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Acquirer: A licensed member of MasterCard and/or VISA (or its agent) which maintains merchant relationships, receives all bankcard transactions from the merchant, and initiates that data into an interchange system.

Address Verification (AVS): A service provided through merchant services in which the merchant verifies the cardholder's address. Primarily used by mail/telephone order merchants to combat fraud. Not a guarantee that a transaction is valid.

Average Ticket: The average size of a merchant bankcard transaction. Generally used in pricing decisions and calculations.

Automated Clearing House: Automated Clearing House (ACH) is a secure payment transfer system that connects all U.S. financial institutions. The ACH network acts as the central clearing facility for all Electronic Fund Transfer (EFT) transactions that occur nationwide, representing a crucial link in the national banking system. It is here that payments linger in something akin to a holding pattern while awaiting clearance for their final banking destination. Scores of financial institutions transmit or receive ACH entries through ACH operators such as the American Clearing House Association, the Federal Reserve, the Electronic Payments Network, and Visa.

Bankcard: A financial transaction card (credit, debit, etc.) issued by a financial institution.

Batch: The accumulation of captured (sale) transactions waiting to be settled. Multiple batches may be settled throughout the day.

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Chargeback: A transaction that is challenged by a cardholder or card issuing bank and is sent back through interchange to the merchant bank for resolution.

Demand Deposit Account (DDA): Usually abbreviated as DDA, it refers to the merchant bank account credits or debits for deposits, fees and adjustments.

Discount Rate: An amount charged a merchant for processing its daily credit card transactions.

Doing Business As (DBA): Refers to the specific name and location of the merchant establishment where credit card purchases are made.

Funding: Refers to the payment to a merchant for his submitted deposits.

Funding Account: A non-specific account type in a STAR Transaction request when the Cardholder/Account Holder does not select the specific account against which the STAR Transaction is to be processed. Also referred to as "no account specified."

Gross Deposit: Submitting bankcard sales and credits at the face amount. The acquirer later deducts the discount.

Independent Sales Organization (ISO): Also called a member service provider. An outside company (not MasterCard or VISA member) which is contracted by members to administer merchant and/or cardholder servicing.

Interchange: The domestic and international systems operated by VISA and MasterCard for authorization, settlement and the passing through of interchange and other fees, as well as other monetary and non-monetary information related to bankcard activities.

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Merchant: A retailer, or any other person, firm, or corporation that, according to a Merchant Agreement, agrees to accept credit cards, debit cards, or both, when properly presented.

Merchant Category Code (MCC): Merchant classification code which identifies the merchant by type of processing, authorization and settlement.

Merchant Statement: Merchant Statements provide information about your payment processing, including a comprehensive report of submissions, chargebacks, interchange rates, funding information and fees.

Net Payment: Payment to the merchant for sales drafts less credits minus the appropriate discount fee.

Net Revenue: Discount income less interchange expense.

point-of-sale (POS): The location of a merchant where the customer makes a purchase.

Reason Code: A code 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.

Retrieval Request: A request by the issuer to the acquirer for a copy of the actual ticket of a transaction. The initial step that the issuer takes in the event that either the issuer or the cardholder disputes a transaction.

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Sales Draft: Paper documentation of a transaction. Also called a sales slip, charge slip or hard copy.

Settlement: As the sales transaction value moves from the merchant to the acquiring bank to the issuer, each party buys and sells the sales ticket. Settlement is what occurs when the acquiring bank and the issuer exchange data or funds during that function.

Transaction Fees: Service costs charged to a merchant on a per-transaction basis.

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