Payments Industry Terms and Definitions
Below are some common terms you’ll run across as a merchant dealing with payments processing.
Acronym for “Three Domains Secure”. 3DS is an authentication process where three “domains” (hence 3D) are involved in authorizing a transaction. Those domains are the issuing bank, the acquiring bank, and an “interpolarity” domain, that handles communications between merchant, issuer and acquirer.
(AKA “acquiring bank”) The merchant’s bank that receives the money from a transaction.
The percentage of transactions that become chargebacks within a specified period of time, used by Visa, MasterCard and other card associations and banks to determine if a merchant is processing too much fraud. As a general rule, this threshold is at or below 1%.
The evidence required in representment cases submitted by a merchant that is sufficient enough to reverse a chargeback. This includes transaction data, delivery confirmations, and cardholder interactions with the merchant. Any evidence that ties a cardholder to a transaction.
When a transaction is invalidated because the information provided can not be authenticated or it triggers processing security measures.
Acronym for “EuroPay, MasterCard and Visa” which together created the standard for “smart card” technology.
When a cardholder tries to get money back from a purchase that they made, claiming the transaction was fraudulent.
The point of sale where a cardholder enters their credit card and other personal information required to process a transaction.
Acronym for “Independent Sales Organizations”. ISOs are contracted by VISA to connect merchants with their services.
(AKA “issuing bank”) The bank that has issued the card that a cardholder uses to purchase goods/services from a merchant.
Acronym for “Merchant Discount Rate”. The rate that a merchant is charged per transaction.
Acronym for “Member Service Providers”. MSPs are contracted by MasterCard to connect merchants with their services.
Acronym for “Payment Card Industry Association”. The PCI is the trade group of major card companies American Express, Discover, JCB, MasterCard and Visa.
The average dollar amount of a merchant’s transactions.
Acronym for “Terminal Identification Number”. The number that identifies a specific terminal that has processed a transaction.
Acronym for “the VISA Claims Resolution Initiative”. The initiative was implemented April 15, 2018 as an attempt to update and improve cardholder disputes.
Acronym for “VISA Merchant Purchase Inquiry”. A component of the VCR, the VMPI is an automated platform VISA provides issuing banks with to send transaction data to merchants in cardholder disputes. It is intended as a preemptive means to resolve disputes before they become chargebacks.
Acronym for “VISA Resolve Online”. This is VISA’s proprietary online infrastructure for resolving cardholder disputes. VROL enables merchants and issuers to exchange transaction data to facilitate dispute resolution.
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