FREQUENTLY ASKED QUESTIONS
FREQUENTLY ASKED QUESTIONS
What is your pricing?
Interchange fee is a set of fee, also called as wholesale processing fee, that merchants pay to process credit card transactions. These fees are fixed by card associations like Visa, Mastercard, Discoveretc and are split between them and the issuingbanks. They account for majority of credit card processing fees. Also, it’s not negotiable and the costs are fixed across the board for all merchant services providers and merchants, big or small.
There are several hundred different interchange fees and are usually made of two different components. A percentage of sales amount and cents. For Example. Interchange for Visa Signature Preferred is 2.10% + 0.10.
So, if you process a $10 Visa Signature preferred card you will pay $0.31 as interchange fee. $10 x 2.1% = $0.21 + $.10 = $0.31
The rate above is just one of interchange rate and varies depending on various factors like
- Type of business :
Defined by MCC code. Supermarket, retail, service station, non-profit etc.
- Processing method:
Card present: These are transactions where the card was present and swiped using an electronic device. Usually at brick and mortar merchants.
Card not present: These are transactions that are manually entered either by the merchant on an secure portal or by customer on an ecommerce site.
- Type of card
Is it a credit or debit card, rewards or without rewards,personal, corporate or small business.
- Card brand
Is it a Visa, MasterCard, Discover or American Express
Honestly, all these different rates are confusing, but if you rather know them, they are listed below.
To begin with, it’s one of the fairest merchant services pricing model for merchants.
“Interchange” in interchange plus represents the "actual wholesale processing" cost charged by Visa, MasterCard and “plus” represents the flat basis point markup over total sales amount.One basis point is equal to 1/100th of 1%, or 0.01% (0.0001)
These two fees, Interchange and assessment fees are NOT negotiable, only the markups (basis Points) are negotiable
We here at Onesto are all about transparency and only offer Interchange plus pricing or Flat monthly fee pricing. We will help you choose the right pricing based on your business.
Besides Interchange fees, card brands levy a certain percentage of sales amount as NABU (network Access Brand Usage) fees, aka Visa Acquirer Processing Fee (APF) or MasterCard Network Access fee in US. These fees are Not marked-up, at least, by us and goes directly to card associations. Again, just like interchange fees, they are not negotiable!
Visa Assessments
| Visa Fee | Pass-Through cost |
|---|---|
| Credit Assessments | 0.13% of credit card volume and $0.0195/transaction. For a $100 credit sale, Visa takes about 15 cents. |
| Debit Assessments | 0.11% of debit card volume and $0.0155/transaction. For a $20 debit sale, Visa takes about 4.1 cents. |
| FANF | Fixed Acquirer Network Fee – Visa charges this flat fee based on how much volume you process per month. Read more here. |
| International Service Assessment Fee | Any card you accept from outside the US will be subject to a 0.80% international surcharge from Visa. |
| International Acquirer Fee | This fee applies under identical circumstances as above – there is an additional 0.45% surcharge from Visa. |
| Transaction Integrity Fee (TIF) | This $0.10/transaction fee is assessed when a settled debit/prepaid card doesn’t meet CPS requirements – such as submitting AVS info on keyed sales and settling every 24 hours. |
| Zero Floor Limit Fee | This $0.10/transaction fee is assessed when a settled transaction can’t be linked to a proper authorization. |
| Zero Dollar Verification Fee | This rarely applied fee of $0.025/transaction applies when cardholder information (AVS, CCV) is verified without authorizing the sale. |
| Misuse of Authorization Fee | This $0.045/transaction fee applies to all authorized transactions that do not have a matching settled sale. |
| Kilobyte Access Fee | This $0.0047/transaction fee is charged for each authorized transaction submitted for settlement. |
| Settlement Network Access Fee | This $0.0025/transaction fee is charged for all US-based settled transactions. |
MasterCard Assessments
| MasterCard Fee | Pass-Through cost |
|---|---|
| Credit/Debit Assessments | 0.12% of card volume and $0.0195/transaction for sales under $1,000. For a $100 sale, MasterCard takes about 14 cents. |
| Credit/Debit Assessments | 0.13% of card volume and $0.0195/transaction for sales over $1,000. For a $2,000 sale, MasterCard takes about $2.62. |
| Digital Enablement Fee | This fee is 0.01% of volume, and applies on Card-Not-Present sales for commercial cards, consumer credit cards, and signature debit cards. |
| Cross Border Assessment Fee (Domestic) | Any card you accept from outside the US will be subject to a 0.60% international surcharge from MasterCard. |
| Cross Border Assessment Fee (Foreign) | Any card you accept from outside the US that is settled in non-US dollars will be subject to a 1.00% international surcharge from MasterCard. |
| Acquirer Program Support Fee | This 0.85% fee applies to any cards you accept from outside the US, just like the Cross Border Assessment Fee (domestic). |
| AVS Fee (Card-Present) | MasterCard assesses a $0.005/transaction fee for using Address Verification Services in a Card-Present environment. |
| AVS Fee (Card-Not-Present) | MasterCard assesses a $0.0075/transaction fee for using Address Verification Services in a Card-Not-Present environment. |
| Card Validation Code Fee | There is a $0.0025/transaction fee for all transactions that are submitted with the Card Validation Code (also known as Card Code Verification or CCV). |
| Kilobyte Access Fee | This $0.00444/transaction fee is charged for each authorized transaction submitted for settlement. |
| Acquirer License Fee | This 0.0045% fee is assessed on all processing volume. |
| Processing Integrity Fee | This $0.055/transaction fee is charged when transactions are not settled within 24 hours for Card-Present sales, or 72 hours for Card-Not-Present sales. |
| Account Status Inquiry Fee | This rarely applied fee of $0.025/transaction applies when cardholder information (AVS, CCV) is verified without authorizing the sale. |
Discover Assessments
| Discover Fee | Pass-Through cost |
|---|---|
| Credit/Debit Assessments | 0.105% of card volume and $0.0185/transaction for all sales. For a $100 sale, Discover takes about 12 cents. |
| International Processing Fee | Any card you accept from outside the US will be subject to a 0.40% international surcharge from Discover. |
| International Service Fee | This 0.55% fee applies to any cards you accept from outside the US, just like the International Processing Fee. |
| Network Authorization Fee | This $0.025/transaction fee is charged for each authorized transaction submitted for settlement. |
American Express Assessments
| AMEX Fee | Pass-Through cost |
|---|---|
| Credit/Debit Assessments | 0.15% of card volume is paid directly to American Express. On a $100 sale, this works out to 15 cents. |
| Card-Not-Present Surcharge | American Express will charge 0.30% of all Card-Not-Present volume |
| International Assessement | This 0.40% fee applies to any cards you accept from outside the US. |
Tiered pricing is the one of the most prevalent and least transparent type of merchant processing fee structure. It’s expensive and is used by processing companies to hide the actual wholesale cost, which in turn, helps them maximize their profit margins.
This type of pricing sets a precedent for many other hidden fees plaguing credit card processing companies.
In short, tiers are different categories and like buckets. Most commonly, they are split into 3 buckets, each assigned different percentage.
Since there are over hundred interchange fees based on the card brand, card type and business MCC code, each merchant service providers desides which interchange category goes into specific bucket. It varies from company to company and there is no way for us to find out.
For example:
An agent walks in and offers you 1.69% + $0.10 besides the usual fees. What that really means is, they will charge you 1.69% +$.10 only on “Qualified” transactions.
A set of rules fixed by the processing company that neither you nor your sales agent will know.
Let’s see how this affects you paying too much
The table below gives an example of how a processor might organize nine common Visa interchange categories under a tiered pricing model for a business that swipes most transactions. Actual interchange categories and fees are listed on the left, followed by the processor's tiered rates in the center, and the markup the processor would earn on each transaction is on the right.
| Interchange Category | Interchange Fee | Processor's Tiered Rates | Processing Markup |
| Retail Debit Reg. | 0.05% + $0.21 | Qualified: 1.69% plus $0.25 | 1.64% + $0.04 |
| Retail Debit Unreg. | 0.95% + $0.20 | 0.74% + $0.05 | |
| Visa CPS/Retail | 1.51% + $0.10 | 0.18% + $0.15 | |
| CNP Debit | 1.60% + $0.15 | Mid-Qualified: 2.25% plus $0.31 | 0.65% + $0.16 |
| Rewards I | 1.65% + $0.10 | 0.60% + $0.21 | |
| Retail Key Entry | 1.80% + $0.10 | 0.45% + $0.21 | |
| Business Card - Retail | 2.20% + $0.10 | Non-Qualified: 3.35% plus $0.31 | 1.15% + $0.21 |
| Signature Preferred | 2.10% + $0.10 | 1.25% + $0.21 | |
| Corporate Card - Retail | 2.10% + $0.10 | 1.25% + $0.21 |
As you can see by this example, interchange rates are substantially lower than the processor tiered rates, and the processor's markup varies widely depending on which tier the processor uses for each interchange category.
Source: CardFellow
To simplify it further, let us give you an analogy of dollar stores.
You ever walked into a dollar store tempted by a big “99 cents store’ sign?
Only to find out there is only a section of store with products marked at .99 cents and the rest at much higher?.Similarly, the tiered rate quoted by the sales agent is just a teaser rate to get you working with them so they can charge you more on the rest of the interchange categories.
Here at Onesto, we never set our customers with this type of pricing. Only interchange plus pricing or flat monthly fee pricing.
FANF fee stands for Fixed Acquirer Network Fee and is directly accessed by Visa and the amount varies based on how your business accepts credit cards – online (card not present) or in-person (card present).
The fees DO NOT apply to non profits with MCC code 8398 and we at Onesto never mark-up these fees.
Virtual Merchants (Card-Not-Present)
| Monthly Volume | FANF price |
|---|---|
| Less than $200 | None |
| Less than $1,250 | 0.15% of Total Volume |
| Less than $4,000 | $7.00/month |
| Less than $8,000 | $9.00/month |
| Less than $40,000 | $15.00/month |
| Less than $200,000 | $45.00/month |
| Less than $800,000 | $120.00/month |
| Less than $2,000,000 | $350.00/month |
| Less than $4,000,000 | $700.00/month |
| Less than $8,000,000 | $1,500.00/month |
Storefront Merchants (In-person)
| Number of Locations | FANF price/location |
|---|---|
| 1-10 | $2.90/month |
| 11-50 | $4.00/month |
| 51-100 | $6.00/month |
| 101-150 | $8.00/month |
| 151-200 | $10.00/month |
| 201-250 | $14.00/month |
| 251-500 | $24.00/month |
PCI COMPLIANCE
The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements and framework that has to be followed by ALL companies who process, store or transmit credit card information, to maintain secure processing environment.
Yes, PCI compliance is required by ALL the merchants, no matter how small their processing volume is. However, its not a complicated process and we will help you get your compliance done in the most efficient manner.
Our cost is $6.60/month, which we pass on to merchant without any markup. If you choose NOT to be PCI compliant, you will be accessed a fee of $19.95/month. We highly suggest you get the compliance done to secure your transaction environment.
For more details on compliance please visit here
Is there a closure fee?
No. We do not charge any closure fee. If you don’t like us, for whatever reason, you have the right to fire us.
HOW WE ARE DIFFERENT?
Onesto was born out of frustration. We hated how merchants were cheated and lied to just because they do not understand how equipment pricing and merchant services work.
We decided to have a completely radical business approach. An approach built on absolute transparency and honesty. We even named our company based on those ethos -Onesto Payments. Btw, Onesto means honesty in Italian.
No Equipment leases – We never advocate or sell multiyear equipment leases like other companies.
No Free terminal – Do you really believe in “free lunch”. Buying the equipment upfront is the best way to save money on processing fees.
No Contract – If you are not happy with us, you have the right to fire us.
Fair and transparent pricing – We only offer interchange plus and flat monthly fee pricing. We always kick the tiered buckets!
Sure, if you are within 75 miles of Zip code 08831. If not, we can still take good care of you from our office.
Terminal How to’s
FD 130 Terminal
1. Insert chip card or swipe magnetic card
2. Enter the amount
3. If prompted, enter the tip amount or press the red9x) key to skip
4. Insert Chip card, swipe magnetic card or key in
5. If prompted, select credit or debit
6. If prompted, instruct the customer to enter the PIN on pinpad
7. Terminal processes the transaction and prints the receipt
1. Press other
2. Select Refund
3. Enter the amount
4. Input the card account or swipe
5. If prompted, select credit to print receipt
1. Press other
2. Select Void
3. Enter the SEQ# from the receipt
4. Confirm the transaction by selecting OK.
5. Terminal prints the void receipt
1. Press other
2. Select Reprint
3. Enter the SEQ# from the receipt
4. Confirm the transaction by selecting OK.
5. Terminal reprints the receipt
1. Press other
2. Select reports
3. Elect print reports
4. Select the desired report type to print
5. Press the red 9x) key to get to the main screen
1. Press other
2. Select Close Batch
3. Review the screen, then select OK to confirm totals
4. Terminal connects and prints a settlement report.
FD 100 Terminal How to’s
- Insert chip card or swipe magnetic card
- Enter the amount
- If prompted, enter the tip amount or press the red9x) key to skip
- Insert Chip card, swipe magnetic card or key in
- If prompted, select credit or debit
- If prompted, instruct the customer to enter the PIN on pinpad
- Terminal processes the transaction and prints the receipt
- Press other
- Select Refund
- Enter the amount
- Input the card account or swipe
- If prompted, select credit to print receipt
- Press other
- Select Void
- Enter the SEQ# from the receipt
- Confirm the transaction by selecting OK.
- Terminal prints the void receipt
- Press other
- Select Reprint
- Enter the SEQ# from the receipt
- Confirm the transaction by selecting OK.
- Terminal reprints the receipt
- Press other
- Select reports
- Elect print reports
- Select the desired report type to print
- Press the red 9x) key to get to the main screen
- Press other
- Select Close Batch
- Review the screen, then select OK to confirm totals
- Terminal connects and prints a settlement report.
Verifone VX520 How to’s
- Select SOFTPAY-FDMS (if option appears)
- Swipe Customer’s Card
- Key Amount of transaction
- Press Enter
- Select Yes to confirm amount No to exit & restart
- Terminal will connect to host
- If approved – Merchant receipt will print Select “Yes” to print customer receipt copy "No" to skip customer copy
- Select SOFTPAY-FDMS (if option appears)
- Select SALE
- Key Amount of Sale
- Press Enter
- Select “Yes” to confirm amount “No” to exit & restart
- Key Card # and press enter
- Key Expiration date (MMYY format) and enter
- Terminal may prompt Zip Code
- If approved – Merchant receipt will print Select “Yes” to print customer receipt copy “No” to skip customer copy
- Select SOFTPAY-FDMS (if option appears)
- Select REFUND
- Key Amount of Refund
- Select Yes to confirm amount No to exit & restart
- Swipe or Key customer’s card
- If keying – press Enter after keying and enter expiration date then enter
- Select Yes to print customer receipt copy No to skip customer copy
- Select SOFTPAY-FDMS (if option appears)
- Select VOID
- Select “Yes” to void last transaction OR “No” for older transactions
- Select Inv# to search by invoice/item # Acct# to search by last 4 of card
- Key Invoice or last 4 of CC#
- Press Enter
- Verify item and Select Yes to void
- Terminal will NOT connect to host but will print confirmation receipt
- Select SOFTPAY-FDMS (if option appears)
- Select ↓ (More key - purple key on far left)
- Select SETTLEMENT
- Terminal will connect to host and print confirmation receipt
- Select SOFTPAY-FDMS (if option appears)
- Press Reprint (Purple key right of Alpha key)
- Select LAST RECEIPT to print last trans or ANY RECEIPT to print any transaction
- Key Invoice/item #
- Press Enter
- Select “Yes” to print customer receipt copy “No” to skip customer copy.
Working with us
- A signed merchant services agreement
- A void Check – We need to know where to deposit your money
- Proof of business formation – Either a certificate of formation, EIN (tax Id) document or business license.
Once we have all the required paperwork, it usually takes 2 business days for your account to be setup. Once setup, we can dispatch your terminal the same day or email you your account details for integration with your ecommerce or POS system.
Depends!
If you prefer control ,efficiency and saving several hours running end of day reporting, Inventory , Payroll etc , you should choose newer cloud POS systems like ShopKeep, Clover, Talech.
But
If you are happy with your current processor the way it is and are emotionally attached to your good old cash register, you should opt for standalone terminal – although we will emphasize you upgrade your equipment to new EMV compliant terminal like Verifone Vx520, FD130, Clover Mini or Ingenico or similar.
We cannot support high risk merchants because of inherent instances of higher charge-backs, business closures and fraud. Listed below is the type of businesses classified as high risk. Although, we do not support them, we can certainly put you in touch with some ethical high risk merchant services provider.
Contact us
- 1-800 type chat sites
- Airlines
- Airplane charters
- ALL sexual oriented or pornographic merchants: (i.e. companion or escort services, adult telephone conversations, adult book stores, dating services, online adult membership or matchmaker services, adult paraphernalia or toys.)
- Antiques
- Auctions
- Automotive brokers
- Bankruptcy attorneys
- Brokering
- “Business opportunities”
- Calling cards
- Casino, gambling or gaming
- Check cashing services
- Cigarette or electronic-cigarette sales or nicotine cartridges
- Coins, collectible currency or autographed collectibles
- Collection agencies
- Coupons or rewards-points program
- Credit or debt repair
- Credit counseling
- Credit protection
- Debt collection
- Direct selling
- Discount health – medical care programs
- Debt consolidation
- Drug paraphernalia
- E-Books (copywrited material)
- Event ticket brokers (unlicensed – non registered (i.e. Stub Hub type merchants))
- Federal Firearms License (FFL) dealers
- Finance broker, financial consulting or loan modification services
- Indirect financial consulting (i.e. How to Save Money by Lowering Your Electric Bill.)
- Financial planning, strategy or advising
- “Get rich quick” – books, programs, etc…
- “How-To” type websites (i.e. “Learn How-To Make Money on The Internet”)
- Horoscopes, astrology or psychic services (i.e. fortune tellers)
- International merchants (non US based)
- Lawyer referral services
- Life coaching
- Membership organizations (over 12 months)
- Merchants on the terminated merchant file (TMF list)
- Multi-level marketing (MLM)
- Non US citizens
- Pawn shops
- In-bound or outbound telemarketing services
- Replica handbags, watches, wallets, sunglasses etc… (knock-offs)
- Sports forecasting or odds making/betting
- Talent agencies
- Telecommunications
- Telephone companies
- Time-shares or time-shares advertising
- Tour operators
- Travel agencies
- Vacation planners
- Vacation rentals (unless property is owned by merchant)
- Vitamin and supplement sales – diet pills, prescription pills, health supplements, pharmacy
Depending on the time you batch out (settle).
If you settle before 6PM EST:
Funds are posted next business day for the full amount. Applies only to transactions done Monday – Thursday. Any transactions done on Friday get posted on Monday and any on Sat and Sun will get posted on Tuesday since the banks are closed on weekends.
If you settle after 6pm EST:
You funds are deposited within 48hr for weekday transaction. Transactions from Friday, Sat and Sun will be posted on Tuesday.
The old merchant account stays open until you, the merchant, send a cancellation request. Most of the merchant services company require a written cancellation request. We can consult with you and guide on how to properly cancel your old account.
Since Onesto offers Optblue program from Amex, all the transactions, including American Express are bundled into one deposit with visa, mastercard, discover and deposited according to funding schedule. You do not get a separate statement for Amex. Everything is reported on the same monthly statement.
In most cases yes.
Social number is used to comply with Patriot law in verifying the identity of the person applying for merchant account.
Personal guarantee is to protect Onesto and processing bank in case business is not able to pay, for any reason, the month end processing fee and or any chargeback fees.
Personal guarantee is NOT required in case of non profits and government accounts.
Also, in case of established businesses, last years tax returns, last 3 months of bank statement or financials like P&L statements can be used in lieu of social security number.
Nope. We believe customer stay forever when you offer fair pricing and exceptional customer service. Contracts are irrelevant at that point.
CREDIT CARD TERMINALS
EMV stands for Euronet MasterCard Visa and for you to be in compliant with EMV liability shift, you will need one of these terminal. These equipments are identified by a slot below the keypad where merchant can dip the chip cards.
You have many choices when it comes to EMV compliant terminals. Based on your needs and setup below is what we recommend
For processing standalone transactions over dial-up or Ethernet cable:
Verifone vx520 – $250 plus $20 shipping
Ingenicoict220 Dual Comm –$250 plus $20 shipping.
FD 130 – $ 350 plus $20 shipping To adjust tips with EMV transactions.
Clover Mini - $450 plus $20 shipping. Modern terminal with on screen signature option.
We can sell you EMV compliant terminals for fair price or you can either buy online and have us reprogrammed.
Caution: Always buy from reputed online sellers only and make sure they are brand new and are not locked to a single processor. Do let them know the name of your processor before you place an order. Also, NEVER buy used equipment from Ebay.
Contrary to lot of misbelieve, it’s NOT a law but you should upgrade before you start seeing fraud happen at your store. The image below should give you a better understanding on why you should upgrade.
NFC stands for near field communication. As the name implies, the whole traditional process of accepting credit card, either thru swipe or chip, is eliminated. Instead, customers just tap their phone to NFC enabled terminal and transaction is completely in seconds.
Apple and Android pay use the same technology but are restricted to their respective operating platform.
Glossary of credit card processing terms
Acquirer, Acquiring Bank
A financial institution that is a member of Visa ® and/or MasterCard ® and maintains the merchant credit card
processing relationship. The acquirer receives all transactions from the merchant to be distributed to the issuing
banks.
Address Verification Service (AVS)
A service supported by Visa, MasterCard, Discover and American Express ® that verifies the cardholder's billing
address against the one on file with the issuer. AVS is designed to help combat fraud in non-face- to-face
transactions.
Advanced Programming Interface (API)
APIs allow users to program to a pre-constructed interface, instead of individually programming a device or piece of
software.
Association
MasterCard International, Visa U.S.A. or Visa International, which are licensing regulatory agencies for bank card
activities.
Authorization
The process by which a transaction is approved by the issuer, or by Visa/MasterCard on behalf of the issuer.
Permission is given to (or denied) the merchant, via the acquirer, to accept a specific transaction from the cardholder
account. An authorization indicates only that the card is valid and that sufficient funds are available on the
cardholder's credit limit at the time the request is made.
Authorization Approval Code
The numerical code designated by the issuer, assigned to a sales transaction as verification that the sale is
authorized.
Authorization Only (Auth Only)
Used to reserve an amount against a credit card's available credit limit for intended purchases. Authorization Only is
most frequently used in the lodging (check-in), restaurant (tab) and car rental (pick-up) industries, where an approval
is received for an estimated amount prior to the finalization of the charge amount.
Authorization Request
A merchant's request for an authorization to accept a cardholder's sales transaction. An authorization request can
occur electronically via a credit card processing terminal or via telephone as a voice authorization.
Average Ticket
The average dollar amount of sale for credit card transactions.
Back-End Network
The settlement provider responsible for finalizing transactions, routing payment to a merchant's account and
generating statements.
Bank Identification Number (BIN)
A unique series of numbers assigned by Visa/MasterCard to a member institution, which identifies that institution in
transaction processing. The BIN comprises the first six digits of a standard credit card number.
Bank Card
A card issued by a banking institution with a MasterCard or Visa brand.
Batch
A group of approved credit card transactions, usually accumulated during one business day.
Batch Deposit
The electronic depositing of a batch file transmitted to the transaction processor for settlement.
Batch Processing
The authorization of transactions offline when immediate approval is not required. Transactions are collected in a
batch and sent as one transmission for authorization and/or settlement. Batch processing is generally used with mail
order/telephone order (MOTO) transactions.
Capture
Receiving and storing transaction data at the processor's host computer, to be submitted later for processing and
payment.
Card-Not- Present
A type of card transaction in which the card is not present at the point of sale for the magnetic stripe to be read.
These are considered higher risk transactions.
Card Present
A type of transaction in which the card is present and is swiped through an electronic device that reads the contents
of the magnetic stripe on the back of the card.
Cardholder
The person to whom a payment card is issued, or an additional person authorized by the original cardholder to use
the card.
Chargeback
A challenge to a transaction initiated by the issuer or cardholder that is returned to the acquirer for resolution.
Chargeback Fee
The amount assessed by the acquirer for processing chargebacks.
Chargeback Reason Code
A numerical code that identifies the specific reason for a chargeback. MasterCard and Visa each have their own
chargeback codes.
Check Card
A bank card that can be used with a PIN at an ATM or without a PIN at the point of sale, also known as an offline
debit card. When used at the point of sale, the transaction is processed through interchange as a credit card
transaction with the funds debited from the cardholder's checking account.
Close
Sending a merchant's completed transactions to the host for processing. (See also "Settlement")
Credit
A refund or price adjustment given for a previous purchase.
CVC2
Card Validation Code - MasterCard term for the three-digit code printed next to the card number in the signature
panel and used as part of the authorization process.
CVV2
Card Verification Value - Visa term for the three-digit code printed next to the card number in the signature panel and
used as part of the authorization process.
Data Encryption
The scrambling of data so only the intended users can read and understand the encrypted information.
DBA
Doing Business As - the name a business uses to operate.
Debit Card
A bankcard used to purchase goods and services and to obtain cash, which debits the cardholder's personal
checking account. During online debit transactions, the cardholder must enter a PIN.
Debit Switch
A portal that transmits debit data between gateway banks and debit card issuers - also referred to as "Debit Network."
Only financial institutions may be members of debit switches.
Decline
A response from the card issuer denying the use of the card for the attempted transaction. If a request for approval is
declined, the merchant must ask the cardholder for another form of payment.
Dial-Up Terminal
An authorization terminal that uses a telephone line to communicate with the authorization center.
Discount Rate
The fees charged by the card acquirer to the merchant for processing payment card transactions.
Electronic Benefits Transfer (EBT)
The automation of government benefits through electronic authorization, data capture and settlement processes.
Plastic cards with magnetic stripes are used, eliminating paper benefits and coupon distribution.
Encryption
Method of scrambling data to protect a cardholder's personal information.
Fleet Card
Payment card designed mainly for fueling, maintenance and repairs of corporate motor vehicles. Fleet cards are
normally used to provide specialized reporting.
Folio
A number assigned by a lodging merchant for tracking a guest's charges.
Fraud Investigation
The process of identifying suspicious merchant or cardholder activity.
Front-End Network
Network provider responsible for authorizing and capturing transactions and forwarding the information to the back-
end network.
Gateway
Manages the electronic connection between consumers and their financial institutions and transmits data.
Gift Card
A reusable, stored-value card that enables merchants to have an electronic alternative to paper gift certificates.
Interchange
The exchange of transaction data between acquiring and issuing institutions.
Interchange Fees
Fees paid by the acquirer to the issuer to compensate for transaction-related costs. MasterCard and Visa establish
interchange fee rates.
Issuer, Issuing Bank
The financial institution and member of Visa or MasterCard that holds contractual agreements with, and issues cards
to, cardholders.
Magnetic Stripe
A panel located on the back of a payment card containing magnetically encoded cardholder account information.
Magnetic Stripe Reader
A point-of- sale device that reads the encoded information from the magnetic stripe when the card is passed through
the reader. Readers may read Track Two, which contains the cardholder account number and expiration date, or both
Track Two and Track One, which contains the cardholder name.
Merchant Agreement
The written contract between the merchant and acquirer that details their respective rights, responsibilities and
warranties.
Merchant Category Code (MCC)
A universal four-digit merchant classification code that identifies the merchant by type of processing, authorization
and settlement. Similar to a Standard Industrial Classification (SIC), but more defined.
Merchant Discount
The fee an acquiring member charges the merchant to cover the costs of providing deposit credit and handling credit
card sales transactions.
Merchant Identification (MID) Number
The identification number or account number assigned to a merchant by the credit card processing company.
Offline Debit
Debit transaction that occurs when a Visa/MasterCard check card is authorized through the credit card system and
the amount is debited from the cardholder's checking (DDA) account.
Offline Transaction
A transaction that is authorized through a voice authorization and later keyed into a POS terminal prior to settlement.
Point-of- Sale (POS)
The location at which a payment card transaction occurs, usually by way of a device such as a credit card terminal or
cash register.
Posting
The process of recording debits and credits to an account.
Processing Fees
The fees associated with the processing of credit card transactions.
Processor
A company responsible for processing interchange transactions - operated by an acquirer or acting on the acquirer's
behalf.
Recurring Transaction
A transaction charged to a cardholder's account (with prior permission) on a periodic basis for recurring goods and
services, i.e., health club memberships.
Refund
A refund occurs when the merchant rebates all, or a portion, of an original transaction amount to the cardholder.
Refunds are made to the same card that was used for the original transaction. Similar to a Credit.
Retail Transaction
A face-to- face transaction in which the cardholder presents a card to the merchant to pay for goods or services.
Retrieval Request
A request by the issuer to the acquirer for a copy of the original sales ticket.
Reversal
When an acquirer successfully represents a chargeback to the issuer, the chargeback is reversed and the funds are
returned to the merchant.
Sales Transaction Fee
The amount the financial institution charges a merchant for each sales transaction.
Settlement
The process in which a merchant transmits batches of transactions to the acquirer. In interchange, it is the process by
which acquirers and issuers exchange financial data resulting from sales transactions, cash advances, merchandise
credits, etc.
Smart Card
A payment card with a built-in microprocessor (chip) that stores information. Smart cards can be used for stored-
value cards, credit cards, loyalty programs and security access.
Transaction
Any action between a cardholder and a merchant or member that results in activity on the account, such as a
purchase, cash advance or credit.
Transaction Date
The actual date on which a transaction occurs.
Transaction Fee
The amount a merchant pays per transaction for processing.
Voice Authorization
Transactions authorized by a voice operator. Voice-approved transactions must be "forced" into a terminal batch for
settlement.
Zero Floor Limit
Requires that all transactions receive authorization.
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