarily provides financial services, such as business loans and underwriting, to businesses. It does not offer banking services to consumers.

Merchant Identification Number

A merchant identification number uniquely identifies each merchant for accounting and billing purposes within the merchant processor’s system.

Merchant Service Provider (MSP)

A merchant service provider (MSP) is a third-party entity that offers intermediary services to help a merchant manage payment processing. MSPs may assist in managing merchant accounts with card associations or networks.

Merchant-Funded Loyalty

Merchant-funded loyalty programs are sponsored by credit card issuers, leveraging merchant partners to provide rewards and incentives for cardholders, at no cost to the issuer. This allows merchants to introduce their products and services as rewards to new customer groups, with the aim of building lasting customer relationships.

MineralTree®

MineralTree® is an invoice-to-pay technology that enables financial institutions to offer commercial customers end-to-end payment automation integrated with their back-office systems. This technology aims to replace manual check payments in B2B transactions.

Mobile Commerce

Mobile commerce refers to the purchase of goods and services conducted over the internet using mobile devices.

Mobile Payments

Mobile payments involve using a mobile device to pay for goods or services.

Mobile Wallets

Mobile wallets, also known as eWallets or digital wallets, are software applications used in conjunction with mobile payment systems to facilitate electronic payments via smartphones for online and in-store transactions. These wallets are typically linked to a user’s bank or credit card account.

Money Network®

Money Network® comprises electronic payroll delivery services offered by First Data, including Money Network Card, Money Network Checks, and related services.

NFC (Near Field Communications)

NFC, or Near Field Communications, is a contactless wireless technology that enables connectivity between devices when they are in close proximity. It is commonly used for mobile payment processing and other applications.

Net Payment

Net payment refers to the payment made to the merchant, which is the total of sales drafts minus credits, minus the appropriate discount fee.

Net Revenue

Net revenue represents discount income minus interchange expenses.

Net Settlement

Net settlement involves the actual transfer of funds to settle the net effect of a series of financial transactions between customers of two or more banks.

Non-Bank

In the context of a payment system, a non-bank refers to a financial institution or company that provides some banking services but does not offer a full range of retail banking services and lacks the legal status of a bank.

OfferWise®

The First Data OfferWise solution is an open platform that simplifies the offer redemption process and the creation of card-linked services for consumers and merchants. OfferWise allows offer publishers and application developers to create electronic offers, deals, eCoupons, and loyalty programs that consumers can attach to their payment cards or mobile wallets for streamlined and automatic redemption at the point of sale.

Office of Foreign Assets Control (OFAC)

The Office of Foreign Assets Control (OFAC) is a unit of the U.S. Department of the Treasury responsible for administering and enforcing economic and trade sanctions based on U.S. foreign policy and national security goals. OFAC imposes controls on transactions and asset freezes under Presidential national emergency powers and specific legislation.

Offline Debit Transaction

An offline debit transaction, also known as a signature-debit transaction, involves using a debit card to transfer funds from the cardholder’s bank account to the merchant via a credit card network. An interchange fee is charged to the merchant, not the card-issuing bank.

Omnichannel

Omnichannel refers to the integration of multiple retail sales channels, such as online, in-store, and mobile shopping, to provide a seamless shopping experience for buyers.

Online Debit

Online debit, also known as PIN debit, requires the cardholder to enter a Personal Identification Number (PIN) after inserting/swiping the card at the point of sale. Funds for the transaction are deducted directly from the cardholder’s bank account, and the transaction is processed on the cardholder’s bank’s ATM network, such as STAR®.

Online Payments

Online payments involve electronically purchasing goods or services over the internet, utilizing computer networks and digital stored value systems.

Open Loop

Open loop refers to the use of credit cards, debit cards, or gift cards to make purchases anywhere payment cards are accepted, subject to the terms and conditions of the card issuer. This is in contrast to closed loop cards, also known as single-purpose cards, which are restricted to use at a single store or group of stores owned by a company.

Origination

Origination encompasses the multi-step process through which a consumer or borrower applies for a new loan or credit card, and the lender or card issuer processes the application, covering all steps from submission to approval or denial.

Outlet

An outlet refers to a physical location of a retail chain within a merchant’s network.

Over-Limit/Overlimit

An account is considered over-limit when a cardholder surpasses the predetermined credit limit on their payment card. At this point, the card issuer may either decline the transaction or process it while assessing a penalty fee for exceeding the agreed-upon limit.

P

Partial Authorization

In a transaction where the purchase amount exceeds the cardholder’s credit limit, the issuer can provide a partial authorization for funds up to the limit. The merchant at the Point-of-Sale then requests an alternative payment method to cover the remaining balance of the transaction.

PayeezySM

First Data Payeezy is a payment gateway technology designed for merchants. It offers a dynamic eCommerce solution that enhances the customer experience on websites by providing more payment options, security features, and simplified integration. Customers can make payments using any card, PayPal account, or electronic checks, all in their preferred currencies.

Payment Amount

The payment amount refers to the total sum of a cardholder’s transaction submitted for payment authorization.

Payment Gateway

A web-based system used in eCommerce transactions to transfer credit card information from a computer or website to a credit card processor for verification. It facilitates the authorization process between the merchant and the consumer.

Purchasing Card / P Card

A type of commercial card issued to businesses for use by employees in transactions outside the standard corporate purchasing process.

Payment Method

The payment method is the form of payment a consumer uses to buy goods or services from a seller, such as cash, credit card, debit card, money order, or bank transfer.

Payments Value Chain

The Payments Value Chain represents the intricate ecosystem supporting a payment transaction, involving the consumer, merchant, acquirer, network (e.g., MasterCard®, Visa®), issuer, processor, and numerous third-party service entities contributing to various aspects of this process.

PCI DSS (Payment Card Industry Data Security Standards)

PCI DSS comprises common information security standards applicable to merchants, financial institutions, payment device manufacturers, software designers, processors, and other third parties handling credit cards from major card organizations. These standards aim to ensure the security of payment card account data, mandating compliance for entities that store, process, and/or transmit cardholder data.

PIN (Personal Identification Number)

A Personal Identification Number (PIN) is a confidential code used by a cardholder to authenticate card ownership for ATM or POS-terminal transactions.

PIN Authorization Request

This procedure enables the card issuer to verify the cardholder’s identity by comparing the Personal Identification Number to the account numbers.

PIN Pad

A PIN Pad is an electronic device where cardholders can enter their Personal Identification Numbers, typically at a Point-of-Sale terminal, to complete a transaction using a payment card. The PIN Pad should encrypt the PIN during the transaction for security.

PIN Verification

PIN Verification is a procedure used by the card issuer or its representatives to confirm the cardholder’s identity when a transaction request is received with the use of a PIN.

PINless Debit Transaction

A PINless debit transaction refers to a debit card transaction where the customer is not required to enter a Personal Identification Number at the point of purchase.

Plastic

In common parlance, “plastics” refers to the physical attributes of payment cards, often related to their manufacture, enhancement, and the inclusion of security features.

Point-of-Sale (POS)

The Point-of-Sale denotes the specific time and place where a retail transaction is completed.

Point-of-Sale System

A Point-of-Sale System encompasses electronic systems, including software and hardware, utilized to conduct retail transactions. Advanced POS systems, like Clover, offer a wide range of functions, including sales transactions, returns, exchanges, gift cards, customer loyalty and rewards programs, promotions, discounts, inventory management, and more.

Point-to-Point Encryption (P2PE)

Point-to-Point Encryption (P2PE) is a security standard that immediately encrypts cardholder information at the initial swipe device and securely transfers it to the payment processor, which then decrypts the data. This technology aims to prevent unencrypted cardholder data from being stored or processed in a merchant’s Point-of-Sale system, thereby reducing the risk of data breaches.

POS Terminal

A POS Terminal is a device located at a merchant’s establishment, connected to the merchant’s bank or authorization service provider via telephone lines. It is designed to authorize, record, and electronically transfer data for each sale.

Prepaid Cards

Prepaid cards are payment cards not linked to a bank account, allowing cardholders to spend only up to the pre-deposited amount. These cards are often reloadable.

Primary Account Number (PAN)

The Primary Account Number (PAN) is a numerical code, typically up to 16 digits, uniquely identifying a credit cardholder’s account. It is generated when the account is opened. The first six digits identify the card network, the following digits represent the cardholder, and the remaining digits serve security purposes.

Private Label Credit Cards

Private label credit cards are store-branded credit cards intended for use at specific retailer locations or websites. They are based on revolving credit programs managed by financial institutions or finance companies. First Data processes for more than 380 retailers nationwide, providing private label and co-branded card processing services.

Processor

A processor is a third party designated by a merchant to handle credit card and debit card transactions between the merchant and its customers. Processors are often categorized as front-end processors and back-end processors.

PSP (Payment Service Provider)

A Payment Service Provider (PSP) is a third party that enables merchants to accept electronic payments by facilitating connectivity to financial institutions and credit card acquirers.

P2P Payments

P2P Payments involve digital technology that allows consumers to transfer funds from their credit card or bank account directly to another individual’s account via a mobile device or the internet. For instance, First Data Payzur offers financial institutions a white-label solution for person-to-person mobile and web-initiated payments.

Q

Qualifying Ratio

The Qualifying Ratio represents the percentage of a credit applicant’s income used to pay existing debt obligations. Lenders use this ratio to assess creditworthiness and approve or reject credit requests.

QR (Quick Response) Code Mobile Payments

QR Code Mobile Payments technology enables customers to display a QR code on their mobile devices. This code can be scanned by a merchant’s optical scanner to facilitate payments quickly and efficiently.

QSR/Quick Service Restaurants

Quick Service Restaurants, often referred to as fast-food restaurants, offer convenient and fast food services with minimal table service. Many QSRs now leverage First Data processing and mobile payment technologies, providing customers with the convenience of ordering in advance, pre-paying via their devices, and picking up their food upon arrival.

R

Rapid Connect®

First Data Rapid Connect provides software developers with an efficient way to enable payment processing in a merchant’s physical and virtual environments through a single interface to multiple First Data platforms.

Reason Code

A Reason Code is used to provide additional information to the receiving clearing member regarding the nature of a chargeback, subsequent presentment, fee collection, funds disbursement, or request for a source document.

Receipt

A Receipt is a documented acknowledgment that a transaction occurred at the Point-of-Sale. It typically includes the date, merchant name/location, primary account number, account type, amount, reference number, and an action code.

Recurring Billing Transaction

A Recurring Billing Transaction involves charging the cardholder periodically, with their prior permission, for recurring goods and services, such as health-club memberships or book-of-the-month clubs.

RegTech

RegTech, a blend of “regulatory” and “technology,” refers to the use of technology in the financial services industry to enhance regulatory compliance more effectively than pre-existing measures. It is considered a sub-set of technologies within the field of FinTech.

Reloadable Card

A Reloadable Card is a prepaid payment card allowing the consumer to add additional funds. It is not linked to a bank account. First Data offers managed services for prepaid cards and innovative contactless payment product types.

Remittance

Remittance refers to the sum of money sent as payment for outstanding goods or services.

Remittance Information

Remittance Information is the data required by the biller to accurately post customer bill payments.

Remittance Processing

Remittance Processing, also known as receivable processing, involves the processing and clearing of payments related to consumers paying their bills. For example, First Data offers banks and businesses a range of remittance and electronic payment collection services.

Retailer

A Retailer is an individual or business that sells goods or services to the public. Many retailers now offer customers the convenience of various payment options to complete purchases across different channels, such as in-store, eCommerce, mobile shopping, and more.

Retrieval Request

A Retrieval Request occurs when a credit card issuer requests additional information from a merchant concerning a transaction involving one of the issuer’s cardholders. This request may involve transaction tickets or receipts when a charge is disputed. Retrieval requests may incur fees and penalties for non-compliance.

Routing Number

A Routing Number is a series of numbers assigned to checking accounts, savings accounts, or other accounts to identify the financial institution associated with the specific account.

S

Sales Draft

A sales draft is a paper record of a transaction. It may also be referred to as a sales slip, charge slip, or hard copy.

Secure Payment Page

A secure payment page is a web page protected with 128-bit Secure Sockets Layer (SSL) encryption. It is designed for the secure transfer of sensitive data, including credit card information, to facilitate eCommerce transactions.

Settlement

Settlement involves the exchange of data or funds between the acquiring bank and the issuer as the value of a sales transaction moves from the merchant to complete the payment process.

Settlement Error

A settlement error indicates an issue during processing that is preventing the settlement of a transaction.

Settlement Statement

A settlement statement is a document provided to the merchant, detailing sales and credit activity, billing information, discount fees, and any chargebacks that occurred within a specific period, such as a week or a month.

Shopping Cart Software

Shopping cart software allows online shoppers to select items from an eCommerce store and add them to a virtual shopping basket or cart. The shopping cart keeps track of selected items, calculates totals, and may handle tax and shipping calculations. The cart items can be purchased when the cardholder chooses to proceed.

SIC (Standard Industrial Classification) Codes

SIC Codes are four-digit codes assigned by the United States government to classify industries, helping to identify the nature of a business.

Smart Card

A smart card is a plastic card resembling a traditional credit or debit card but contains a microprocessor chip capable of storing more information than a magnetic stripe.

SpendTrend®

First Data’s SpendTrend economic analyses offer insights into transaction and dollar volume growth by payment type. These analyses aggregate retail sales data from over four million merchant locations, providing valuable information about consumer spending patterns across major retail sectors. SpendTrend helps with forecasting, model validation, and identifying sales growth opportunities.

STAR® Network

STAR Network is a leading full-service debit payment network for debit card processing, offering real-time network management, exception processing, transaction research, and marketing tools. It covers over one million Point-of-Sale and ATM locations nationwide.

Submission

Submission is the process of sending batch deposits to Merchant Services for processing, which can be done electronically or by mail.

Support Documentation

Support documentation includes forms required for chargeback processing cycles and any additional material necessary to substantiate a dispute.

T

TeleCheck®

First Data’s TeleCheck offers check acceptance, check processing, and risk analytics services while protecting customers from fraud and identity theft. It safeguards identity and checking account information for in-store, online, or phone purchases.

Terminal Identification Number (TID)

A Terminal Identification Number (TID) is a unique numerical identifier that designates the specific Point-of-Sale device or computer where a payment transaction originates. It is used by merchants, card associations, and others to trace the source of fraudulent transactions.

Third-Party Processing

Third-party processing involves service providers handling transactions under contract for card issuers or acquirers. First Data is a third-party processor.

Token/Security Token/Authorization Token

A token is a unique identifier created by an algorithmic process. It replaces sensitive credit card data during payment processing to prevent credit card fraud. Tokens can be electronically passed without exposing actual customer account data.

Token Service Provider (TSP)

The Token Service Provider (TSP) is responsible for issuing and managing tokens, including mapping customer card numbers to payment tokens.

Tokenization

Tokenization is a data security technology that substitutes non-sensitive numerical sequences for sensitive credit card data during transactions. This allows data to be transmitted over the internet without exposing it to cybercriminals.

Transaction

In payments, a transaction is an agreement between a buyer and seller to exchange an asset for payment for goods or services. It involves a change in financial status between the two parties. For example, a transaction occurs when a consumer uses a credit card to make a purchase at a retail store.

Transaction Date

The transaction date is the actual date when a transaction occurs, used for recording and tracking transactions.

Transaction Fees

Transaction fees are service costs charged to a merchant on a per-transaction basis.

Transaction ID (Trans ID)

A Transaction ID (Trans ID) is a unique code assigned to a specific credit or debit transaction for data sorting.

Transaction Status

Transaction status refers to the current state of a transaction within the processing cycle. Possible states include Authorized/Pending Capture, Captured/Pending Settlement, Credit/Pending Settlement, Declined, Voided, Credited, General Error, Communication Error, Settled Successfully, Under Review, and Review Failed.

TransArmor®

TransArmor is First Data’s security solution that protects businesses from hackers and malicious software. It provides multilayered protection for eCommerce systems, safeguards customer information, and reduces liability in case of a data breach.

U

uCommerce

uCommerce, short for Universal Commerce, refers to commerce that enables buying and selling anytime, anywhere, and on any device. Mobile devices play a central role in the user experience.

Under Review

Under Review is the practice of reviewing potentially fraudulent or high-risk transactions before submission for processing, resulting in a minor delay.

Universal Commerce for IoT/Connected Car

Universal Commerce for IoT/Connected Car is a First Data solution suite that enables secure and scalable frictionless shopping experiences (e.g., pay at the pump, mobile order and pay, loyalty/offers, smart parking) in the Internet of Things and connected car environments.

Universal Commerce for Petro/C-Store

Universal Commerce for Petro/C-Store is a First Data solution suite enabling secure and scalable frictionless shopping experiences (e.g., white-label mobile app, pay at the pump, loyalty/offers, cloud-based software) in the petroleum and convenience store sector.

Universal Commerce for QSR

Universal Commerce for QSR is a First Data solution suite that facilitates secure and scalable frictionless shopping experiences (e.g., order and pay ahead, pick up orders at drive-thru or curbside, loyalty/offers) in the quick service restaurant industry.

Universal Commerce for Retail/Grocery

Universal Commerce for Retail/Grocery is a First Data solution suite that enables secure and scalable frictionless shopping experiences (e.g., mobile order and pay, in-store scan and pay, curbside pickup or delivery, loyalty/offers) in the retail and grocery sectors.

Unauthorized Transaction

An unauthorized transaction occurs when a credit or debit card, or another method, is used for payment without authorization from the account holder, often due to fraud or cybercrime. This does not refer to an issuer declining authorization for payment on a transaction.

V

Voided

A voided transaction is a credit or debit transaction that a seller or merchant cancels after authorization but before completion and settlement.

W

Wallets

Wallets, also known as eWallets, are software applications used with mobile payment systems. They facilitate electronic payments through computers or smartphones for online transactions and in-store purchases. Digital wallets need to be linked to the user’s bank account.