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3D Secure

A form of e-Commerce authentication used by Visa and Mastercard when a card holder proves that they are the genuine cardholder by entering a pre-set password. This takes place after a cardholder enters their details in a separate webpage. Using 3D Secure reduces a business' risk of fraud or disputes from transactions processed through their website.

A

Acquirer

An acquirer is a bank which processes credit and debit card payments for a merchant also known as an acquiring bank or a merchant acquirer. The acquirer provides a single interface for card authorisations, pays all the scheme and issuer fees on behalf of the merchant and acts as an intermediary in the event of card claims, returns and refunds.

Authentication

Payment authentication is the process of identifying who is making a particular payment and ascertaining whether that person has the authority to make that payment. Forms of authentication include chip and PIN and online authentication processes, such as 3D Secure verified by Visa. Increasingly there are alternative authentication processes available, such as voice authentication, whereby customers pay use their unique 'voice signature' to authenticate and sign their payment transaction.

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C

Card issuer

A credit card issuer is a financial service provider which offers credit cards. The card issuer works with payment processing networks, like Visa and Mastercard. American Express is an example of a card issuer which is also a payment processing network.

Cardholder Not Present (CNP)

A transaction category where the customer making the purchase is not present at the point-of-sale (e.g. via the Internet or over the phone) and so does not use Chip and PIN.

Card Scheme

Visa and Mastercard are card schemes, into which a bank or any other eligible financial institution can become a member. Neither Visa nor Mastercard issue credit cards themselves, rather they negotiate the setting up of payment systems with different banks and building societies internationally.

Card Security Code (CSC)

The last three digits on the signature strip on the back of a credit or debit card, often required when a customer is purchasing goods online.

Cash flow

A business' cash flow refers to the availability of funds for bills and expenses. Cash flow is controlled by a balance between the timing and amount of outgoing costs with incoming payments.

Chargeback

Usually a disputed transaction, where a card issuer charges part or all of the value of a transaction back to the acquirer. The acquirer may subsequently chargeback the value of the transaction to the business.

The customer initiates this process by contacting their card issuer if they cannot resolve the issue with the business directly and the issuer must decide whether the dispute claim is valid.

Clearing

Clearing refers to the procedure through which the actions of a seller and a buyer are matched. A transaction is cleared once the price has been paid and the goods delivered. Many transactions involve a number of third parties, such as brokers, dealers, or specialists, so often a clearing firm will settle transactions in exchange for a fee.

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E

E-Commerce

Electronic commerce, or e-Commerce for short, is the name given to the process by which products or services are bought and sold with an electronic system such as the Internet.

Electronic Invoicing

E-invoicing is the exchange of an invoice in an electronic format. E-invoicing has several benefits - from the environmental benefits associated with avoiding paper bills, to the potential for e-invoicing to connect with financial business systems to provide real-time cash flow insight.

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I

Interchange fee

The interchange fee is the amount paid between banks for the acceptance of card transactions. In the case of a purchase made in a shop, the interchange fee will be between the retailer's bank (the acquiring bank) and the customer's bank which issued the card.

M

Mail Order/Telephone Order (MOTO)

A classification of transaction that enables a merchant to accept a credit card payment without a cardholder's signature. This type of transaction is common within call centres (where payments are taken over the phone) or with payments for catalogue items.

Mastercard Secure Code

Mastercard's version of 3D Secure.

M-Commerce

Sometimes called mobile commerce, the process of purchasing goods or services via a mobile device, either through a browser or an app.

Merchant

A business that accepts cards as settlement for goods and/or services provided to their customers.

Merchant account

A merchant account is a type of bank account that allows businesses to accept payments by card. A number of UK banks - known as acquiring banks - offer merchant accounts. An internet merchant account (IMA) is a type of account that enables a business to accept customers' credit and debit card payments directly online.

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P

Payment gateway

Responsible for sending card transaction information from a business website to the acquirer to request authorization and settlement of card transactions. In order to accept card transactions from your website, you require both a payment gateway and merchant account.

Payment Service Provider (PSP)

See Payment Gateway.

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R

Remittance

A transfer of funds from the acquirer to the business after an agreed time period stated in the contract between the two parties.

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S

Storebuilder/Shopping Cart

This software lets you create a virtual 'shop front' for your website, effectively a catalogue and ordering system. Storebuilders can let you do everything from designing the look and feel of your website, stock control and delivering goods and also integrate with your acquiring and payment gateway services.

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V

Verified by Visa (VbyV)

Visa's version of 3D Secure.

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