ETA Glossary Terms

Alert

1. Weekly notification to an acquirer when the acquirer's suspect transaction or fraud activity level exceeds a specified risk identification service parameter. 2. A notification to an acquirer when the acquirer's fraud activity‐to-sales ratio exceeds a specified Acquirer Monitoring Program alert threshold.

Acquirer's Reference Number (ARN)

A 23‐digit or 24‐digit identification number specified by the Visa and MasterCard rules and submitted with the clearing records by the backend processor. It includes the bank identification number (BIN) and the acquirer's processing date.

Affinity Card

A Visa, MasterCard, Discover or American Express card bearing the trade name or mark of an affinity partner. These cards are issued through marketing alliances, an organization, or a collective group (such as a professional association or special interest group). The affinity partner's name and logo are shown on the card, and the partner then solicits its membership or group for special rewards and promotions. Popular with sporting teams and university alumni groups, affinity cards work like regular credit/debit/prepaid cards and can be used anywhere that the brand is accepted. The card issuer often pays the affinity organization a royalty on charge transactions.

Activation

A card fraud prevention mechanism used by issuers. To activate a bank card received by mail, the cardholder must call a toll‐free telephone number. Operators or automatic prompts verify certain cardholder information, after which the card is activated and may be used by the cardholder.

Altered Card

A card on which the original embossed or encoded information has been altered for fraudulent purposes.

Access Device

A card, code, or other means of access to a consumer's account that may be used to initiate an electronic funds transfer. This term does not include the terminal, telephone, or personal computer.

Access Provider

A company that provides its customers access to the Internet. The user normally connects to the access providerʹs server by a modem using a dial‐up connection or a broadband connection.

Account-Based Stored Value Card

A consumer prepaid payment card, with monetary value stored in an account that is accessed and its value updated when the consumer uses the payment card. (Source: Smart Card Alliance)

Agent Agreement

A contract with an agent under which the agent and the principal can be obligated. See Agent.

Advice

A daily, weekly, or monthly report that alerts an acquirer that a merchant has experienced above‐average levels of suspect or fraud activity.

American Express (AMEX)

A diversified worldwide travel, financial, and network services company, founded in 1850. American Express issues credit, prepaid and charge Cards that support a broad base of clients and needs for both consumers and businesses. Along with its Card business, the company also provides business credit lines and merchant establishment services. In 1958, it introduced the American Express Card, a "charge card" with the entire bill paid in full each month. Because American Express was both the only issuer and the direct acquirer, it could gather more information on each transaction and was the first company to offer a detailed statement. Still viewed as a prestige business travel and entertainment supplier, American Express now offers an array of charge, prepaid and credit cards. It also has a reseller program, the External Sales Agent (ESA) Program, that provides incentives to ISOs and acquirers to market American Express cards to merchants. All American Express cards begin with "3."

Advanced Encryption Standard (AES)

A federal information processing standard (FIPS) outlined in FISPA Publication 197 that specifies a cryptographic algorithm for use by U.S. government agencies to protect sensitive, unclassified information. AES uses keys that are 128, 196, and 256 bits to encrypt and decrypt information in blocks of 128 bits. It can encrypt data much faster than 3DES (Triple DES), which it replaces.

Aid for Dependent Children (AFDC)

A federally funded and usually state- or county-administered public assistance program that provides supplemental financial aid to qualifying households that include one or more minor children. An AFDC family may receive benefits and services from other assistance programs, including food stamps, Medicaid, and subsidized child care. Families receive food stamps via an EBT (electronic benefits transfer) card, which works like a debit card. The EBT system reduces fraud, theft, and abuse.

Annual Fee

A fee paid by a cardholder to the issuer for the privilege of holding a financial transaction card and using it to buy goods and services. Not all cards have annual fees.

Agent Reference File

A file maintained by Visa U.S.A. containing information about independent sales organizations, third‐party processors, third-party servicers, and independent contractors.

Anonymous Proxy Detection

A fraud prevention and risk management tool used in conjunction with Internet processing that rejects a transaction from known anonymous proxies. Anonymous proxies are frequently used by hackers.

Advance-Fee Loan

A loan or line of credit calculated so that all of the fees and finance charges are deducted before the consumer receives the principal.

Agent member

A member of Visa or MasterCard that by agreement, participates in another member's card program, usually by turning over its cardholder and merchant applications to the member administering the card program and by acting as a depository for merchants.

Affiliate

A member or licensee of Visa International or Visa U.S.A. or an organization affiliated with a MasterCard member that participates under the member's rule or card plan on either the cardholder or merchant side.

American Public Transportation Association (APTA)

A nonprofit international association of more than 1,400 public and private member organizations, including transit systems and commuter rail operators; planning, design, construction, and finance firms; product and service providers; academic institutions; transit associations; and state departments of transportation. APTA governs and oversees the public transportation industry, which is involved in setting standards for micropayments and smart card technology.

American Bankers Association (ABA)

A nonprofit organization, founded in 1875, that serves the banking industry. Its members include community, regional, and money center banks and holding companies, as well as savings associations, trust companies, and savings banks.

Alternate Payments

A non‐traditional payment method such as instant transactional credit and ACH debit systems such as PayPal or Amazon Payments.

Access Card

A plastic card used in an automated teller machine (ATM) to complete deposits, cash withdrawals, account transfers, and other related account functions.

Account-Number-Verifying Terminal

A point‐of‐transaction terminal that may be required by Visa at specified high‐risk locations. This terminal reads the account number encoded on the magnetic stripe or embedded in the chip (smart card), compares the last four digits of the encoded account number to the keyentered last four digits of the embossed account number, and transmits the full, unaltered contents of the magnetic stripe or chip in the authorization message.

American National Standards Institute (ANSI)

A private, nonprofit organization that administers and coordinates the U.S. voluntary standardization and conformity assessment system in many areas, including computers and communications. ANSI's mission is to enhance both the global competitiveness of U.S. business and the nation's quality of life by promoting and facilitating voluntary consensus standards and conformity assessment systems and safeguarding their integrity.

Acquirer Monitoring Program

A program that monitors an acquirer's fraud activity level and provides reports to the acquirer when its level exceeds established thresholds. Advices and/or Alerts are sent at predefined volumes of fraudulent activity, when the fraud amount exceeds a set dollar amount per month, or when the acquirer's fraud activity to sales ratio exceeds a calculated average.

Age Verification

A security authentication, which can be POS terminal-based, that is used by certain age‐sensitive market segments such as liquor and tobacco outlets, bars, and casinos. The merchant can verify the consumer's age and deny transactions to an underage consumer.

Aggregators

A service bureau that provides bill presentment and/or payment consolidation services. Issuing: Aggregators enable a bank to enroll and aggregate information from multiple bank and brokerage accounts so that it can be presented in one place to the consumer. Merchants: Merchants such as PayPal and Amazon—which act as electronic Internet malls—can process under one merchant number but with multiple sub‐merchant numbers for their individual accounts.

Alphameric or Alphanumeric

A set of letters and numbers. When used in reference to computer input and output, the set usually is expanded to include the uppercase and lowercase alphabetic characters (A‐Z, a‐z), the numeric characters (0‐9), and special characters (such as the symbols $, #, and @, mathematical symbols, and punctuation marks).

Account Receivable Entry (ARC)

A single-entry debit initiated by an automated clearinghouse (ACH) originator to a consumer account of an ACH receiver pursuant to a source document provided by the receiver via postal mail, or at a drop box location or via electronic means. When a paper check payment is converted to an ACH electronic payment and with ARC, the check is destroyed after conversion; in POP, the check is returned to the check writer at the time of payment. These transactions flow through the ACH Network. (Source www.NACHA.org)

Algorithm

A step‐by‐step procedure for solving a problem or accomplishing an end, especially by a computer.

Addendum

A supplemental part or section added to a book or contract. Also called an appendix or schedule.

Access Point

A telecommunication term referring to a device or point where connections may be made for testing or using particular communications circuits.

Account Funding Transaction

A term used by Visa to indicate an electronic commerce purchase transaction for the purpose of adding funds to a Visa prepaid account that is posted to a Visa card and includes the transmission of the Account Funding Transaction Indicator.

Acquiring Processor

A third party contracted by an acquirer to provide credit card acquiring services, such as clearing, billing, reporting, settlement, and operational services. Some acquirers outsource this processing activity to gain cost‐effectiveness.

Adjustment

A transaction used to correct an incorrect or out‐of‐balance situation. An adjustment can be made either at the time a terminal is balancing or during the reconciliation of the settlement data after a transaction has been cleared.

Angel Investor

A wealthy individual who invests his/her private money in what he/she believes to be promising opportunities, such as startup companies. Sometimes two or more "angels" will jointly invest in opportunities to spread the risk. (Source: ventureline.com)

Acceptance Mark

A word, name, symbol, logo, or other device or any combination of devices that identifies the goods or services of one entity from the goods and services of another. A mark that identifies goods is commonly called a trademark. A mark that identifies services is commonly called a service mark. An example of an acceptance mark is the Visa sign in a merchant location.

Addenda Record

An electronic record attached to an ACH payment entry, used for the purpose of transmitting payment‐related information.

Affinity Partner

An entity that is not eligible for membership in either Visa or MasterCard and has a relationship with an issuer for the issuance of affinity cards.

Additional Commercial Card Data

Data required as part of a bank card transaction in addition to the normal data such as cardholder's name and billing address. Additional data—also called enhanced data or level 2 data—can include information relating to sales tax, accounting code, and fuel consumption for fleet cards as required by the card companies on business, corporate, purchasing, and fleet cards.

Accounts Payable (A/P)

Debts a business owes its creditors.

Accounts Receivable (A/R)

Debts owed to a business.

Account Mask Information

Editing criteria used to verify the accuracy of a seller's account number in certain electronic payment transactions.

Account Maintenance

For both the card issuer and the card acquirer, the operation involving nondollar changes to the database, such as name, address, and checking account changes, product profiles, billing information, and rate changes.

Adjudication

In the health care field, the administrative procedure used to process a claim for service according to the covered benefits. The POS industry has implemented some programs to work directly with insurance companies and HMOs to process claims electronically and manage the co‐payment process.

Access Control System Format

In the smart card industry, a term referring to the bit pattern that the reader transmits to the control panel. The format specifies how many bits make up the data stream and what these bits represent. For example, the first few bits might transmit the facility code, the next few the unique ID number, the next few parity, and so on. (Source: Smart Card Alliance).

Analog

Information presented in the form of a continuously varying signal.

Activity File Parameters

Issuer‐established maximum limits on the number and value of transactions that the Association may authorize on the issuer's behalf.

Agent Bank

Issuing: Agent banks contract with larger issuing (or sponsoring) banks to issue cards that are branded with the agent bank's name. Cardholders are solicited through the agent. Shared revenue or fixed compensation may be negotiated, but the liability rests with the sponsoring bank, not the agent. Acquiring: Similar relationships exist in which the agent sells and services the merchants on behalf of the principal bank.

Account Number

Issuing: An issuer‐assigned number that identifies a cardholder's account, the issuer, and the type of financial transaction card (e.g., commercial card or debit card). Acquiring: An acquirer‐assigned number that identifies a particular merchant or group of merchants. Note: The first six digits of each number identify the issuing and acquiring institutions. See BIN.

Acquisition

One organization's purchase of another or the merger of two or more organizations. Acquisition has different consequences under corporate and tax law depending on whether it involves the assets or the capital stock of the target company.

Accountholder Authentication Value (AAV)

One type of security used in the smart card industry to describe a value on the chip that is used to authenticate the accountholder. (Source: Smart Card Alliance)

Account-to-Account

See A2A

ADC

See Account Data Compromises.

AAV

See Accountholder Authentication Value.

Acquirer Fraud Activity Level

See Acquirer Monitoring Program.

AES

See Advanced Encryption Standard.

Account Aggregation

See Aggregators

AFDC

See Aid for Dependent Children.

ABA

See American Bankers Association.

AMEX

See American Express.

ANSI

See American National Standards Institute.

ADA

See Americans with Disabilities Act.

AML Policy

See Anti‐Money Laundering Policy

ADSL

See Asymmetric Digital Subscriber Line.

AF

See Audio Frequency.

ADV

See Automated Accounting Device.

ACH

See Automated Clearing House

AFC

See Automatic Fare Collection System.

Account Takeover

See Cash Theft.

Acquirer Payment Gateway

See Payment Gateway.

ANSI X9.17

Standards for authentication and message encryption key management. These standards are maintained by the American National Standards Institute and can be found at the Computer Security Resource Center (www.csrc.nist.gov).

ANSI X9.52

Standards for data encryption and decryption. These standards are maintained by the American National Standards Institute and can be found at the Computer Security Resource Center (www.csrc.nist.gov).

ANSI X12

Standards that regulate electronic data interchange (EDI) as governed by the American National Standards Institute Accelerated Standards Committee.

ACH Regional Associations

The 36 regional governing bodies of the Automated Clearing House Network rules and regulations.

Americans with Disabilities Act (ADA)

The American with Disabilities Act of 1990 (effective July 26, 1992) prohibits private employers, state and local governments, employment agencies, and labor unions from discriminating against qualified individuals with disabilities in job application procedures, hiring, firing, advancement, compensation, job training, and other terms, conditions, and privileges of employment. The ADA mandates the accessible design of buildings, machines, and public vehicles. The impact to automated teller machines was significant, as the law required accessibility for the physically impaired as well as the sight‐ and hearing‐impaired.

ACH Network

The Automated Clearing House (ACH) Network facilitates commerce, electronically, by serving as an efficient, reliable and secure payments system. NACHA, led by member depository financial institutions and payments associations, fulfills this purpose by managing the development, administration, and governance of the ACH Network, and by providing superior services and value to its members as the industry association responsible for ACH payments. The ACH Network connects the originating depository financial institutions with the receiving depository financial institutions.

Access Time

The amount of time needed to obtain information from, or place information into, computer storage.

Annual Percentage Rate (APR)

The annual cost of financial charges levied on consumer credit as required by the Truth in Lending Act (Regulation Z) of 1969. The lender's administrative costs, profit margin, and interest charges on the loan are typically added to a charge payable throughout the term of the contract and expressed as a percentage of the value of the transaction. The APR is often calculated as the monthly rate times 12.

A2A (Account-to-Account)

The automatic transfer of funds from one account to another. An example is the Fedwire or wire transfer transaction.

Acquiring Bank

The bank that contracts with a merchant, as required by card association rules enabling the merchant to accept the association‐branded bank cards. These cards may be consumer and/or corporate and credit and/or debit or prepaid. The merchant has an account with this bank and each day deposits the value of the dayʹs credit card sales. Acquirers buy (acquire) the merchantʹs sales slips and credit the ticketsʹ value to the merchantʹs account. See Merchant Bank.

ACH Operator

The central clearing facility, operated by a Federal Reserve Bank or a private‐sector organization on behalf of depository financial institutions, in which participating financial institutions transmit or receive ACH entries.

Acquirer's Processing Date

The date upon which the transactions are submitted into interchange for clearing and settlement.

Acquirer

The financial institutions that directly or indirectly enter into contractual relationships with merchants for the acceptance of plastic cards as a form of payment and for maintaining and servicing such relationships.

Activity Limits

The maximum dollar amount, maximum transaction count, or both that can be authorized against a card.

Acquiring Member

The member of MasterCard or Visa that holds the liability for merchant relationships and in return receives all bank card transactions from the merchant. This term can also be used to describe the disburser of funds in a cash disbursement.

Acceptance Criteria

The parameters, procedures, and requirements set up by a risk management and underwriting department that must be met before entering into a contract or arrangement. These criteria apply to the merchant as well as the ISO/MSPs. Typical criteria include financial statements, background checks, site visits, credit checks, product review, and web site review.

Account History

The payment history of an account over a specified period, including the number of times the account was past due or over the credit limit.

Aging

The process by which account receivables are classified by the amount of time that has passed since the date of the invoice. It is used for the purpose of determining delinquency, ranging from current to charge‐off status.

American Standard Code for Information Interchange (ASCII)

The standard code used for information interchange among data processing systems, data communications systems, and associated equipment in the United States. ASCII code is an alphabet used in computer machine languages and represents the standard PC character set.

Account Data Compromises (ADC)

The term used by MasterCard to describe security violations to card and account data.

Activity

The transactions that appear on a cardholder's bill or a merchant's monthly statement.

ABA Transit Routing Number

The unique number devised by the American Bankers Association (ABA) in 1910 that identifies the bank issuer of depository accounts. It is a 10‐digit number (nine digits and a verification digit) issued by the Federal Reserve Bank to identify each bank by a bank identification number. This number (also called the ABA number and the routing transit number) has changed over the years to accommodate such things as the Federal Reserve System, the advent of MICR, and the implementation of the Expedited Funds Availability Act (EFAA). It is used both in check processing and in the ACH (Automated Clearing House) routing of electronic checking account debits. The number is usually the first sequence of numbers preceding an account number at the bottom of a check.

Alert Merchants

Those merchants that have more than 8 percent of their sales dollars labeled as fraud transactions in two consecutive months. Acquirers must terminate or assume chargeback liability on all fraud for one year.

Agent

Under the law of agency, a person authorized by another (known as the "principal") to act for the principal. Agents can include processors, independent sales organizations, third‐party servicers, independent contractors, and financial institutions engaged by a bank card member to provide services or act on its behalf in connection with payment services. For example, an independent sales organization may have a contractual relationship with a bank card member to sell and service retail merchants, thus becoming an agent of the member.

Activity File

Used by Visa's VisaNet Integrated Payments system (VIP) or MasterCard's BankNet system to track an issuer's stand‐in‐processing approval responses within a four‐day period.

ACH Fraud

Utilizing the automated clearinghouse network to access funds illegally. Some ACH fraud categories include: unauthorized transactions; returns/60‐day right of recredit; consumer fraud against merchants; fraudulent use of stolen bank accounts; transaction‐level fraud; and merchant‐level fraud.

Address Verification Service (AVS)

Visa and MasterCard service through which a merchant can verify a cardholder's billing address before completing a transaction. This service is typically used in "card‐not‐present" transactions such as mail order/telephone order (MOTO) and Internet transactions. AVS helps verify the legitimacy of the cardholder but does not guarantee that the transaction is valid. Responses to the AVS request are: Y (exact street and zip code match); A (partial match, street only); Z (partial match, zip code only); N (no match); or U (information is unavailable).