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Glossary of Terms
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Capture
The process by which the information in a credit card authorization is sent by the credit card processing
system to the authorized cardholder's bank to obtain money for goods and services delivered.
Card Association
A specific credit card company, i.e. Visa, MasterCard, American Express, and Discover.
Card Issuer
Financial organizations authorized by a regulatory organization to issue credit or debit cards to
individual cardholders. Also called Cardmember Bank.
Card Reader
Device used to access information from the magnetic stripe of a plastic credit or debit card.
The magnetic stripe contains essential cardholder and account information that is necessary for processing
transactions.
Cardholder
The authorized user to whom a credit card has been issued. Also referred to as cardmember.
Cash Advance
Cash that is received by a cardholder and appears as a charge on their credit card bill.
Cash advances can be distributed by a bank teller or an ATM machine.
Chargeback
A returned transaction resulting from the lack of adherence to the conditions of the Sales
Agreement, Association regulations or the Operating Procedures and the resultant debiting of a merchant
account. A chargeback occurs when a card holder disputes a credit card transaction. The card issuer
initiates a chargeback against the merchant. The amount of the disputed transaction can be immediately
withdrawn from the merchant's bank account, and the merchant has a limited number days in which to dispute
the chargeback with proof of purchase, signature, proof of delivery, etc. A chargeback fee is usually assessed
to the merchant on top of the actual transaction. See also retrieval request.
Chargeback Ratios
A comparison between the number of credit card authorizations and the number of
chargebacks that one merchant services account acquires.
Check Guarantee Service
A service provided through the merchant' s POS equipment that guarantees payment
up to a defined limit, provided the merchant follows proper steps in accepting the check.
Check In
Authorization of card for hotels or rentals
Check Out
Finalizing sale of authorization from check-in.
Clearing
The process of exchanging financial transaction details between an acquirer and an issuer to facilitate
posting of a cardholder's account and reconciliation of a customer's settlement position.
Compliance
Adhering to the Visa and MasterCard regulatory bylaws.
Consumer
The customer who will be purchasing goods or services from you, the merchant-in this case using a credit card.
Corporate Card
A card issued to corporate clients who provide them to their employees for reimbursable
business expenses. The clients can establish individual spending limits for each employee.
Credit
A refund or price adjustment given for a previous purchase transaction.
Credit Card
A card that enables the cardholder to purchase goods or services against a line of credit established by the issuer.
Credit Card Authorization
Approval by, or on behalf of, the credit card issuer to validate a credit card
transaction for a merchant or another affiliate bank.
Credit Card Processors (or third-party processors)
Merchant services providers that handle the details of processing credit card transactions between merchants, issuing banks, and merchant account providers.
Credit Card Sales Draft
A hardcopy of the contract between the merchant and the authorized cardholder
when a credit card transaction has taken place.
Credit Draft
A document evidencing the return of merchandise by a cardmember to a merchant, or other
refund made by the merchant to the cardmember.
Credit Limit
The maximum balance that an issuer has approved for the cardholder to carry on a credit card account.
Currency Conversion
The process by which the transaction currency is converted into the currency of
settlement or the currency of the issuer for the purpose of facilitating transaction authorization, clearing, and settlement reporting.
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