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National Restaurant Association - Glossary: Payments

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Payments HQ

Glossary: Payments

A

account data compromise event (ADCE)
An event in which account data may have been compromised that could lead to unauthorized use of the cardholder's account. An account data compromise event does not mean that account data was wrongfully disclosed or used, but that account data may have been wrongfully disclosed or used.

authentication
In security, ensuring that the message is genuine, that it has arrived exactly as it was sent, and that it comes from the stated source.

authorization
Approval of a transaction by or on behalf of an issuer according to defined operations regulations. The merchant receives, via telephone or authorization terminal, this approval to process the transaction.

Automated Clearing House System (ACH)
One of the group of processing institutions that have networked together to exchange (clear and settle) electronic transactions.

B

bankcard
A payment card issued by a bank or other financial institution, such as a MasterCard® or American Express® card.

batch processing
A type of data processing operation and data communications transmission where related transactions are grouped together and transmitted for processing, usually by the same computer and under the same application; generally regarded as non-real-time data traffic comprising large files; type of data traffic where response time is not critical.

brand mark or mark
The proprietary combination of names, symbols, and colors that visually conveys a brand's identity and personality.

C

card acceptor
A merchant or an ATM that accepts a card and presents transaction data to an acquirer.

card account
A credit line for deposit facility accessed by a card issued to a cardholder that enables the cardholder to purchase goods and services or obtain cash.

card payment system
A payment system supporting payments made by financial transaction cards.

card validation code (CVC)
A card security feature. CVC 1 is a three-digit value encoded on Tracks 1 and 2 in three contiguous positions in the discretionary data field of a magnetic stripe on a MasterCard card, Maestro branded card, or Cirrus branded card. CVC 2 is indent-printed into the tamper-evident signature panel on a MasterCard card. Chip CVC is a three-digit value encoded in the Track 2 Equivalent Data field in three contiguous positions within the discretionary data field of the chip on a MasterCard card, Maestro branded card, or Cirrus branded card. The CVC is intended to inhibit the alteration or misuse of card data and enhance the authentication of the card.

co-branded card
A card issued by a member in association with a commercial company, typically bearing the brand of both.

credit card
A plastic card bearing an account number assigned to a cardholder with a credit limit that can be used to purchase goods and services and to obtain cash disbursements on credit, for which a cardholder is subsequently billed by an issuer for repayment of the credit extended at once or on an installment basis.

D

debit card
A plastic card used to initiate a debit transaction. In general, these transactions are used primarily to purchase goods and services and to obtain cash, for which the cardholder's asset account is debited by the issuer.

debit transaction
A transaction initiated when a card is presented as payment for goods and services or at an ATM for cash withdrawals. The transaction amount is automatically deducted from the cardholder's demand deposit or other bank account.

E

e-commerce transaction
The non-face-to-face payment for goods or services by use of electronic media over a public network (such as the Internet) or private network (such as an extranet).

electronic commerce
The exchange of goods and services for payment between the cardholder and merchant. The transaction is performed (completely or partially) via electronic communication.

electronic funds transfer (EFT)
A paperless transfer of funds initiated from a terminal, computer, telephone instrument, or magnetic tape.

F

financial institution
Any commercial bank, federal or state savings and loan association, federal or state savings bank, or credit union.

fraudulent merchant
A retailer, or any other person, firm, or corporation that agrees to accept credit cards, debit cards, or both; and engages in an unauthorized transaction occurring on any of the cards offered by one of the card brands.

I

interchange
The exchange of transaction data between acquirers and issuers in accordance with MasterCard rules.

interchange fee
A fee applied to an interchange transaction, applicable to the two members participating in the transaction as issuer and acquirer.

M

magnetic stripe
The magnetically encoded stripe on the bankcard plastic that contains information pertinent to the cardholder account. The physical and magnetic characteristics of the magnetic stripe are specified in ISO Standards 7810, 7811, and 7813.

magnetic stripe reader
A device that reads information recorded on the magnetic stripe of a card.

merchant agreement
A written agreement between a merchant and an acquirer containing their respective rights and performance obligations with respect to card acceptance.

merchant authorization
The means of receiving sales validation for the merchant, by telephone or authorization terminal, to guarantee payment to the merchant.

P

personal identification number (PIN)
A four- to 12-character alphanumeric code that enables an issuer to authenticate the cardholder to approve an ATM or terminal transaction occurring at a point-of-interaction (POI) device.

point of interaction (POI)
The location where a transaction occurs (formerly point of sale or point of service).

point-of-sale system
An electronic system that accepts financial data at or near a retail selling location and transmits that data to a computer or authorization network for reporting activity, authorization, and transaction logging.

processing fee
Compensation paid by issuers or acquirers to a financial network organization for processing interchange transactions according to the business agreements established by that financial network. Fees are determined by each transaction type for issuers and acquirers participating within each individual financial network.

processor
The processor provides authorization and/or clearing and settlement services on behalf of a member.

MasterCard, www.mastercard.com, is a technology company in the global payments industry. MasterCard operates the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone.


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