Terms to Know

Compromise

Also referred to as “data compromise,” or “data breach.”  Intrusion into a computer system where unauthorized disclosure/theft, modification, or destruction of cardholder data is suspected.

Contact Card

All smart cards contain embedded integrated circuits, which is a microchip inside the card that’s programmed to work with only a specific scanner. Contact smart cards require cardholders to actually insert the card for identification purposes. Conversely, contactless (RFID) smart cards only require the cardholder to be near the scanner for reading.

Contactless Card

All smart cards contain embedded integrated circuits, which is a microchip inside the card that’s programmed to work with only a specific scanner. Contact smart cards require cardholders to actually insert the card for identification purposes. Conversely, contactless smart cards, which are commonly known as RFID (radio frequency ID), only require the cardholder to be near the scanner for reading. With a contactless card, the antenna around the embedded chip is visible on the card.

Credit Bureau

A company that catalogs and sells information regarding the payment behavior of consumers and issues credit reports with related information. The three major national credit bureaus are Experian, Equifax and TransUnion.

Credit Card

A plastic payment card that is accepted by merchants worldwide with an encoded magnetic stripe on the back and/or an encoded chip (EMV cards) that can be read at the point of sale.  Credit Cards offer card members the ability to pay balances over time by applying an interest rate to outstanding balances.

Debit

A charge to a customer’s bankcard account. A transaction, such as a check, automated teller machine (ATM) withdrawal or point-of-sale (POS) debit purchase that debits a demand deposit account.

Debit Card

A type of payment card used for transactions carrying one of the major association brands that is linked directly to a customer's bank deposit account.  ATM and some point of sale transactions require input of a four digit personal identification number, while other transaction may require a customer's signature.  Debit card transactions don’t involve credit, but rather transfer money directly from the customer’s checking account to pay for the product or service involved.

Discount Fee

Also called the “discount rate.”  The fee paid by merchants to credit card processors as a fee associated with accepting general use credit cards (like Visa, MasterCard, American Express and Discover Card).  Typically this fee runs between 1% and 3%, depending on the nature of the transaction.

Discover Card

Newest of the payment card brands, began in 1986.   Company now has over 50 million card members, but is the smallest of the four payments brands in terms of market share.  Discover Card’s payments networks:  Discover Network and PULSE:  together processed more than 3 billion transactions in 2006. Discover Network connects millions of merchant and cash access locations throughout the U.S., Canada, Mexico, Central America and the Caribbean. PULSE serves more than 4,400 financial institutions and includes nearly 260,000 ATMs, as well as POS terminals nationwide.

Durbin Amendment

A late addition to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, designed to reduce swipe fees charged to merchants by financial institutions, and thereby reducing merchant costs (and so, by extension, costs to consumers). The Durbin Amendment is a highly debated change to the processing system, with many detractors suggesting its emphasis on interchange fees—without addressing other fees that can be added to transactions—as ultimately ineffective or even raising the costs of handling electronic transactions.

EBT

Electronic Benefits Transfer.  A U.S. system that provides a way for state governments to disburse financial and other benefits via plastic debit cards.  Typically the benefits comprise food and cash.

Encryption

The process of obfuscating information via specific cryptographic keys.  The use of encryption protects valuable card data information against unauthorized disclosure, as encryption renders card information unintelligible to those who attempt to intercept the card data while in transit. 

Floor Limit

An amount that Visa and MasterCard have established for single transactions at specific types of merchant outlets and branches, above which additional authorization is required.

Fraud Alert

A security alert placed on a credit card account or credit bureau listing by either the customer of the issuer when a fraudulent account activity is either experienced or suspected (also known as a credit freeze).

Fraudulent Transaction

A transaction unauthorized by the cardholder of a bankcard. Such transactions are categorized as lost, stolen, not received, issued on a fraudulent application, counterfeit, fraudulent processing of transactions, account takeover or other fraudulent conditions as defined by the card company or the member company.

Funding

The process of the acquirer paying the merchant, after the acquirer receives payment from the issuing institution.

Gateway

Also called a payment gateway.  A secure portal that enables an electronic POS system to transmit credit card information to a payment processor for authorization and settlement. 

The Apriva Gateway provides APIs, SDKs and web services to securely integrate mobile, web, traditional and unattended POS solutions to more than 30 payment processors.

Gift Card

A general use credit card (that can be used anywhere that accepts credit cards) or private label retail card (that is only redeemable at the store from which it was purchased) that has prepaid value on it and can be given as a gift.

Interchange Fee

Synonymous with the Discount Rate, this is a fee paid by an acquirer to an issuer for transactions entered into interchange. The interchange fee is a percentage applied, according to Visa/MasterCard regulations, to the dollar value of each transaction (typically between 1% and 3%, depending on the type of transaction).

Issuer

Any association member financial institution, bank, credit union or company that issues, or causes to be issued, plastic cards to cardholders.

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