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Glossary of Payment Terms

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Glossary of Payment Terms

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1. Acquirer

This is the amount charged to a merchant on every transaction. This covers all transactions such as sales - authorizations and refunds. It’s usually bundled with the Discount Rate.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.

2. Mobile Payment

The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.This is the amount charged to a merchant on every transaction. This covers all transactions such as sales - authorizations and refunds. It’s usually bundled with the Discount Rate.

3. Issuer

The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.This is the amount charged to a merchant on every transaction. This covers all transactions such as sales - authorizations and refunds. It’s usually bundled with the Discount Rate.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.

4. Transaction Fee

An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.This is the amount charged to a merchant on every transaction. This covers all transactions such as sales - authorizations and refunds. It’s usually bundled with the Discount Rate.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.

5. Cardholder

An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.Customers of a bank that request a credit card. The cardholder will be approved by the issuer based on creditworthiness. In practice - merchants do not need to work directly with all the members of the credit card processing value chain - just ISOs/acquirers and cardholders.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.

6. Merchant

The merchant is a business owner who submits a request to an ISO/acquirer for the ability to accept credit. Merchants are approved under the qualifications set by the associations and the policy of the underwriters.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.

7. Discount Rate (Processing Rate)

The percentage of each transaction that the acquirer charges the merchant for making that transaction happen.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.

8. Mail Order / Telephone Order (MOTO)

Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.A transaction in which a cardholder orders goods or services by telephone - mail - fax - internet or other means of telecommunication where neither the card nor the cardholder is present at the merchant’s place of business. In the modern eCommerce context these types of transactions are commonly referred to as Phone Order/ Internet Order.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.

9. Average Transaction Size (ATS)

The average dollar amount of your card transactions. New businesses setting up their merchant account will always be asked about their ATS. Providing a realistic ATS ensure your funds get to your account with no delays.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.

10. eCommerce

Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.The sale of goods or services over the Internet. Electronic commerce is a broad term reflecting a wide range of commercial activities - and may include industries such as online retail or SaaS (software as a service).

11. Payment Processor

Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.Processors (Payfirma - Square - etc) are organizations that partner with acquirers to open merchant accounts - handle support - manage payment processing - and build technology on behalf of acquirers. Processors do this in exchange for a percentage of the transaction volume.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.

12. Interchange Fee

An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.A term used in the payment card industry to describe a fee paid between banks for the acceptance of card based transactions.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.

13. Card Verification Value (CCV)

An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.A unique 3 or 4 digit number found on the back - and in some cases the front - of a credit or debit card. A CVV is an extra layer of security to minimize unauthorized transactions. They are more difficult to acquire via the same illicit methods used to acquire 16 digit card numbers.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.

14. Interchange

The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.The domestic and international systems operated the Credit Card Associations for authorization - settlement - and routing of interchange and other fees - as well as other monetary and non-monetary information related to credit card activities.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.

15. Authorization

Works somewhat like a deposit in that it puts a hold on a dollar amount. Merchants use this to ensure a customer has funds available for rentals and larger transactions. Authorized payments won’t actually pay out to the merchant until the merchant captures the authorized transaction.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.

16. Merchant Category Code (MCC)

A 4 digit number classification system that is universally accepted by the Credit Card Associations and used to identify the type of business. For example - 5661 is the MCC assigned to all shoe stores.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.

17. Card Not Present (keyed transactions)

An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.This is a transaction where the physical card is not present at the time of the sale - such as mail order or telephone order. Credit card data is manually entered instead of swiped. Checking rates is important as some companies may charge more for Card Not Present transactions.

18. Credit Card Associations

The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.Associations (Visa - MasterCard - AMEX - etc.) are commonly referred to as the credit card and debit card companies. The role of the associations is to govern the policies pertaining to their bank cards - monitor processing activity - and oversee the clearing and settlement of transactions. Currently - VISA is the most popular association with approximately 65% transaction volume.

19. Merchant Account

Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.A merchant account is a type of bank account that allows businesses to accept payments by payment debit or credit cards. It is established under an agreement between a business owner and an acquirer for the settlement of payment card transactions.

20. Recurring Payment

Payment card transactions processed on a regular basis under a pre-authorized agreement. Recurring payments are commonly used by subscription or SaaS (software as a service) based businesses.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.

21. Cryptocurrency

A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds - operating independently of a central bank - such as Bitcoin.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.

22. Application Programming Interface (API)

The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.Tools that allow one piece of software to communicate with another. For example - a shopping cart plugin for a website will use the Payment Processor’s API.

23. Decline

Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.When a transaction attempt fails due to the card-issuing bank not accepting the charge.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.

24. Capture

Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.Happens when a merchant collects a previously authorized amount on a customer’s credit card and receives the funds. This is also called a settlement.

25. PCI Compliance

The issuer is the bank (Capital One - CIBC - RBC - etc.) that provides the cardholder with their credit card. They bear the responsibility of approving the cardholder - billing - and collecting the owed funds from the cardholder.An acquirer (Chase - First Data - etc.) solicits - underwrites and owns the merchant account. They provide technology and hardware - which enable the merchant to process the transaction.Instead of paying with cash - cheque - or credit cards - a consumer can use a mobile phone electronically equipped with a bank account - debit/credit card - or mobile wallet to pay for a wide range of services and digital or hard goods.The Payment Card Industry (PCI) is a 3rd party regulator of the Credit Card Associations. It has defined a set of security and compliance standards to protect merchant account holders and their customers during and after a transaction.

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❤ If you liked Fatskills, consider supporting us by checking out The Life Manuals You Never Got.

About | Explore | User Guide | Topics | Subjects | Doubt Solver | Career Aptitude Test | Answers | Free Tools | OSHA Basics Quiz | What Should We Know? Privacy | Terms |

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All trademarks, logos and brand names are the property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, trademarks and brands does not imply endorsement.

About | Explore | User Guide | Topics | Subjects | Doubt Solver | Career Aptitude Test | Answers | Free Tools | OSHA Basics Quiz | What Should We Know?
Privacy | Terms |

Without work one finishes nothing. - Ralph Waldo Emerson
© 2026 Fatskills.com