This article contains a list of glossary items and terms related to Authorize.net accounts, systems and transactions processing.

ABA Transit Routing Number

A nine-digit identification number assigned to member financial institutions and banks by the American Bankers Association (ABA). This number is used to identify the financial institution or bank associated with a customer's bank account.

Accounts Receivable Conversion (ARC)

This Authorize.net transaction type is a single-entry debit against a customer's checking account. ARC allows merchants to collect payments received in the mail or left in a drop-box and convert them to an electronic payment later. Payment authorization is obtained by posting required notices before accepting a customer's check. For more information about eCheck transaction types, see the eCheck Operating Procedures and User Guide.

Account Updater

An Authorize.net value-add solution that allows merchants to keep their stored customers information for Automated Recurring Billing (ARB) or Customer Information Manager (CIM) up to date to increase successful transactions and lower declines. For more information about our Account Updater services, see: https://www.authorize.net/resources/our-features/account-updater.html

ACH Fraud

The malicious practice by untrustworthy persons or fraudsters to use stolen bank account information to purchase merchandise, or by a legitimate account holder to purchase merchandise with the intention of returning it used or modified for refund. ACH fraud also occurs when account holders falsely dispute transactions they authorized. Chargeback or Return fraud occurs with paper and electronic checks.

ACH Transaction (or Entry)

A payment transaction to or from a Receiver (the customer) processed via the ACH Network. The participants in an ACH Transaction are:

1. The Originator (the merchant)
2. The Third-Party Processor
3. The Originating Depository Financial Institution (ODFI)
4. The ACH Network
5. The Receiving Depository Financial Institution (RDFI)
6. The Receiver

Also see Automated Clearing House (ACH) Network, Originator, Originating Depository Financial Institution, Receiver, and Receiving Depository Financial Institution, Third-Party Processor.

Acquirer

The financial institution that accepts/'acquires' credit card payments from card issuing banks on behalf of a merchant. A financial institution or Merchant Service Provider (MSP) that facilitates and manages credit card processing on behalf of a merchant customer.

Acquiring Bank

The bank or financial institution that holds the merchant's bank account that is used for collecting the proceeds for credit card processing.

Acquiring Processor

The credit card processing entity with which an Acquirer partners in order to provide merchants with transaction clearing, settlement, billing and reporting services. Also see Processor.

Advanced Fraud Detection Suite (AFDS)

The Advanced Fraud Detection Suite is a powerful, rules-based set of transaction filters and Internet Protocol (IP) address tools designed to help online merchants identify, manage and prevent costly fraudulent transactions. For more information about AFDS, see: https://www.authorize.net/resources/our-features/advanced-fraud-detection.html

Advanced Integration Method (AIM)

A deprecated method for connecting a merchant Web site to the Authorize.net Payment Gateway. AIM allows merchants to customize their own payment form (the Web page that collects the customer's payment information) and receipt page (the Web page that reports a summary of the transaction back to the customer), as well as submit transactions over an end-to-end Secure Sockets Layer (SSL) connection. Visit our Developer Center and Upgrade Guide for more information on our updated APIs.

American Bankers Association (ABA)

A national organization that represents American financial institutions, banks and other financial entities. Members are assigned an identification number, or ABA Transit Routing Number. Also see ABA Transit Routing Number.

Application Program Interface (API)

A computer communication protocol that facilitates the transfer of or access to information between two separate software or computer applications.

Authentication

A practice or procedure to verify the identity of an individual or organization. There are varying levels of authentication for accepting payments. Examples include checking a customer's driver's license when accepting payment at retail or validating a customer login and password at a merchant Web site. In respect to payment gateway account authorization, Authorize.net employs a number of electronic practices and procedures to verify that merchants accessing the payment gateway are authorized to do so.

Authorization

The response from a card issuing bank to a merchant's transaction authorization request indicating that payment information is valid, and funds are available on the customer's credit card. Also called an Approval. Also, for eCheck transactions, an Authorization is a paper or electronic document or record signed by the customer that authorizes a merchant to submit a charge transaction against their bank account.

Authorization Amount

The transaction amount that is submitted to the card issuing bank for funds approval. This amount is reserved against the available balance of a customer's credit card until the transaction is captured, a subsequent Void transaction is submitted, or the 30-day window for the authorization expires.

Authorization Capture

A credit card transaction request to authorize and capture, or settle, funds for a purchase. The payment gateway submits the request to the card issuing bank for authorization and upon approval, will automatically submit the transaction for settlement.

Authorization Code

A code assigned to a credit card transaction by the card issuing bank once the transaction has been approved.

Authorization Request

A transaction request submitted by a merchant to verify that funds are available on a customer's credit card for a purchase. Further action by the merchant depends on whether the transaction request type is an Authorization Capture or an Authorization Only, and whether the transaction request is authorized by the card issuing bank. Also see Authorization Capture and Authorization Only.

Authorize Only

A credit card transaction request to only authorize, or reserve, funds for a purchase. The payment gateway submits the request to the card issuing bank for authorization, but no further action is taken. Also called Auth-Only .

Authorize.net Acceptable Use Guidelines (AUG)

Policies that govern the appropriate uses of the Authorize.net Payment Gateway by merchants. The AUG also dictate the types of merchants and/or merchant operations that are not supported by the Authorize.net Payment Gateway. The AUG may be viewed here: https://www.authorize.net/about-us/terms.html

Automated Clearing House (ACH) Network

The group of financial institutions and similar entities within the banking industry that work together to facilitate the processing, clearing, delivery and settlement services for electronic check transactions. The ACH Network is governed by ACH Rules as defined by the National Automated Clearing House Association (NACHA).

Automated Recurring Billing (ARB)

An Authorize.net value-add solution that allows merchants to create a recurring billing schedule or subscription for the purchase of goods or services. The merchant enters transaction and customer billing information, specifies a billing amount and billing interval and ARB does the rest, automatically generating subsequent transactions for the duration of the subscription. For more information about our Automated Recurring Billing, see: https://www.authorize.net/resources/our-features/recurring-payments.html

Back Office Conversion (BOC)

The BOC transaction type in eCheck is a one-time charge transaction against a customer's checking account. It allows merchants to collect a check written at a point of sale (checkout counter, manned bill payment location, service call location) and convert it to an ACH debit during back-office processing. Payment authorization is obtained by posting required notices before accepting a customer's check.

Bank Account Number

This is the account number assigned by a bank to a checking or savings account holder. This information must be provided to a merchant by a customer to make an electronic check payment.

Bank Account Type

This indicates the type of bank account used for an electronic check transaction. For example: checking, business checking or savings.

Bank Card

A payment card issued to a consumer by a financial institution or bank, a credit or debit card.

Bank Card Association

A group of financial institutions or banks that have formed an association for issuing bank cards. Usually, a bank card association will work together along with other payments entities to provide certain bank card offers.

Bank Identification Number

An identification number assigned by Visa to each of its member financial institutions, banks, and processors.

Basis Point (BP)

Equivalent to .01 percent, or one hundredth of one percent, and is used as a measurement of fee rates. Rate changes are often expressed in basis points instead of hundredth percents, e.g., a fee rate increase of 1.95 percent to 2.0 percent is expressed as an increase of 5 basis points.

Batch

A group or batch of transactions occurring over a period that are submitted together, typically one file, to the appropriate processing networks for clearing and settlement. This action may sometimes be referred to as 'batching'. Batch may also be used in a more generic sense, to describe processing transactions in a group even when not for settlement, e.g., a 'batch upload' of authorization requests.

Batch Upload

A Merchant Interface tool for uploading multiple transactions at once from a spreadsheet or proprietary business application.

Brick and Mortar

A term used in the payments industry that refers to merchants that operate in storefront or physical locations. Also see Retail.

Capture Only

A credit card transaction request to capture funds that were previously authorized, but NOT via the payment gateway. For this type of transaction, the merchant will submit the authorization code that was previously received from the issuing bank through some other means than a payment gateway request, e.g., by telephone.

Card Associations

Credit card issuing entities such as Visa and MasterCard that govern and oversee the use of credit cards for payment transactions.

Card Code

A Card Code is a three- or four-digit number that appears on the back of a credit card (on the front for American Express). This code may be used to validate customer information on file with the credit card association.

Card Code Status

This value is returned to the merchant by the processor and indicates whether the billing information provided by a customer matches information on file at the credit card association for the cardholder associated with the credit card number and Card Code.

Card Not Present (CNP)

Literally means that a cardholder's credit card is not physically presented to a merchant at the time of the transaction. This term is used in the payments industry to distinguish e-commerce merchants, such as those that operate via Web sites or from mail order/telephone order locations, from brick and mortar or retail merchants.

Card Present (CP)

Literally means that a credit card is physically presented to a merchant by a cardholder at the time of the transaction. This term is used in the payments industry to distinguish brick and mortar, or retail merchants from those that operate from mail order/telephone order locations or via Web sites.

Card Reader

A hardware device that facilitates the reading and transmission of payment information stored in the magnetic stripe on a credit, debit, or stored-value card. Also known as a Magnetic Stripe Reader.

Cardholder

A consumer to which a credit or debit card is issued by the credit card associations or by the consumer's bank.

Cardholder Authentication Programs

The cardholder authentication programs Verified by Visa and MasterCard SecureCode are security programs created by the card associations to provide identity authentication for Visa and MasterCard cardholders, and transaction protection for merchants. By registering for these programs, merchants can minimize the risk of chargebacks and returns while providing optimal security for their Visa and MasterCard customers.

Cardholder Dispute

A claim made by a cardholder that an unauthorized purchase or transaction was performed on their credit card.

Cardholder Information Security Program (CISP)

The Cardholder Information Security Program (CISP) was a program established by Visa USA to ensure the security of cardholder information as it is being processed and stored by merchants and service providers. CISP has since been superseded by the PCI Data Security Standard (PCI DSS).

Cash Concentration or Disbursement (CCD)

This eCheck transaction type is a charge or refund against a business checking account. One-time or recurring CCD transactions are fund transfers to or from a corporate entity.

Chargeback

The reversal of a transfer of funds for a credit card sale that is initiated by the issuing bank because of a question over the validity of the charge/transaction from either the cardholder or bank. This may occur when a consumer claims they did not initiate a transaction or did not receive the paid for goods/services, or the bank determines the purchaser and cardholder are not the same, i.e., a fraudulent transaction.

Chargeback Reason Code

A code provided to the merchant by the card issuing bank that indicates the reason for the charge backed transaction.

Check 21

Refers to the Check Truncation Act of the 21st Century, a Federal Reserve Bank law that allows merchants to submit customers' check, or bank account, information for payment electronically instead of processing paper checks.

Check Verification

A risk management process that verifies the trustworthiness of an electronic check transaction against an extensive high risk or bad check database.

Credit Card Number

The account number assigned by a credit card association or card issuing bank to a cardholder. This information must be provided to a merchant by a customer to make a credit card payment.

Customer ID

A unique identification value assigned to a customer by a merchant, which may be associated with the invoicing or billing for a transaction.

Customer IP Address

Indicates the Internet Protocol (IP) address of a customer's Web browser, or the IP address from which a transaction is submitted to the payment gateway.

Customer Information Manager (CIM)

An Authorize.net value-add solution that allows merchants to securely store and charge customer information on demand through the Merchant Interface or API. For more information about our Customer Information Manager (CIM), see: https://www.authorize.net/resources/our-features/secure-customer-data.html

Cut-Off Time

The time of day that a merchant's payment transactions are batched and electronically picked up by the payment gateway for processing. The default payment gateway cut-off time is 4:00 PM PST. Merchants may configure their cut-off in the Merchant Interface.

Declined

Transactions not approved by the card-issuing bank are marked as declined. No further action can be taken for declined transactions.

Depository Financial Institution (DFI)

A Depository Financial Institution (DFI) is a bank participating in the ACH Network, either as an Originating Depository Financial Institution (ODFI) or a Receiving Depository Financial Institution (RDFI).

Digital Certificate

A Digital Certificate is an electronic file issued by a Certificate Authority, containing unique information to verify the authenticity and trustworthiness of an organization or individual. It is crucial for establishing secure communications via protocols like SSL and TLS.

Digital Fingerprint or Transaction Fingerprint

A Digital Fingerprint, also known as a hash, is a value generated by combining several input values and applying a complex mathematical function. These fingerprints are used to authenticate that electronic communications sent and received via the Internet were not intercepted or modified during transmission. If the recreated fingerprint matches the fingerprint submitted with the communication, its authenticity is verified. Digital fingerprints used to authenticate the legitimacy of transactions submitted to Authorize.net are unique to each transaction, so any alteration to transaction data during Internet transmission will result in failed authentication, and a failed transaction.

Digital Invoicing

An Authorize.net value-add solution that allows merchants create and send digital invoices that customers can then pay through a secure hosted payment form. For more information about our Invoicing service, see: https://www.authorize.net/resources/our-features/invoicing.html

Discount Fee

The Discount Fee is the percentage of each credit card or eCheck transaction and batch settlement processed that is billed to the merchant by the payment gateway. The transaction types for which the discount fee is charged include charges, refunds, voids, and declines.

eCheck

eCheck is Authorize.net's exclusive electronic check payment solution. It allows merchants to post charge and refund transactions directly to a customer's bank account.

Electronic Check

An Electronic Check describes a check or bank account payment that is submitted and/or processed electronically.

Electronic Funds Transfer Act

The Electronic Funds Transfer Act is a United States federal law that governs the use and administration of electronic funds transfer services.

Electronic Signatures in Global and National Commerce Act (E-SIGN)

The Electronic Signatures in Global and National Commerce Act (E-SIGN) is a United States federal law that defines and governs the use of digital signatures and records in electronic commerce.

Expiration Date

The Expiration Date is the date on which the validity of a credit card expires. Transactions will only be approved for credit cards that are not yet expired.

Federal Reserve Bank (FRB)

The Federal Reserve Bank (FRB) is the governing financial institution of the United States of America.

Fraud

Fraud is the malicious practice by untrustworthy and dishonest persons to use stolen personal information, credit card information, and/or compromised bank account information for personal gain. It is not limited to the purchase of merchandise, the submission of fraudulent transactions, or the abuse of a merchant's purchase policies or e-commerce Web site to check the validity of stolen payment information.

Funding

Funding occurs when monetary proceeds for a merchant's eCheck transactions are deposited to the merchant's bank account.

Hash

A Hash is the value generated by applying a complex mathematical function to several input values. Also see Digital Fingerprint.

Independent Sales Organization (ISO)

An Independent Sales Organization (ISO) is an organization that sells business products or services to merchants and/or acquires merchants on behalf of various types of merchant service providers.

Interchange

Interchange is the process by which all parties involved in a credit card transaction (i.e., processors, acquirers, issuers, etc.) manage the processing, clearing, and settlement of credit card transactions, including the assessment, collection and/or distribution of fees between parties. Also known as Credit Card Interchange.

Internet Protocol (IP)

Internet Protocol (IP) is a method of transmitting information and communications between computer systems and networks via the Internet.

Internet Service Provider (ISP)

An Internet Service Provider (ISP) is an organization or business that provides Internet services and resource management to businesses and consumers.

Internet-Initiated Entry (WEB)

An Internet-Initiated Entry (WEB) is an eCheck transaction type that is a charge against a customer checking or savings bank account. Payment authorization is obtained from the customer via the Internet.

Invoice Number

An Invoice Number is a unique identification value assigned to a transaction by a merchant, which may be associated with order fulfillment and billing for a transaction.

Issuing Bank

An Issuing Bank is a financial institution that issues credit cards to consumers on behalf of the card associations. Also known as Card Issuing Bank. Also known as an Issuer.

Level 2 Data

Level 2 Data includes additional information that may be submitted with the minimum required information for a payment transaction. Examples include shipping and tax information.

Level 3 Data

Level 3 Data includes extensive information that may be submitted with the minimum required information and Level 2 Data for a payment transaction. Examples include product codes and other merchant-specific order information.

Magnetic Stripe

A Magnetic Stripe is the black stripe on a credit, debit, or stored-value card that stores the cardholder's account or payment information.

Mail Order/Telephone Order (MOTO)

A Mail Order/Telephone Order (MOTO) is a business, or merchant, that sells merchandise or services to consumers via mail or telephone-initiated orders. MOTO merchants operate from call or fulfillment centers.

Manual Entry

A Manual Entry is the submission of payment information for a transaction by keying the customer's payment information into a hardware terminal or Virtual Terminal. For example, any transaction that is not submitted by allowing an organization or business to swipe, or read, payment information from a magnetic stripe on a credit, debit, or stored-value card; or transactions that take place by physically keying in payment information using a keypad. Additionally, for online merchants a manual transaction might be considered any transaction that is not entered at their e-commerce Web site by a customer.

Mastercard SecureCode

Mastercard SecureCode is a security program developed by Mastercard to enhance cardholder authentication and protect merchants from fraudulent transactions. By registering for Mastercard SecureCode, merchants can lower transaction risks and offer additional security to their customers.

Mastercard Site Data Protection (SDP) Program

The Mastercard Site Data Protection (SDP) Program is a program created by Mastercard stating its technology and sensitive data security requirements for merchants and merchant service providers. Compliance is required of its member institutions.

Merchant

A Merchant is the person or business entity that sells goods or services to a customer.

Merchant Account

A Merchant Account is a financial institution or bank account designated for merchants to collect proceeds from consumer payments, including bank account and credit card transactions. It includes both Card Present (CP) and Card Not Present (CNP) transactions.

Merchant Identification Number (MID)

A Merchant Identification Number (MID) is an identification number assigned to each member merchant of an acquiring organization, such as a financial institution, Independent Sales Organization (ISO), Merchant Service Provider (MSP) or processor.

Merchant Interface

The Merchant Interface is the password-protected Authorize.net Web site that allows merchants access to transaction information, management tools, and Authorize.net account settings.

Merchant Service Provider (MSP)

A Merchant Service Provider (MSP) or Merchant Account Provider is a company, sales organization financial institution, or bank, that provides a financial account to a merchant for the purpose of collecting proceeds from consumer bank account or credit card payment transactions.

Mobile Point of Sale (mPOS)

A Mobile Point of Sale (mPOS) is a smartphone, tablet, or dedicated wireless device that performs the functions of a cash register or electronic point of sale terminal (POS).

Multi-Factor Authentication

A security system that requires more than one method of authentication from independent categories of credentials to verify the user's identity for a login or other transaction.

National Automated Clearing House Association (NACHA)

The National Automated Clearing House Association (NACHA) develops electronic solutions to enhance the automated clearing house (ACH) payment system in the United States. Representing over 12,000 financial institutions through direct memberships and regional payments associations, NACHA sets the rules, standards, and procedures for exchanging ACH transactions between participating banks, known as Originating Depository Financial Institutions and Receiving Depository Financial Institutions.

Not Sufficient Funds (NSF)

Not Sufficient Funds (NSF) refers to a type of ACH return. It indicates that a customer's bank account lacks the necessary funds to cover a specific eCheck transaction.

Open-Looped System

An Open-Looped System is a credit card interchange system that allows multiple card-issuing financial institutions or banks to share a credit, debit, or payment card brand.

Originating Depository Financial Institution (ODFI)

The term Originating Depository Financial Institution (ODFI) is used when referring to the clearing of ACH or eCheck transactions. It describes the merchant's bank, which handles the submission of eCheck transactions received by the merchant to the ACH Network for clearing.

Originator

The term Originator is used when referring to the clearing of ACH or eCheck transactions. It describes the person or corporate entity that has received authorization from a customer to refund or charge their bank account. For an eCheck transaction, the merchant is the Originator.

One Time PIN (OTP)

A pass code used for user authentication that is valid for only one login session or transaction, on a computer system or other digital device.

Payment Gateway

A Payment Gateway is a system of technologies and processes that allow merchants to electronically submit payment transactions to the payment processing networks (i.e., the Credit Card Interchange and the ACH Network). Payment gateways also provide merchants with transaction management, reporting, and billing services. A payment gateway facilitates the secure transfer of transactions from a merchant to a third-party payment processor, associated with the merchant's acquiring bank. Gateways often offer additional services like reporting, and perform checks on transactional data such as: message formatting, automatic tax calculation, and fraud detection.

PCI DSS (Payment Card Industry Data Security Standard)

PCI DSS is a set of comprehensive requirements for enhancing data security. It was developed by an oversight board known as the PCI Security Standards Council whose founders include all of the major credit card associations.

Personal Identification Number (PIN)

A Personal Identification Number (PIN) is a unique number that is issued to an individual or organization by a financial organization or related service—or other type of service provider—for the purpose of authenticating user identity and granting secure access to accounts or information.

Per-Transaction Fee

The Per-Transaction Fee is the flat fee charged to a merchant by the payment gateway for each transaction and batch settlement processed. The transaction types for which the per-transaction fee is charged are: charges, refunds, voids and declines.

Point of Sale (POS)

The term Point of Sale (POS) is used in the payments industry to refer to the physical location where a payment transaction takes place. POS is also used to describe credit card payment acceptance systems that are designed for the place of sale, such as card swipe terminals.

Point of Sale (POS) Device

A Point of Sale (POS) Device is a piece of electronic equipment used by a merchant to submit credit card payment information to the processing network. Like terminals, these devices are connected to the credit card processing network via dial-up telephone connection or Broadband. POS devices also include Smartphones, and wireless electronic devices capable of transmitting credit card payment information via wireless Broadband connection.

Point of Sale (POS) Solutions Provider

A Point of Sale (POS) Solutions Provider is a POS device, system or software manufacturer or distributor that provides POS products or services to Card Present (retail and mobile) merchants.

Prearranged Payment and Deposit Entry (PPD)

A Prearranged Payment and Deposit Entry (PPD) is a type of eCheck transaction that is a charge or refund against a customer checking or savings account. PPD transactions may only be originated when payment and deposit terms between the merchant and the customer are prearranged, for example, with Automated Recurring Billing (ARB) transactions.

Prior Authorization Capture

A Prior Authorization Capture is a credit card transaction request to capture funds for a separate, previously authorized authorization-only transaction. With this type of transaction, the merchant will submit an authorization code that was received from the issuing bank at the time of the original authorization-only transaction.

Processor

A Processor is an entity in the credit card processing network that handles the posting of transactions for authorization, clearing and settlement to consumer credit card accounts at the card associations, and the settlement of funds to merchant bank accounts. Processors may also provide merchants with billing and reporting services.

Receiver

The term Receiver is used when referring to the clearing of ACH or eCheck transactions. It describes the person or corporate entity that has authorized a merchant to initiate a refund or charge transaction to their bank account. In an eCheck transaction, the customer is the Receiver.

Receiving Depository Financial Institution (RDFI)

The term Receiving Depository Financial Institution (RDFI) is used when referring to the clearing of ACH or eCheck transactions. It describes the customer's bank. The RDFI receives a request from the ACH Network to provide funds for the customer's eCheck transaction.

Reference Transaction ID

The Reference Transaction ID is the transaction ID that links, or associates, a subsequent transaction to a separate, original transaction. In the case of refund transactions, a reference transaction ID must be entered to identify the original charge transaction against which the refund is being submitted.

Refund

A Refund is a credit card transaction request to post funds from the merchant's bank account back to the customer's credit card account as a refund for a previous charge transaction. For this type of transaction, the merchant must submit the transaction ID of the original charge transaction against which the refund is being applied.

Regulation D

Regulation D is part of the Reserve Requirements of the Depository Institutions Act as established by the Federal Reserve Board. Regulation D defines the types of deposits handled by financial institutions, or banks.

Regulation E

Regulation E is part of the Electronic Funds Transfer Act as established by the Federal Reserve Board. Regulation E defines electronic funds transfers.

Reseller

A Reseller is a Merchant Service Provider (MSP) or Independent Sales Organization (ISO) that acquires merchant customers for payment processing services.

Response Code

A Response Code is a code provided to the merchant by the card issuing bank that indicates the results of a transaction request; and if declined, the reason why the transaction was rejected.

Retail

Retail refers to the business of selling merchandise or services to consumers. Authorize.Net uses this term to refer to merchants that operate in a storefront or physical location and accept Card Present payments—meaning that payment is physically presented to the merchant, and credit cards are swiped into a card reading device. Also called Brick and Mortar.

Return or Returned Item

A Return or Returned Item refers to an eCheck transaction that could not be completely processed for reasons such as NSF, invalid account number, account closed, or other rejection reason(s) provided by the customer's bank. A chargeback is a type of return. Also see Chargeback.

Reversal

A Reversal is a reversed chargeback or refund transaction. This occurs when the merchant produces sufficient proof that disputes a chargeback, or the customer rescinds the chargeback. Also see Chargeback.

Risk Reserve

A Risk Reserve is an account managed by Authorize.Net that holds a certain portion of a merchant's eCheck processing proceeds to cover potential costs incurred from high risk or chargeback transactions. A Risk Reserve may be required in order to use the eCheck service, depending on a merchant's risk profile. There are two types of Risk Reserves:

• Fixed - The reserve balance is established by either, (1) a receipt of a lump sum deposit from a merchant, or (2) withholding a portion of funds from each of the merchant's batch settlements.
• Rolling - The reserve balance is established by withholding a portion of funds from each batch settlement and is retained for a set period of time before being released to the merchant.

Server Integration Method (SIM)

An Authorize.net Payment Gateway Web site connection method that allows merchants to post transactions directly to the payment gateway's secure server and requires transaction-unique encryption for transaction authentication. SIM provides merchants with a hosted payment form (the Web page that collects the customer's payment information) and a hosted receipt page (the Web page that reports a summary of the transaction back to the customer).

Settlement

For credit card transactions, settlement occurs at the completion of transaction processing between the involved financial institutions and processing entities, and funds for the credit card transaction have been successfully deposited into the merchant's bank account. For an eCheck transaction, settlement occurs when the payment gateway submits a request to the ACH Network on behalf of the merchant for the collection of bank account funds for a purchase.

Settlement Amount

The transaction amount sent to the credit card processor or the ACH Network for settlement. This is the amount that will be posted as a charge or refund against the specified method of payment, and for credit card transactions, may be less than or equal to the amount originally authorized for the transaction.

Shopping Cart

An Internet or software company that provides e-commerce tools and payment form solutions for merchant Web sites.

Stored-Value Card

A payment card, similar to a debit card, attached to a limited monetary value, held either in an account by a card issuer, or in an electronic chip embedded within the card. Gift credit cards are a type of stored-value card.

Telephone-Initiated Entry (TEL)

This eCheck transaction type is a one-time charge against a customer checking or savings account. TEL transactions may only be originated when a business relationship between the merchant and the customer already exists; or if no relationship exists, only when the customer initiates the telephone call to the merchant.

Terminal

A piece of electronic hardware, or a device, that is used by a merchant to submit credit card payment information to the processing network. Terminals are connected to the credit card processing network via dial-up telephone connection or Broadband. Also see POS Device.

Terminal Identification Number/Terminal ID (TID)

An identification number assigned to each POS (Point of Sale) device by a merchant's processor. This number allows the processor to identify the source of a transaction.

Third-Party Provider

An organization or business not directly associated or involved with transaction processing, or necessary for the exchange of a transaction between two parties, but that provides merchants with business enhancing services.

Third-Party Solution

A hardware or software manufacturer or distributor that provides transaction-enhancing products or processing solutions to merchants.

Tokenization

A process of substituting sensitive data with unique identification symbols that retain all the essential information about the data without compromising its security.

Track Data

Refers to the payment information that is stored in the magnetic stripe of a credit, debit, or stored-value card. Also known as Magnetic Stripe Data.

Transaction

The exchange of information, goods or services in which all participating parties’ benefit. Specifically, the exchange of a consumer's payment or payment information for merchandise or services provided by an organization or business.

Transaction ID

A unique identification value assigned to each transaction processed through the payment gateway. This ID may be used to search for or sort transactions.

Transaction Key

A randomly-generated value issued to Authorize.net merchants for the purpose of authenticating transaction requests to the payment gateway.

Transaction Type

The type of credit card transaction taking place. For charge transactions, a consumer is allowing a merchant to collect payment for merchandise or services rendered. However, in the case of a refund transaction, a merchant is returning funds to the consumer for a previous charge transaction. For more information about credit card transaction types, see also Authorization Only, Authorization Capture, Capture Only, Prior Authorization Capture, Refund, and Void.

Transport Layer Security (TLS)

Transport Layer Security (TLS) is a cryptographic protocol designed to provide secure communication over a computer network. It encrypts data to prevent unauthorized access and ensures the integrity of data during transmission, replacing the older Secure Sockets Layer (SSL) protocol.

Underwriting

The process of evaluating a service applicant's financial history and credit trustworthiness to determine whether to grant a service account. In some cases, underwriting may also determine an applicant's financial obligations, such as services pricing.

Value-Added Reseller (VAR) Sheet

A value-added reseller (VAR) sheet is a file that contains important payment processing information, such as:

• Merchant identification number (MID)
• Merchant account information
• Business details
• Processor information
• Industry codes or MCC

A VAR sheet enables communication between the gateway and the merchant account and also referred to as:

• Tear sheet
• Parameter sheet

Value-Adding Product (VAS)

A product or service that enhances a merchant's business practices or transaction management.

Verified by Visa (VbyV)

A security program created by Visa to provide identity authentication for cardholders and transaction protection for merchants. By registering for Verified by Visa, merchants can minimize the risk of chargebacks and returns while providing additional security for their Visa customers.

Virtual Point-of-Sale (VPOS) Terminal

A secure, easy-to-use Authorize.net solution that allows retail, or brick and mortar merchants, to manually submit transactions using a computer with a card reader.

Virtual Terminal

A Merchant Interface tool for manually keying in and submitting transactions.

Void

Transactions of this type are used to cancel original charge transactions that have not yet been submitted for batch settlement. For this type of transaction, the merchant must submit the transaction ID of the original charge transaction against which the Void is being submitted. No further action may be taken for Void transactions. To cancel a transaction that has already settled, a refund must be submitted.

Web Host

An organization or business that provides the technology and infrastructure for hosting business or consumer Web sites and services.