Terms to Know

Magnetic Stripe

A stripe of magnetic information that is affixed to the back of a plastic credit or debit card. This stripe contains customer and account information that is required to complete electronic financial transactions. The physical and magnetic characteristics of this stripe are specified in the International Organization for Standardization standards 7810, 7811 and 7813.

Magnetic-Stripe Data

Also referred to as “track data.” Data encoded in the magnetic stripe or chip used for authentication and/or authorization during payment transactions. Can be the magnetic stripe image on a chip or the data on the track 1 and/or track 2 portion of the magnetic stripe.

Mail Order/Telephone Order (MOTO)

A transaction where a cardholder orders goods or services from a merchant by telephone, mail or other means of telecommunication, and where neither the card nor the cardholder is present at the merchant outlet.

MasterCard

MasterCard is a global bank card payments brand and network that provides its services to banks and merchants as follows:

  • Franchisor:  Through the thousands of financial institutions that are MasterCard’s customers, the company markets a strong portfolio of brands and products worldwide, including MasterCard, Maestro®, Cirrus® and MasterCard® PayPass™.  With these, MasterCard offers a network of more than 24 million acceptance locations around the world and, in many cases, guarantees payment through its system.  (It does not, however, issue cards, set annual fees, determine annual percentage rates on cards, or solicit merchants to accept cards.  MasterCard’s customers, a myriad of financial institutions worldwide, manage the relationships with their cardholders and with merchants.)
  • Processor:  MasterCard’s processing enables efficient commerce on a global scale. 

MasterCard Acquirer

A member that signs a MasterCard merchant agreement or disburses currency to a MasterCard cardholder in a cash disbursement, and directly or indirectly enters the resulting transaction receipt into interchange.

MasterCard Issuer

A member that issues MasterCard cards.

Merchant

A person or company selling products or services to consumers, contracted with a merchant bank or ISO to originate credit card, debit card, stored value, and/or EBT transactions.

Merchant Bank

Bank that has a merchant agreement with a merchant to accept (acquire) deposits generated by bankcard transactions.

Merchant Identification Number (MID)

This number is generated by a processor/acquirer and is specific to each individual merchant location. This number helps to identify the merchant during processing of daily transactions, rejects, adjustments, charge-backs, end-of-month processing fees, and more.

Near Field Communication (NFC)

A set of standards for smartphones and similar devices to establish radio-communication with each other by touching them together or bringing them into proximity, usually no more than a few inches. NFC devices can be used in contactless payment systems, similar to those currently used in credit cards and electronic ticket smartcards, and allow mobile payment to supplement these systems.

Office of the Comptroller of the Currency (OCC)

The government agency, a division of the Treasury Department, that is responsible for regulating the national banks that issue credit cards in the U.S.

Payment Card Industry Data Security Standards (PCI DSS)

The PCI DSS is an information security standard for organizations that handle cardholder information for the major debit, credit and point of service cards. The PCI DSS standard includes requirements for security management, policies and procedures.  Details can be found at https://www.pcisecuritystandards.org/security_standards/

PCI

Payment Card Industry.

PCI Compliance

Adherence to the industry-mandated security standards (PCI DSS and PA-DSS) that apply to all businesses that handle, process or store credit or debit cards. Businesses much meet the set requirements of the standards in order to be deemed "PCI compliant."

PCI Compliance Level

All merchants fall under four categories of PCI compliance (Level 1, Level 2, Level 3 and Level 4), depending on the number of transactions they process each year, and whether those transactions are performed from a brick and mortar location or over the Internet. Each merchant must meet the compliance requirements for their PCI compliance level.

Point of Interaction (POI)

The initial point where data is read from a card. An electronic transaction-acceptance product, a POI consists of hardware and software and is hosted in acceptance equipment to enable a cardholder to perform a card transaction. The POI may be attended or unattended. POI transactions are typically integrated circuit (chip) and/or magnetic-stripe card-based payment transactions.

Point of Sale (POS)

A location where credit card transactions are performed with the cardholder present, such as a retail store. The card is read magnetically, and the cardholder's signature is obtained as insurance against the transaction. EMV transactions additionally use a PIN and cryptographic algorithms to provide authentication of the card to the POS system.

Point-to-point encryption (P2PE)

Security process that ensures cardholder data is protected from card swipe all the way through to the host. The valuable cardholder data is encrypted prior to performing an electronic payment transaction, making it useless to potential theft,

Post-Authorization (Post-Auth)

Completion, or settlement, of a sale in which Pre-Authorization has occurred. At this point, the cardholder’s issuing institution would remove the authorization hold and release funds for payment to the merchant.

Posting

The process of updating individual cardholder account balances to reflect merchandise sales, instant cash, cash advances, adjustments, payments and any other charges or credits.

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