CPP Test Cards

U-Commerce

"Universal Commerce" enables secure commerce anywhere, anytime, and with any type of device.

If a merchant or someone connected with a merchant had a criminal record, what reason code would the merchant be listed under on MATCH?

07

The number of tracks of data that are typically utilized on a standard credit card

2

Shopping basket

A "virtual" shopping basket allows you to select multiple items for purchase from a merchant's website. In actuality, the shopping basket is simply a list of the items you have selected and the details for the purchase. A shopping basket allows you to review and modify your selected items as you shop.

Merchant service provider (MSP)

A bank or other institution that offers credit card processing services, and usually also provides merchant accounts to merchants and retailers.

Issuing Bank

A bank that issues credit cards to customers. The issuing bank funds the merchant's account when a charge is made to one of their customer's cards, and later bills the customer for that charge.

Acquiring bank

A bank that provides credit card merchant accounts and is responsible for submitting credit card purchase information to the credit card associations.

Sole Proprietorship

A business under the complete control of a single individual.

Address Verification Service (AVS)

A chargeback and fraud-reduction service, which verifies the billing address provided by the cardholder with the credit card company before approving a transaction.

Cancellation Code

A code provided by lodging or car rental merchants to confirm that the cardholder has cancelled a reservation.

Line of Credit

A commitment from a financial institution, such as a bank or other creditor, to lend a specified amount of money, during a certain period of time, to another company or business.

Merchant Account Provider

A company that can help a business establish a merchant account relationship with a bank, suitable to their credit history and processing needs. Also called Independent Sales Organizations, these companies make money through either an upfront fee, application fee, or a per transaction fee. The bank will handle the charging and depositing of funds, and unless the Merchant Account Provider manages its own Gateway, they probably resell another company's system and will play little or no part in the actual processing of the credit card transactions.

Charge Back

A credit card charge that has been challenged or refused by the credit card holder. The credit card issuer manages the charge back process, and will require evidence from the business that charged the card that the transaction was authorized and that the product or service was delivered as agreed. If a business cannot provide sufficient evidence, the money will be taken from your account, often with a sizeable fee. Charge backs can be especially difficult to refute when doing card-not-present transactions (see Card-not-present above), where businesses do not have a customer signature to support the charge and may not be able prove that products or services were received. An excessive number of charge backs may result in higher merchant account fees, and in extreme cases, the cancellation of merchant accounts.

Smart card

A credit card equipped with a small microprocessor which stores information about the card owner.

Cardholder Information Security Program (CISP)

A defined standard of procedure and enforcement intended to protect cardholder information.

Digital wallet

A digital wallet holds digital money, purchased and used similar to travelers' checks. A digital wallet may also contain your credit card information and a digital certificate identifying you as the cardholder. Also called an e-wallet.

Transaction Fee

A fee charged by a credit card processor or merchant provider for each transaction processed, usually ranging from $.20-.50. This fee is different from the credit card fee or discount rate, and covers the costs of the computers and network required to process the transaction.

Statement Fee

A fee, usually between $10-15/month, charged by Merchant Providers to generate and mail a monthly statement outlining a businesses transactions.

Automatic Check Handling (ACH)

A form of electronic payment, designed to be a sort of e-check or electronic check payment. ACH is usually used to process higher volumes or small-dollar payments for settlement issues within 1 to 2 business days. These transactions are handled much the same way that written checks are handled. The clearinghouse divides all ACH files received from member banks for the day and divides them according to originating bank and paying bank, totals the accounts, and credits or debits all accounts accordingly. ACH can also mean Automatic Clearinghouse.

Small Business Administration (SBA)

A government agency created to aid, counsel, assist and protect the interests of small businesses, offering a variety of programs and services to help those businesses succeed.

Employer Identification Number (EID)

A government-issued ID used on all business tax forms and other significant documents. Also called a Tax ID or Tax Number.

MATCH

A mandatory system for assessing a merchant's potential risk.

Holdback

A merchant account provider may retain a portion of a merchant's revenue to cover any unplanned future expenses such as charge backs, late charges and other expenses. Not all merchant providers require a holdback.

mobile payment

A money payment made for a product or service through a portable electronic device such as a tablet or cell phone. This technology can also be used to send money to friends or family members, such as with the applications PayPal and Venmo.

Electronic Funds Transfer (EFT)

A money transfer initiated through an ATM, electronic terminal, computer, telephone, or magnetic tape. EFTs include credit card and automated bill payments.

T-Commerce

A new concept being tested in Europe which allows shoppers to order certain products or services directly from their televisions.

Better Business Bureau

A non-profit, member-funded organization of thousands of US businesses dedicated to building fair and honest relationships between businesses and consumers. The BBB uses news alerts, databases, and other methods to maintain an ethical business environment. This can be a great source of information when "checking up" on a company you're considering doing business with. You'll also want to maintain a positive standing with the BBB in your own business.

Card Verification Code (CVC2)

A numeric security code printed on the back of MasterCard credit cards. By requiring this number on online order checkouts, in addition to using AVS protection, merchants can reduce credit card fraud and chargeback instances significantly.

Discount rate

A percentage of the dollar amount of each transaction charged by the processing company to the merchant. Put simply, this is the processor's fee for handling the transaction for you.

Credit Card Fee (Discount Rate)

A percentage-based transaction fee charged to merchants by the credit card company. Fees can range from about 1.99% to 2.54%, with an average around 2.40%. American Express has an independent rate, usually around 3%. Fees for card-not-present transactions are typically higher than those for traditional businesses, especially online transactions which are considered high-risk by most banks. The discount rate fee is always taken off the top along with any transaction fees before any money is deposited into your account.

Contactless Reader

A peripheral device that reads pocket-sized cards with embedded integrated circuits that can process and store data, and communicate with a terminal via radio waves.

Imprint

A physical impression of a customer's card which proves that the card was present when the sale was made. Imprints may be created electronically using a magnetic-stripe-reading terminal including a correct point-of-sale (POS) entry code.

Bank card

A plastic card encoded with customer account information that is accepted by merchants and used to credit accounts for processing sales transactions. Credit cards are the most common type of bank card.

Regulation E

A regulation put forth by the Federal Reserve Board that outlines rules and procedures for electronic funds transfers (EFTs) and provides guidelines for issuers of electronic debit cards.

Encryption

A security measure which scrambles electronic information so that only the sender and receiver can read the message.

Certificate Authority (CA)

A service provided by banks which digitally signs public keys sent by a web browser or by a merchant's server software. The bank issues and validates digital certificates associated with SET transactions.

Batch

A single day's series of credit card transactions. Some terminals and real-time processors collect all of the transactions and then do a batch at the end of day. Others processors batch them throughout the day. Some processors will batch your transactions automatically for you, others may not offer this service.

Floor Limit

A specific dollar limit which designates that certain transactions must be authorized. For instance, if your floor limit is $1,500, authorization is required for any transaction over that amount.

Credit Rating

A system used by creditors to help determine your creditworthiness, or how likely it is that you will repay a loan. This system utilizes information collected from your credit application and your credit report.

Card Verification Value (CVV2)

A three-digit security number printed on the back of most Visa credit cards. By requesting this number on online order checkouts, in addition to using AVS protection, a merchant can reduce credit card fraud and chargeback instances significantly.

Credit card

A type of bank card widely used as a form of payment. The credit card holder makes a purchase on credit, then reimburses the credit card company for the amount of the purchase plus any interest that may apply.

Bust-out fraud

A type of credit card fraud where an individual applies for a credit card, establishes a normal usage pattern and solid repayment history, then racks up numerous charges and maxes out the card with no intention of paying the bill.

Collusion

A typical example of this kind of fraud occurs when bad actors create fake user accounts and then use them to make purchases with stolen credit card credentials. These so-called "purchases" are transacted with fake seller accounts that have been set up expressly to enable fake transactions. No goods ever actually change hands—in fact, they don't exist in the first place—but once the "seller" receives the funds from the stolen credit card, those funds are then cashed out. At surface level, there is nothing suspicious about these transactions—the collusion can only be detected through holistic analysis that can expose the coordination and connections between all the moving parts of the fraud.

Code 10 Authorization

A voice authorization code which can be used when a transaction is suspected to be fraudulent, such as a suspected stolen card, or suspicious customer.

Match reason code 01:

Account data compromise- merchant unknowingly allowed disclosure or use of account information.

MO/TO

An abbreviation for mail order (MO) or telephone order (TO) transactions.

Merchant Account

An account set up by a bank which allows a business to accept credit cards and deposits collected funds into the business checking account. Merchant providers assume a risk by allowing other businesses to accept credit cards under their name, and rely on those businesses to deliver the products or services to the customer as agreed.

Expense Account

An account used for business-related travel and entertainment costs.

Non-Qualified Transactions

An acquirer can label a transaction as NON QUALIFIED if: * Your customer uses a certain card type that has greater risk * The transaction has missing or incomplete information* You or your employees fail to settle a daily batch of transactions within the allotted time frame (typically 48 hours) * Your customer is using a federal or state government issued card, a corporate issued card, or a cart issued outside of the United States.

Sarbanes-Oxley Act

An act passed into law by Congress in 2002 to establish strict accounting and reporting rules in order to make senior managers more accountable and to improve and maintain investor confidence. Applies to SEC publicly traded companies.

Personal Identification Number (PIN)

An alphanumeric or numeric code used to identify a person using a credit or other payment card.

Wire transfer

An electronic payment system designed to handle high-dollar, time-crucial payments, typically between large banks.

Digital signatures

An electronic signature that cannot be forged. A digital signature is generated from a computed digest of the text encrypted and sent with the text message. When the recipient receives the text, the signature is decrypted and the digest is retrieved. If the digests match, the message is proven to be from the sender.

Digital cash

An encrypted form of cash which can be sent to merchants as payment in online transacitons. Digital cash can be either "digital coinage" downloaded to a user's PC from a participating bank or a digital money account with a bank.

Audit

An inspection of financial accounts, records, and accounting procedures, which can be performed either internally, or by an independent auditing organization.

Independent Sales Organization (ISO)

An organization that processes merchants' online credit card transactions in exchange for a percentage of the sales or for transaction fees.

Transaction

Any action between a credit cardholder and a merchant which results in activity on the account, like authorization and settlement. Captures and credits are types of transactions conducted by merchants and financial institutions.

Internet commerce

Any commercial transaction performed via the Internet.

Card-Not-Present (CNP) Transactions

Any credit or debit card transaction processed without the card in hand, such as mail, phone or online purchases.

Electronic Data Interchange (EDI)

Any electronic communication of business transactions. For instance, orders, confirmations and invoices.

Merchant Bank

Any financial institution that works with businesses to enable them to process and accept credit card payments. This service is provided in exchange for processing fees. Ideally, you want to apply for a merchant account with the bank that handles your business checking account, but this is not mandatory. If you have reasonably good credit, you shouldn't have much trouble finding a bank to carry your merchant account, but many new or at-home companies may have trouble getting approved. Some merchant banks allow other businesses (Merchant Providers) to resell their merchant accounts, and then handle the transaction processes for those businesses.

Cardholder

Any individual or business with an established credit or debit card account. Cardholders are eligible to make payment card transactions.

What merchant types are considered restricted?

Any merchant engaged in Illegal activity. Adult oriented products or services (all media types: internet, telephone, printed material etc.). Internet / MO/TO pharmacies (where fulfillment of medication is performed with an Internet or telephone consultation, absent a physical visit with a physician).

Merchant

Any person or persons selling goods or services online.

Authorization

Approval from the credit card issuer which allows you to process a transaction for the specified amount.

Mid-Qualified Transactions

As you can probably guess, MID-QUALIFIED, or partially-qualified, discount rates apply to cards and transactions that don't meet the standards for a fully qualified transaction. Acquirers can label a transaction "mid qualified" when: * Your customer's card is a rewards card* You or one of your employees key a card number into the credit card terminal instead of swiping it* Transactions are not batched out within 24 hours of the transaction Since MID-QUALIFIED transactions have a higher processing rate, consider what types of cards your customers typically use when you're evaluating different processors.

MATCH reason 09:

Bankruptcy/Liqidation/Insolvency- The merchant was unable, or is likely to become unable to discharge its financial obligations .

Batching out

Batching out is an industry term for the exchange of transaction data between the merchant and cardholder's banks, which results in the deposit of funds into the merchant's account. This usually takes place at the end of each business day.

End-to-end encryption

Card data encrypted within the magnetic stripe reader environment and remaining encrypted all the way to the processors host or card brand.

Recurring fees

Charges billed on a regular schedule, usually monthly.

Match reason code 02:

Common Point of Purchase- Account data is stolen from the card-present merchant and used with other merchants.

Credit Bureau

Companies that gather information about consumer credit histories, including personal information such as identity, payment habits, and public records. These credit reports are then sold to creditors (banks, finance companies, retailers, etc.) who use the credit reports to determine the creditworthiness of a potential customer. Experian, Equifax, and TransUnion are the three major US credit bureaus.

Credit Card data "At rest"

Credit card track data stored on a hard disc drive.

What data elements are required for a merchant's commercial card transactions to be considered for Level 1, Level 2 and Level 3 interchange programs?

Customer #, sales tax and invoice #

Accounts Receivable

Debts other individuals or businesses owe to your business.

Accounts Payable

Debts owed to your business's creditors.

How would a $79 annual fee get converted into basis points (bps) for a merchant that processes $10,000 a month in sales volume?

Divide 79 by 12 and divide by monthly sales.

Draft/Sales Draft

Documentation verifying that a product or service was purchased.

Where can specific UDAAP regulations be found?

Dodd Frank Act

M - Commerce

E-commerce transactions performed over wireless devices, such as cell phones, pocket PCs, PDAs, etc.

Gateway Processor

Essential to online credit card transactions, a Gateway Processor acts as the interface between the merchant and the Credit Card Processing Clearinghouse (see above). The Gateway is used to submit payment information to the Clearinghouse and securely sends and receives payment transaction messages. Some merchant providers provider their own Gateway service, but most small merchant providers are resellers for larger Processors.

EMV

Europay, Mastercard and Visa — is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions. In the wake of numerous large-scale data breaches and increasing rates of counterfeit card fraud, U.S. card issuers have migrated to this new technology to protect consumers and reduce the costs of fraud.

Match reason 04:

Excessive Chargebacks- Defined by the individual card brands.

MATCH reason 05:

Excessive fraud- Merchant's fraud to sales dollar volume was 8% or more in a calendar month, and the merchant affected 10 or more fraudulent transactions totaling $5,000 or more in a calendar month.

MATCH reason code 07:

Fraud conviction- There was a criminal fraud conviction of a principal owner or partner of the merchant.

What is a benefit for pricing a merchant on an Interchange Plus program versus a tiered rate program?

Full cost disclosure

MATCH reason 14:

Identity Theft- The acquirer has determined that the identity of the listed merchant or its principal owner(s) was unlawfully assumed for the purpose of unlawfully entering into a merchant agreement.

Terminated Merchant File (TMF)

If a merchant receives excessive chargebacks, they may be stripped of their merchant account and placed in the Terminated Merchant File. All Merchant Service Providers have access to this list and may decline merchant account services to any merchant on the list for several years.

Qualified Transactions

If you own a brick and mortar store, most of your credit card transactions will be swiped or read by a terminal (CP, or card-present). Online merchants primarily rely on internet-based transactions and a payment gateway (CNP, or card-not-present). When you sign up for a merchant account with a credit card processor, the types of transactions your business processes, determines your QUALIFIED rate. Most major consumer credit and debit transactions, and therefore, most of your transactions as a business, fall into the QUALIFIED category. For this reason, most processors quote this discount rate when you ask about account pricing.

MATCH reason 13:

Illegal Transactions- Merchant was involved in illegal transactions.

Visa Payment Authentication Service (PAS)

In an attempt to secure merchant databases from hackers and to protect credit card numbers stored in merchant databases, Visa has developed a Payment Authentication Service which requires cardholders to verify their identity using a password whenever they make a purchase online.

Turn-key

In terms of e-commerce a turn-key solution refers to a fully e-commerce enabled web site which is offered to potential merchants as a complete online business solution, complete with shopping cart, web design, hosting, and a merchant account.

Factoring

In terms of e-commerce, factoring is the practice of allowing other companies to process credit card transactions through one company's merchant account rather than requiring them to purchase a merchant account of their own, in exchange for a percentage of the transaction. This is also known as credit card laundering, and is illegal practice that can result in heavy fines.

Cash Flow

Incoming cash vs. outgoing cash.

What is tiered pricing?

Interchange rates grouped into major categories for simpler pricing

Match reason code 03:

Laundering- The merchant was engaged in laundering activity.

Setup fees

Many merchant services providers charge set up fees for the initial opening and establishment of a merchant account.

Secure Electronic Transactions (SET)

MasterCard and Visa developed this secure payment protocol to offer greater security for online bank card transactions. Using this protocol, credit card details are secured between the shopper and the bank; the merchant does not have access to the credit card information.

MATCH reason 11:

Merchant Collusion- merchant was involved in fraudulent collusive activities

Costs

Merchant account costs will vary depending on the bank or merchant account provider you choose, the number of middlemen involved, the type of business you run, as well as the services you require. Setup costs, transaction fees, equipment costs, and other expenses can vary greatly. Look at several options before you apply. And depending on your needs, remember that the least expensive option may not be the best.

Micropayment

Merchants who sell products, services, or information for very small amounts, from a few cents to a few dollars, use a payment acceptance method called micropayments, because it is generally not profitable to use a traditional merchant account for processing such small payments.

What does surcharge/billback mean on a merchant's statement?

Mid and non-qualified fees

Venture Capital

Money available for investment in new enterprises, in which the risk of loss and the potential for profit may be considerable. Also called risk capital.

Three tiered pricing structure

Most credit card processors operate within a three tiered pricing structure. Each of your credit card transactions (or more accurately, each of your customer's credit cards) falls into one of three tiers. Processors assign different rates to the different tiers based on certain risk factors.

What two AVS codes apply to all four card brands, which could pose unacceptable risk to a merchant because either a "No Match" or "System Unavailable" message has been returned?

N and U

NFC

Near Field Communication (NFC) is a standards-based short-range wireless connectivity technology that makes life easier and more convenient for consumers around the world by making it simpler to make transactions, exchange digital content, and connect electronic devices with a touch. NFC is compatible with hundreds of millions of contactless cards and readers already deployed worldwide.

Processing bank

Once a credit card number is entered, the processing bank is the bank that processes the actual transaction.

Digital certificate

Online identification used to authenticate a customer, merchant and a financial institution. Digital certificates are used to encrypt the information exchanged in SET transactions. Certificates are public keys digitally signed by some trusted authority, such as a financial institution, to identify the user of the public key.

Incubators

Organizations offering a variety of resources, including mentoring, financing advice, technological training, business space, and research facilities to entrepreneurs that otherwise lack these resources.

MATCH reason 12:

PCI Data Security Standard noncompliance- the merchant failed to comply with Payment Card Industry (PCI) Data Security requirements.

Collateral

Property provided to secure credit or a loan, which may be subject to seizure if the loan goes into default.

Regulation Z

Protects consumers from misleading practices by the credit industry and provides them with reliable information about the costs of credit. It applies to home mortgages, home equity lines of credit, reverse mortgages, credit cards, installment loans, and certain kinds of student loans.

What are the three tiers credit card transactions are sorted into?

Qualified; Mid-Qualified and Non-Qualified

Real-time processing

Real-time processing allows merchants to process their credit card transactions as soon as a purchase is made, allowing them to capture funds and get the purchase approved immediately.

Automatic Bill Payment

Recurring, automatic charges to a credit or debit account for a specified service. Automatic payments must be arranged and authorized by the customer.

Secure Socket Layer (SSL)

SSL is a security standard web protocol used by many merchants to protect customer payment data as it travels over the Internet. SSL uses 128 bit encryption or higher, creating an encrypted channel between the browser and Web server, to secure personal information so that only the intended parties can read certain information.

Ecommerce

Sales, transactions, refunds, or any other business performed online.

Settlement

Settlement is the point at which the acquiring bank credits the merchant account for the amount of a credit card purchase, and the bankcard association credits the acquiring bank and debits the shoppers card issuer for the transaction.

Commercial Credit

Short-term credit arrangement provided by a business enabling a customer to pay for a service or product.

Digital money

Similar to digital cash, but also includes the use of software-based secure credit card transactions.

Shopping cart

Software used to help simplify the shopping process for an online customer when purchasing multiple products or services from a merchant's website.

Electronic Wallet (E-Wallet)

Software, which like a real wallet, stores credit card information and shipping details. The e-wallet resides as a plug-in in the Web browser and makes it possible for a credit card holder to conduct online transactions, manage payment receipts, and store digital certificates. The e-wallet initiates the data encryption in a SET transaction.

What is another name for MATCH?

Terminated merchant file

Merchant Identification Number

The ID number assigned to your business by your financial institution.

Credit Card Processing Clearinghouse

The actual "processing" of the credit card transaction is usually handled by a Clearinghouse, not by your merchant bank. The Clearinghouse authorizes and validates the card, and ensures that sufficient funds are available.

Payment gateway

The code that transmits customer orders to and from a merchant bank's transaction authorizing agent.

Overhead

The costs of operating a business, such as rent, utilities, taxes, etc., which are not directly connected to the services or products the businesses provides.

Point of Sale Terminal (POS)

The credit card processing device which reads the magnetic strip on the back of the card. After sliding or "swiping" the card, the terminal contacts the credit card clearinghouse to authorize the charge, displays an authorization code, and usually prints a card transaction slip which is then signed by the customer. Most retail stores use this method of card processing because it is simple to use, fast, and accurate. Also called a Credit Card Terminal, or Card Swipe Machine.

Equity

The current market value of your business, less your business debts.

Mail/Telephone/Internet Discount Rate

The discount rate (or Credit Card Fee) for internet/mail/telephone transactions is typically higher than the rate for traditional types of businesses. This is due to the increased risk of fraud in card-not-present transactions.

Swipe Discount Rate

The discount rate for retail stores using a POS terminal is usually around 1.65% - much lower than mail, telephone, or internet rates. A card-present transaction is considered much less risky and more secure than a card-not-present transaction.

Laundering

The illegal process of using another company's merchant account to process your own company's credit card transactions. Laundering may lead to heavy fines or other penalties.

Lien

The legal right of a creditor to hold or sell the property of a debtor to secure or pay off a defaulted debt or duty.

MATCH reason code 08:

The merchant is labeled a "Questionable Merchant," as determined by MasterCard guidelines

Monthly Minimum

The minimum monthly fee charged by most merchant providers, usually around $30. This fee is only imposed when your Discount Rate charges do not meet the monthly minimum amount.

Batch close

The process of submitting a batch of credit card transaction information to a financial institution for settlement. Sometimes also called "batching out".

Electronic Data Capture (EDC)

The use of a Point of Sale (POS) terminal to submit credit card transaction information to a merchant account provider.

Biometrics

The use of measurable living traits (such as fingerprints) as a way to control access to secured information, locations, etc. Generally used in place of, or in addition to passwords or other ID verification systems.

Authorization Code

This code verifies that you have received authorization from the credit card issuer to process a specific transaction. This number should be recorded and saved for future reference.

Offline Processing

This method of credit card processing allows a business to collect a customer's credit card information, and then process the charge at a later time.

Real-Time Processing

This method of credit card processing authorizes and validates a customer's charge at the time of purchase. This is made possible using a Real-time processing gateway which connects your website to a Clearinghouse through a separate modem channel, allowing you to check credit card status in real-time. This is the most common and capable method of processing for online companies.

What purpose does a gateway serve for a merchant?

To process transactions originating from a website or shopping cart.

How is a merchant's effective rate calculated?

Total fees divided by total sales

UDAAP

Unfair, deceptive, or abusive acts and practices can cause significant financial injury to consumers, erode consumer confidence, and undermine the financial marketplace. ... The rules specifically prohibited certain unfair credit practices and unfair or deceptive cosigner practices.

Leverage

Using credit or borrowed funds to expand the potential gains of a company, while assuming a risk of greater losses.

What functions does a chip card perform?

Utilizes an algorithm to send to the issuer instead of track data.

MATCH reason 10:

Violation of Card Brand standards- The merchant was in violation of one or more of the card network's regulations

Capture

When a card transaction is submitted to the merchant account holder for processing and to verify the availability of funds on a credit card. A capture is merely a verification of funds, and does not actually withdraw funds from the cardholder's account. This will not occur until the transaction is batched (see Batch).

Laundering

When a merchant presented (to its acquirer) transaction records that were not valid transactions for sales of goods or services between that merchant and a bona fide card holder.