Glenbrook Payments Glossary - BETA
The Glenbrook Payments Glossary is a work in progress, ever evolving as we update it with new/revised definitions. You can help - for how we together can make this glossary better!
Below the glossary is a list of some additional payments-related glossaries available online.
| Word or Phrase | Definition |
| A2A | |
| ABA | American Bankers Association |
| ABA Number | See Routing/Transit Number |
| Acceptance | |
| ACH | The Automated Clearing House |
| ACH Credit | An ACH transaction originated to pay another party (deposit) |
| ACH Debit | An ACH transaction originated to debit another party (withdrawal) |
| ACH Operator | A "hub" that processes ACH transactions between originators (ODFI's) and receivers (RDFI's). Currently, there are two ACH operators in the US: the Federal Reserve and The Clearing House |
| ACH-Based Electronic Check | A payment that begins as a paper check or other source document is converted into an ACH debit entry |
| Acquirer, Acquirer Bank | The financial institution the signs merchants for card acceptance, pays the merchant for card payments submitted by the merchant, and is responsible for ensuring merchant compliance with card network regulations |
| Acquirer Processor | The processor that actually handles merchant payment card transactions. May be the acquirer or may be outsourced by the acquirer to a third-party processor (e.g., First Data, TSYS Acquiring, etc.) |
| Activation | The process of enabling a card for use. Cards are generally mailed inactive and the cardholder must complete a phone call to the issuer to have the card activated for use. |
| Addenda Record | An electronic data record which is appended to an ACH payment entry |
| Address Verification System | A risk management service provided by some card networks for card-not-present transactions |
| Affinity Card | |
| Aggregation | The combination of separate payment transactions into a single transaction |
| Annual Percentage Rate (APR) | The yearly interest rate paid on an outstanding balance on a credit card |
| ANSI X12 | Standards that regulate electronic data interchange (EDI) as governed by the American National Standards Institute |
| ARC | Short for "Accounts Receivable Conversion", an ACH transaction code used when certain checks are converted to ACH by the receiver of the check |
| ATM | |
| ATM Driving | |
| Authentication | |
| Authorization | For card payments, the process by which a card issuer approves a card transaction as valid; for ACH, the term refers to an agreement between a Receiver and an Originator that allows the Originator to initiate transactions to a Receiver's account |
| Automated Clearing House | A nationwide electronic funds transfer system that allows participating financial institutions to exchange payments |
| Auxiliary On-Us Field | An optional line of MICR code at the bottom of a check |
| Address Verification Service (AVS) | A service provided by some payment card networks that enables a merchant to verify the cardholder's address on file with the card issuer. AVS is used by many card not present merchants as a technique to combat fraud. |
| Back-Office Conversion (BOC) | An ACH transaction code used when certain checks are converted to ACH |
| Balance Transfer | The process of moving an upaid credit card balance from one issuing bank to another |
| Bank Identification Number (BIN) | The first six digits of a payment card number; identifies the network the card belongs to as well as the issuing bank |
| Bank of First Deposit | |
| Bank Routing Number | See Routing Transit Number |
| Bankcard | A bank-issued payment card |
| Banking Day | Any day on which a DFI is ope to the public for carrying on substantially all of its financial functions |
| Batch | The accumulation of transactions over a period of time, typically a day |
| Batch Processing | The transmission or processing of a group of related payment instructions |
| Bill Consolidator | A Bill Service Provider that consolidates bills from other Bill Service Providers or Billers and delivers them for presentment to the Customer Service Provider |
| Bill Detail | Information from a Biller that provides line level information to a customer. This may include specific billing event information such as credit card charges, telephone calls, or kilowatts used. Also: Invoice Detail |
| Bill Notification | A process whereby a Customer is notified that an electronic bill is available for review and payment. |
| Bill Summary | The summary information from a Biller that is essential to a Customer to understand what is owed. Typical information may include; Amount Owed, Date Due, Biller, Biller's Account Number. Also: Summary Record, Summary, Invoice Summary, etc. |
| Bill/Invoice | An electronic or paper document sent to a customer associated with a payment due. |
| Biller | A company or organization that sends a Bill, Invoice, or Statement, usually a request for payment for a product or service, to a Customer |
| Biller Direct | |
| Biller Payment Provider (BPP) | An agent of the Biller that accepts remittance information on behalf of the Biller. |
| Biller Service Provider (BSP) | An agent of the Biller that provides an EBPP service for the Biller. |
| Biometric | |
| Blocks | See: Debit Block |
| Book Entry System | An accounting system that permits the transfer of assets (such as securities) without the physical movement of paper documents or certificates. |
| Bounce | |
| Browser (Web-browser) | Software program used to view resources on the Internet's World Wide Web |
| Business Day | A day on which a financial institution is open and performing substantially all of it operations. |
| Buyer Direct | EIPP model connecting one buyer to many sellers. Sellers post their invoice data to the buyer's site. |
| Capture | (1) The submission of an electronic credit card transaction for financial settlement. Authorized credit card sales must be captured and settled in order for a merchant to receive funds for those sales. Also see Settlement. (2) A term used to describe the image and encoding process for a deposited check, e.g. branch capture or ATM capture. |
| Card Identification Number (CID) | American Express's implementation of Card Verification Value 2. A four digit number on the front of an American Express card. |
| Card Not Present (CNP) | That class of payment card transactions where the physical card's magnetic stripe (or chip) is not read at the point of acceptance. Mail Order / Telephone Order (MO/TO) and eCommerce merchants are typically CNP merchants. |
| Card Validation Code | MasterCard's implementation of Card Verification Value 2. A three digit number printed on the signature panel on the back of the card |
| Card Verification Value (CVV) | A three digit "hash" encoded on the magnetic stripe of a payment card. Intended to thwart counterfeiting of cards from paper receipts. |
| Card Verification Value 2 (CVV2) | Visa's implementation. A three digit number printed on the back of the card. |
| Cardholder | Any person who holds a payment card account |
| Cardholder Information Security Program (CISP) | Visa's program to set standards for the protection of payment card data. See also Payment Card Industry - Data Security Standard (PCI-DSS) |
| Cash Advance | A cardholder may obtain cash on the spot (typically from an ATM); typically involves higher fees to the cardholder, interest from the date of cash advance, etc. |
| CCD | Cash Concentration / Disbursement; a credit or debit ACH entry initiated by an organization to make a payment or to consolidate funds. |
| CEBP | NACHA's Council for Electronic Billing and Payment |
| Charge Card | |
| Chargeback | A consumer cardholder refusing to pay for a specific purchase results in a chargeback from the issuer to the acquirer/merchant to collect the funds from the merchant's account |
| Check | A retail payment instrument consisting of a written order from one party (the drawer) to another party (the drawee, normally a bank) requiring the drawee to pay a specified sum on demand to the drawer or to a third party specified by a drawer. |
| Check 21 | |
| Check Authorization | A service that validates check routing numbers and account information to determine if the checkout account is valid. Does not validate that funds are available. |
| Check Conversion | The process of converting a paper check to an ACH debit or ATM/point-of-sale debit. |
| Check Debit | An EFT Network service through which a paper check, presented to a merchant or other check acceptor, is converted into a real-time electronic transaction that debits funds for the amount of the check from the accountholder's account and credits those funds to the merchant's or check acceptor's account, provided that the account is valid and has sufficient funds to cover the transaction. Such funds are guaranteed for transactions accepted by the payor bank |
| Check Digit | A digit, often the final digit of an account number, calculated by applying an algorithm to all or some of the other digits in the account number to test the validity of the whole account number |
| Check Guarantee | A service that guarantees the checkwriter's payment and assumes the collections risk of check payments for a merchant. |
| Check Safekeeping | The customer's financial institution keeps the customer's checks, not returning it in the customer's statement. The customer may receive an image of the check in the statement |
| Check Truncation | The conversion of a check to an electronic debit or image of the check by someone in the payment system other then the paying bank. The transaction may be governed by check law (UCC, Reg CC and Clearing house rules) or by electronic banking law (Electronic Fund Transfer Act) |
| Check Verification | A service accessing customer and/or account databases through a point of sale system and/or by phone to verify or authorize that the check writer and/or checking account information is valid and/or in good standing. |
| Chip Card | |
| CHIPS | |
| CID | See Card Identification Number |
| Clearance | The process of transmitting, reconciling, and in some cases, confirming payments orders or financial instrument transfer instructions prior to settlement |
| Clearing | A term used in multiple payments systems to refer to processes by which one bank collects payment from another bank as a result of a payment transaction. |
| Clearing Account | Deposit account held by banks and thrift institutions at the Federal Reserve. Unlike reserve accounts, which institutions are required to maintain, clearing accounts are held if their required reserve balances are not large enough to cover the dollar volume of their check clearing and other transfers of funds through the Federal Reserve |
| Clearing Corporation (aka Clearinghouse) | A central processing mechanism through which financial institutions agree to exchange payment instructions or other financial obligations (e.g. securities). The institutions settle for items exchanged at a designated time based on the rules and procedures of the clearing corporation. In some cases, the clearing corporation may assume significant counterparty, financial, or risk management responsibilities for the clearing system |
| Clearing House | The organization that collects, sorts and classifies, and distributes information, usually among a large number of organizations or entities |
| CNP | See Card Not Present |
| Co-Brand Card | |
| Composite Receivers File | A directory of all RDFIs served by an ACH Operator. |
| Consolidator | A Biller Service Provider that consolidates bills from multiple Billers or other Bill Service Providers (BSPs) and delivers them for presentment to the Customer Service Provider (CSP) . |
| Controlled Disbursement | A bank service provided typically to corporate customers wherein the company is notified early in the day of the dollar amount of items waiting to clear the account later that day; the company funds the account with the exact amount to clear the items. |
| Corporate Card | A payment card used by authorized employee/cardholders for supplies, travel, and entertainment expenses incurred during the course of business for a company |
| Correspondent Bank | A bank that holds deposits for other banks and performs services, such as check clearing |
| Correspondent Banking | |
| Counterfeit | |
| Credit | An entry to the record of an account that represents the transfer or placement of funds into an account. |
| Credit Cap | Limit on the dollar amount of credit transactions that a company can originate from an account or entity. |
| Credit Card | A payment card issued to a person for purchasing goods and services and obtaining cash against a line of credit established by the issuer. Credit cards may be of two types: those issued by merchants and vendor (such as a store) and those issued by banks (such as VISA and MasterCard). Cardholders may also be able to receive other bankcard services. |
| Credit Card Processor | A financial institution or third party that process credit card transactions. |
| Credit History | Record of how a consumer has paid accounts in the past, used as a guide to determine whether the consumer is likely to pay accounts on time in the future |
| Credit Line/ Line of Credit | Also referred to as your credit limit. This is the maximum amount you can borrow using your card. |
| Credit Score | A numerical value computed based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person, which is the likelihood that the person will pay his or her debts in a timely manner |
| CTR | Customer Transaction Record |
| CTX | Corporate Trade Exchange - an ACH transaction code used for B2B payments. |
| CUNA | Credit Union National Association |
| Custodian | An entity, often a bank, that safekeeps securities for its customers and may provide various other services, including clearance and settlement, cash management, foreign exchange, and securities lending. |
| Customer Service Provider (CSP) | An agent of the Customer that provides an interface directly to customers, businesses or others for bill presentment. CSP enrolls customers, enables presentment and provides customer care, among other functions |
| Data Encryption Standard (DES) | A technique by which a message is scrambled into an indecipherable stream of bits for transmission. |
| Data Transmission | The electronic exchange of information between two data processing points (computers). |
| Day 2 Processing | |
| Daylight Overdraft | A negative position in an institution's Federal Reserve account. |
| DDA | |
| Debit | An entry to request transfer or removal of funds from an account. |
| Debit Block | Process used to restrict debits to a demand deposit account (generally limited to business accounts). |
| Debit Cap | Limit on the dollar amount of debit transactions for an account or entity. |
| Debit Filters | See: Debit Block |
| Decoupled Debit Card | A payment card that is accepted by merchants as a network-issued debit card but where the funding for the purchase amount is obtained from the consumer's checking account via ACH. Capital One introduced a Decoupled Debit product in June 2007. |
| Delivery-vs-Payments system (DVP) | Failure to complete a funds or securities transfer according to its terms for reasons that are not technical or temporary, usually as a result of bankruptcy |
| Depository | A credit that references a previous transaction. The credit amount cannot be more than the credit card was originally billed for. |
| Depository Financial Institution | A financial institution able to receive deposits from its customers or credits from the Federal Reserve Bank. |
| Descriptive Statement | A bank account summary that contains information concerning one or more entries for which no separate item is enclosed. ACH entries necessitate some form of descriptive statement unless a substitute enclosure document is produced by the financial institution. Minimum reporting requirements are defined by Regulation E. |
| DFI | Depository Financial Institution |
| Device | |
| Direct Debit | Electronic transfer--usually via ACH--out of an individual's checking (or savings) account to pay recurring bills, such as mortgage payments, insurance premiums and utility payments |
| Direct Deposit | Electronic deposits or credit--usually via ACH--to an individual's bank account. Common uses of direct deposit include payroll payments, Social Security benefits and income from investments, such as CDs, annuities and mutual funds |
| Discount Fee | |
| Discount Rate | The percentage of sales amounts that the bankcard acquirer or T&E card issuer charges the merchant for the settlement of the transactions. |
| Dual Message | |
| Duality | |
| EBPP | Electronic Bill Presentment and Payment – The electronic presentation of statements |
| ECC | Electronic Check Council |
| ECCHO | Electronic Check Clearing House Organization |
| E-check | A generic term for a set of ACH transaction codes, including check to ACH conversion (ARC, POP, BOX); check representment by ACH (RCK) or an ACH debit to a consumer account that is originated on the Internet, at the point of sale, over the telephone, or by a bill payment sent through the email or dropped in an unattended dropbox. |
| E-commerce | A broad term encompassing the remote procurement and payment by businesses or consumers of goods and services through electronic systems, such as the Internet |
| ECP | Electronic Check Presentment |
| ECR | |
| EDI | Electronic Data Interchange |
| Effective Entry Date | The date placed on an ACH transaction by the originator of the transaction or the ODFI |
| EFT | Electronic Funds Transfer |
| EIPP | Electronic Invoice Presentment and Payment – In the B2B arena, EIPP is the presentment of an invoice from a seller to a buyer, and corresponding payment from a buyer to a seller |
| Electronic Benefits Transfer (EBT) | A type of EFT (see below) system involving the transfer of public entitlement payments, such as welfare or food stamps, via direct deposit or point-of-sale technology (see POS). The recipient can be given an identification card, similar to a benefit card, and a PIN number to allow them to access the benefits through an electronic network |
| Electronic Bill Presentment and Payment (EBPP) | The electronic presentation of statements, bills, invoices and related information sent by a company to its customers, and corresponding payment for goods or services. |
| Electronic Check | Refers to several types of electronic transactions. It is a a catch-all term used loosely to refer to any attempt to initiate payment through PCs, the Internet, and computer systems |
| Electronic Check Council | A membership organization of financial institutions, companies and other interested entities dedicated to improving check clearing and collection. Operated under the auspices of NACHA _ The Electronic Payments Association |
| Electronic Check Presentment | The electronic transmission of the contents of a cash letter (as captured from the MICR line on each check) to the drawee bank ahead of the physical arrival of the checks actually in the cash letter. |
| Electronic Data Interchange (EDI) | The communication of trade-related information among business partners in a structured, standardized, machine-readable electronic form |
| Electronic Fund Transfer Act | The law passed by the US Congress in 1978 which set out the rights and obligations of consumers and their financial institutions regarding the use of electronic systems to transfer funds. This act is implemented in the Federal Reserve Bank's Regulation E. |
| Electronic Funds Transfer (EFT) | A generic term used whenever money is moved without the use of a check or draft. |
| Electronic Payment | Any non-paper based payment |
| Emerging Payments | |
| Encryption | A method of changing data into secret code |
| Enrollment | The process associated with a Customer establishing a relationship with a CSP. |
| Exception Processing | |
| Face to Face | |
| FDIC | |
| Fedwire | Payment system operated by the Federal Reserve or payment transactions that are electronically initiated and settled on the same day. |
| FFIEC | |
| FI | Financial Institution |
| Finality | An irrevocable and unconditional transfer of payment which occurs during settlement. |
| Finance Charges | The price paid to a lender for the use of borrowed money. Interest is charged as a percentage of your outstanding balance (purchases and charges reduced by payments or credits posted). This percentage, or interest rate, can vary from card to card |
| Financial EDI (FEDI) | An instrument for settling invoices by initiating payments, processing remittance data and automating reconciliation, via the exchange of electronic messages |
| Financial Institution (FI) | A State or Federally chartered depository institution, such as a bank, savings and loan, credit union |
| Fixed Rate | A set APR that does not change in response to interest rate changes and conditions. A Variable Rate periodically goes up or down based on fluctuations in market interest rates as reflected in a published index (e.g., the prime rate published in the Wall Street Journal) |
| Float | Amount of time represented by checks that are in transit between banks for collection. This includes processing and mail time. More generally used within payment systems to describe situations where one party benefits from holding funds for a period of time. |
| Floor Limit | |
| FMS | Financial Management Service of the US Federal Reserve. |
| Follow-on transaction | A transaction that relies on a previous transaction to complete. Dependant credits, captures and voids are follow-on transactions |
| Foreign Exchange Settlement Risk (aka Herstatt Risk) | The potential loss of principal associated with settling transactions sequentially instead of simultaneously. |
| Forward Collection | The process of collecting and settling funds for checks (demand instruments) from the Bank of First to Deposit to the Paying Bank. |
| Fraud Screening/TD | |
| FRB | Federal Reserve Bank |
| Funds Availability | The time at which funds associated with ACH, cash or check deposits are made available to the account holder |
| Gateway | An interface to a financial institution that allows the processing of credit card transactions. |
| Geolocation | |
| Gift Card | |
| Grace Period | A period of time — usually 20-25 days — when you're not charged interest for purchases you've made. For example, if the billing date on your credit card bill is May 1 and you have paid your prior balance in full, you may have until May 20 to pay your new balance in full. If you do, you will not be charged interest. If your payment arrives after May 20 — or if you don't pay the entire balance — you may be charged interest from the date of purchase as posted. Some accounts have no grace period, which means interest is charged on purchases from the date they are posted |
| Guaranteed Funds | Both sender and receiver know funds are available at the time of payment |
| HTML | HyperText Markup Language |
| HyperText Transfer Protocol (HTTP) | A protocol used for the transmission of web pages and other documents and files over the World Wide Web. |
| ICBA | Independent Community Bankers of America |
| IFX | Interactive Financial Exchange |
| ILC | |
| Image | |
| Interchange | The standardized electronic exchange of financial and non-financial data associated with sale and credit data between merchant acquirers and card issuers on various types of MasterCard and Visa transactions. |
| Interchange Fee | A fee defined by a payment network which is paid from one bank participant in a transaction to the other bank participant in the transaction. Most typically, it is a fee assessed by card payment networks which requires the acquiring (merchant) bank to pay the issuing (cardholder) bank. In this example, the acquiring bank will always pass the cost on to the merchant. Fees typically vary by payment network, transactiona category, and payment instrument type. |
| Interoperability | Standards and file formats promoting interaction between systems. |
| Introductory Period | The time period during which the Introductory Rate applies to balances outstanding on your account. |
| Introductory Rate | A special APR that applies for only a limited period of time. Sometimes also called a teaser rate. |
| Invoice (or Billing) Cycle | The period of time between the recurring events of updating, invoicing, and charging for services rendered |
| Invoice Detail | Standards and file formats promoting interaction between systems. |
| Invoice Notification | The time period during which the Introductory Rate applies to balances outstanding on your account. |
| Invoice Summary | A special APR that applies for only a limited period of time. Sometimes also called a teaser rate. |
| IRD | |
| ISO | |
| ISP | The period of time between the recurring events of updating, invoicing, and charging for services rendered |
| Issuer | The issuing financial institution extends credit to a cardholder through bankcard accounts. The financial institution issues a credit card and bills the cardholder for purchases against the bankcard account. Also referred to as the cardholder's financial institution. |
| Issuer Reimbursement Fee (IRF)See: Interchange Fee | |
| Issuing Bank | A financial institution that issues credit cards to consumers on behalf of the card associations. Also know as Card Issuing Bank or Issuer |
| JCB J/Secure | JCB's implementation of payer authentication. Similar to MasterCard SecureCode and Verified by Visa. |
| KBA (Knowledge-Based Authentication) | |
| KYC (Know Your Customer) | |
| Large-Value Transfer System | The issuing financial institution extends credit to a cardholder through bankcard accounts. The financial institution issues a credit card and bills the cardholder for purchases against the bankcard account. Also referred to as the cardholder's financial institution. |
| Legacy System | A financial institution that issues credit cards to consumers on behalf of the card associations. Also know as Card Issuing Bank or Issuer |
| Lockbox | JCB's implementation of payer authentication. Similar to MasterCard SecureCode and Verified by Visa. |
| Lockbox Provider | A lockbox provider manages a lockbox for a business, processing incoming payments to streamline operations, decrease float and accelerate check clearing times |
| Magnetic Ink Character Recognition (MICR) Line | The characters on the bottom line on the face of a paper check that contains the routing/transit number of the financial institution the check is drawn on, the account number of the drawee (Receiver) and the check number, all printed in machine readable magnetic ink in a font devised for check reading |
| Magnetic Stripe | |
| Mail Order/Telephone Order (MO/TO) | Credit card transactions initiated via mail, email or telephone orders. Also known as card-not-present transactions |
| Master Merchant | |
| MasterCard RPPS | Electronic payment network for commercial payments: used in particular for bill payment transactions. |
| MasterCard SecureCode | MasterCard payer authentication technology that runs on a Web-browser and verifies that a MasterCard cardholder is authorized to use the card. SecureCode qualifies the transaction for a guaranteed payment that protects against cardholder unauthorized chargebacks. PPI BuyerAuth is an optional product feature that implements MasterCard SecureCode, as well as Verified by Visa and JCB J/Secure |
| Memo Posting | A notation posted to an account which indicates a credit has been received, but has not yet been posted to the account |
| Merchant | The seller of goods and services |
| Merchant Account | A financial institution or bank account that is used by a merchant specifically for the purpose of collecting proceeds consumer bank account or credit card payment transactions. A Card Present (CP) merchant account is used by merchants that receive payments in a physical location where payment is physically presented to the merchant by the customer at the time of the transaction. A Card Not Present (CNP) merchant account is where payment is not physically presented to the merchant by the consumer at the time of the transaction. |
| Merchant Account Provider | A financial institution or bank that provides a financial account to a merchant for the purpose of collecting proceeds from consumer bank account or credit card payment transactions. |
| Merchant Identification Number (MID) | This number is generated by a processor/acquirer and is specific to each individual merchant location. This number is used to identify the merchant during processing of daily transactions, rejects, adjustments, chargebacks, end-of-month processing fees, etc. |
| Merchant Processor | A company that handles or provides transaction and sometimes data processing services to merchants (and, possibly, others) |
| Merchant Support Center | Once merchants are actively processing transactions through our Internet payment gateway, our web-based Merchant Support Center logs all transaction activity so merchants can review transaction details, process batch payments, run voids and captures, and perform statistical analysis |
| MICR | Magnetic Ink Character Recognition |
| MICR Line | Numbers printed in magnetic ink near the bottom on the front of a check to facilitate automated processing. These numbers identify the financial institution on which the check is drawn, the account at that institution, the amount of the check and other identifying information. The position and content of the MICR line are governed by industry standards |
| Micropayment | |
| Mobile Banking | |
| Mobile Payments | |
| Money Laundering | |
| Money Transmitter | |
| MOTO (or MO/TO) | Mail Order/Telephone Order. |
| Multilateral Netting | Multilateral netting is an arrangement among three or more parties to net their obligations. In settlement systems of this type transfers are irrevocable, but are only final after the completion of end-of-day-settlement |
| NACHA | The national trade association for electronic payment associations, which establishes the rules, industry standards and procedures governing the exchange of commercial ACH payments by depository financial institutions |
| NACS | National Association for Check Safekeeping |
| NAFCU | National Association of Federal Credit Unions |
| NCN | National Check Network |
| Near-Field Communications (NFC) | |
| Net settlement | A transfer of funds between parties in cash, negotiable items or on the books of a mutual depository (e.g., the Federal Reserve Bank), to complete one or more prior transactions and made subject to final accounting |
| Neural Network | |
| No Preset Spending Limit | No Preset Spending Limit rewards consumers who have established a good credit history. The card's spending limit is not predetermined. Instead, it is set by the card's issuer, based on account history, spending patterns, payment history and other personal variables |
| Non-Qualified Transaction Fees (NON-Qual) | Bankcard sales transactions that do not meet set Visa/MasterCard criteria for that particular merchant and are processed at a higher interchange rate. An example of this is a merchant that is retail (card present) that processes a card-not-present transaction (or manually enters card data rather than swiping the magnetic stripe through the terminal). The merchant will pay the difference between what they should have paid on retail and what they actually qualified for (card not present). This difference is called non-qualified interchange fees. |
| Notification of Change (NOC) | Notification to a merchant from a receiver's bank indicating that bank account information provided with a specific transaction was incorrect and includes correct information. |
| NSF | |
| ODFI | See: Originating Depository Financial Institution |
| Office of the Comptroller of the Currency (OCC) | |
| Offline Debit | |
| Off-premise ATM | |
| Online Banking | Online systems allow customers to plug into a host of banking services from a personal computer by connecting with the bank's computers over the Internet. |
| Online Debit | |
| Open Financial Exchange (OFX) | A standard for the exchange of financial data and instructions independent of a particular network technology or computing platform. Major financial institutions and service providers, enabling electronic exchange of financial data between their customers and themselves, currently implement OFX |
| Open Loop | |
| Operating Rules | |
| Originating Depository Financial Institution (ODFI) | An ACH term for the bank that delivers an ACH file to the ACH Network. The ODFI submits the transaction on behalf of its customer, the Originator. |
| Originator | An organization or company that produces an ACH file and delivers it to an ODFI for introduction into the ACH Network. |
| Overdraft | When the amount of a paid check or other withdrawal exceeds the available balance in a checking account (can result in fees). |
| Overdraft Fee | |
| P2P | |
| Participating Depository Financial Institution | Any DFI that is authorized by the ACH operator to originate or receive ACH entries. |
| Patriot Act | |
| Payee Verification | Payee verification is an enhanced security option that expands on Positive Pay software. By verifying the payee name matches the initial Positive Pay report, payee verification ensures payee information has not been altered and reduces the chance of check fraud and loss |
| Payer Authentication | A means of verifying the identity of a cardholder that is making an online purchase. Payer Authentication products, such as PPI BuyerAuth, implement credit card vendor verification technology, such as MasterCard SecureCode, Verified by Visa, and JCB J/Secure. Merchants using payer authentication are guaranteed payment on authenticated transactions. Payer authentication reduces fraud related losses, such as chargebacks |
| Payment | A transfer of value. |
| Payment Authorizations/Instructions | Instructions for routing/posting the payment (e.g. into which bank account payments should be deposited). |
| Payment Card Industry Data Security Standard | A set of security requirements for the safeguarding of cardholder data in the payments industry. The PCI Data Security Standard consists of 12 main requirements and other sub-requirements that must be followed by merchants and service providers that store, process or transmit credit card information |
| Payment Cartridge | A payment solution that provides integrated credit card processing to shopping carts and enterprise applications. |
| Payment Concentration | The process that takes payments from multiple banks and payment networks and consolidates them into one bank |
| Payment Disputes | Disagreement between financial institutions or within the payment network. |
| Payment Gateway | Payment Gateway companies help other Processors conduct secure business on the internet using Secure Socket Layer (SSL) technology. They provide a system that passes credit card data, authorization requests, and authorization responses over the Internet using encryption technology |
| Payment System | A method used to facilitate and process payment. |
| Payments Gateway | A system of technologies and processes that allow merchants to electronically submit payment transactions to the payment processing networks (i.e., the Credit Card Interchange and the ACH network). Payments Gateways also provide merchants with transaction management, reporting and billing services |
| Payroll Card | |
| PCI-DSS | See Payment Card Industry-Data Security Standard |
| Personal Consumption Expenditures (PCE) | |
| Personal Identification Number (PIN) | A code used to authenticate an account holder. |
| PFM | Personal Finance Management or Manager - sometimes used to refer to Intuit's Quicken, Microsoft's Money software, etc |
| PIN | See Personal Identification Number |
| PIN-less Debit | |
| Point of Sale (POS) | Where the purchase occurs |
| Point-of-Sale (POS) Network | A network of banks, debit cardholders, and merchants that permit consumers to electronically make direct payment at the place of purchase. The funds transfer directly from the account of the cardholder to the account of the merchant |
| POP entry | An ACH debit entry initiated by an Originator pursuant to (1) a single entry authorization, and (2) a source document as set forth in subsection 3.7.1 (Source Documents), provided to the Originator by the Receiver at the point-of-purchase to effect a transfer of funds from a Consumer Account of the Receiver. This type of entry may only be used for non-recurring, in-person (i.e., at the point-of-purchase) entries for which there is no standing authorization with the Originator for the origination of ACH entries to the Receiver's account. POP is a Standard Entry Class Code |
| POS | See Point of Sale |
| Positive Pay | Positive Pay is a check matching service used by financial institutions to detect and prevent fraud. Businesses provide their financial institution a report of all checks issued, including date, amount and check number. When the issued checks are deposited or cashed, the financial institution compares deposit information to the initial report, and alerts the business of discrepancies. The business that issued the check must approve or deny the payment before the check can clear |
| Posting | The process of recording debits and credits to account balances. |
| PPD entry | An ACH credit or debit entry (other than an MTE or POS entry) initiated by an organization pursuant to a standing or a single entry authorization from a Receiver to effect a transfer of funds to or from a consumer account of the Receiver. PPD Credits are most often used for direct deposit of payroll. PPD Debits are most often used for recurring bill payments, such as insurance premiums. |
| Prenote (Prenotification) | A zero dollar ACH entry notifying an RDFI that an Originator will send one or more entries to a Receiver's account. |
| Prepaid Card | |
| Presenting Bank | |
| Private Label Card | |
| Processor | A general term with various meanings depending on the payment system. In card payments, a processor normally handles transaction processing on behalf of either an issuing or acquiring bank. |
| Procurement Card | |
| Promotional Financing | |
| Pull Payment | |
| Purchasing Card | A payment mechanism used by employee/cardholders to obtain goods and services needed at the company. |
| Push Payment | |
| Random Deposit | |
| RCK | Re-presented Check |
| RDFI | See: Receiving Depository Financial Institution |
| Real-time | The processing of instructions on an individual basis at the time they are received rather than at some later time. |
| Real-Time Gross Settlement (RTGS) System | A category of payments system. A system is said to operate in real-time if each payment is processed as it is initiated--which provides immediate finality--rather than in batch. This serves to reduce Herstatt Risk. Gross settlement refers to the settlement of each transfer individually rather than netting. Fedwire uses a real-time gross settlement system. |
| Real-Time Processing | Real-Time Processing means that when a web site's customer conducts an online purchase, that the check or credit card information is conveyed to the Processor at that exact time so that an authorization can be requested and received at that moment. Real-Time Processing always implies that a Secure Payment Gateway is being utilized, whether proprietary or third party |
| Receiver | An individual, corporation or other entity who has authorized a company or an Originator to initiate a credit or debit entry to a transaction account held at an RDFI |
| Receiving Depository Financial Institution (RDFI) | A financial institution that receives ACH entries directly, or indirectly through a third party, from an ACH Operator |
| Recurring Payments | Payments that occur at set intervals. |
| Regional Payments Association | An organization formed by DFIs to regulate and support the exchange of electronic transactions. |
| Regulation CC | The regulation published by the Federal Reserve Board to implement the law which mandates the time limits for funds availability on deposited items. |
| Regulation E | The regulation published by the Federal Reserve Board to implement the Electronic Fund Transfer Act mandating consumer rights and obligations with regard to electronic fund transfers. |
| Regulation J | |
| Regulation Z | |
| Reload | |
| Remittance | |
| Remittance DataInformation supplied along with a payment describing what the payment is for. Used both in consumer bill payment and in B2B trade payments. | |
| Remote Deposit Capture (RDC) | |
| Reserve Account | A non-interest earning balance that depository institutions maintain with the Federal Reserve Bank or with a correspondent bank to satisfy the Fed's reserve requirements. Reserve account balances play a central role in the exchange of funds between depository institutions. |
| Reserve Requirements | The percentage of deposits that a bank or other depository institution may not lend out or invest and must hold either as vault cash or on deposit at a Federal Reserve Bank. Reserve requirements affect the potential of the banking system to create transaction deposits. |
| Retailer/Merchant | An individual or company that sells goods or commodities to consumers, including those who accept payments at manned bill payment locations (usually referred to as billers) |
| Return Processing | The process of returning and settling funds for checks (demand instruments) that were dishonored by the RDFI (Paying Bank) and returned to the ODFI (Bank of First Deposit). |
| Returned Item | An ACH entry that has been rejected by a RDFI because it cannot be posted (i.e. account closed, no account, NSF, etc.) |
| Returns | Any entry that cannot be processed and is being returned by the RDFI to the ODFI for correction or reinitiation. |
| Reversals | An ACH entry or file sent with required deadlines to correct or reverse a previously originated duplicate or erroneous entry or file |
| Rewards Card | |
| Rewards Program | A point accumulating program based on purchases or transactions made on your card. These points can be redeemed for the particular program you enrolled in (e.g. airline, gasoline, etc.) Rewards programs may be offered by merchants, by banks, or by third parties. Rewards programs are most typically tied to a single payment instrument. |
| RFID | |
| Routing Number Administrative Board | The cross-industry board sponsored by the American Bankers Association which defines and administers all policies regarding routing/transit numbers. |
| Routing/Transit Number | Also known as Routing Number, Transit/Routing Number and ABA number. A nine digit number (eight digits plus a check digit) which identifies a specific financial institution. Routing numbers are administered by the Routing Number Administrative Board under the sponsorship of the American Bankers Association and officially maintained and published by Thomson Financial Publishing |
| Secure Vault Payments (SVP) | |
| Secured Cards | Secured cards are for those with little or no credit history. This type of card requires that a security deposit be made in order to establish a credit line. Your credit line will typically be equal to the amount of your deposit. |
| Security Printing | |
| Seller | A biller or vendor. An entity providing product or services. |
| Seller Direct | EIPP model connecting one seller to many buyers. Buyers connect to the seller's site to view invoices. |
| Sending Point | A processing site that sends entries to an ACH operator on behalf of an ODFI. |
| Settlement | The final step in the transfer of ownership involving the physical exchange of securities or payment. In a banking transaction, settlement in the process of recording the debit and credit positions of the parties involved in a transfer of funds; in a financial instrument transaction, settlement includes both the transfer of securities by the seller and the payment by the buyer. Settlements can be "gross" or "net." Gross settlement means each transaction is settled individually. Net settlement means that parties exchanging payments will offset mutual obligations to deliver identical items, at a specified time, after which only one net amount of each item is exchanged |
| Settlement date | The date on which the parties to a transaction agree that settlement is to take place. |
| Signature Debit | |
| Similarly Authenticated | An authentication standard that allows written and signed authorizations to be obtained in electronic form. To meet the requirement of "in writing," an electronic authorization must be viewable on a computer screen or other display method that will allow the consumer to be able to ready the authorization |
| Single Message | |
| Smart Card | A card with a computer chip that may be used to authenticate the user, store value, or provide other functions. |
| SMS | |
| Standard Entry Class (SEC) Code | A three-letter code that uniquely identifies the class of ACH transaction. For example, "POP" stands for "Point of Purchase" |
| Statement/Notice | An electronic or paper document sent to a customer/agent that does not have a payment due associated with it. |
| Surcharge | |
| SWIFT | The Society for Worldwide Interbank Financial Telecommunication - an international bank funds transfer and messaging system |
| TEL | A single-entry ACH debit initiated by an Originator pursuant to an oral authorization obtained over the telephone to effect a transfer of funds from a consumer account of the Receiver |
| Terminal | |
| Terminal Identification Number (TID) | A unique number assigned to each point-of-sale or virtual terminal. |
| Thick Consolidation | For bill presentment, a type of third party consolidation where both the bill summary and bill detail are available on the consolidator's web server. |
| Thin Consolidation | For bill presentment, a type of third party consolidation where the bill summary is available at the consolidator's web server and the bill detail is available at the Biller's web server. |
| Third Party Processor | A party which processes ACH files and/or items on behalf of one of the participants in the ACH system. Examples of third party processors are payroll processing companies which create ACH files for transmission to the ACH Operators on behalf of an originator or ODFI, a data processing company which receives incoming ACH files and processes them for an RDFI, or a correspondent bank which processes ACH files for its correspondents |
| Transit Routing Number | See Routing/Transit Number |
| Travel & Entertainment Card ("T&E") | Type of Corporate Card. |
| TRC (Truncated (Check) Entry) | An ACH entry which originally represented a check, in which the actual check is safekept by one of the financial institutions in the chain of deposit and the MICR information is converted to an electronic entry and processed through the ACH network back to the issuing institution |
| Truncation | See Check Truncation. |
| TRX (Truncated (Extended) (Check) Entry) | A series of TRC entries put together as addenda records with the payment item representing the total settlement of the TRC entries for that batch. TRC is a Standard Entry Class Code |
| UN/EDIFACT | The United Nation's body that sets and administers international standards for Electronic Data Interchange usage. |
| Unbanked | |
| Uniform Commercial Code | The body of law governing commercial transactions in the United States |
| Uniform Commercial Code (UCC) Article 3,4, 4A | Article 4A covers certain funds transfers, including ACH credit transactions not subject to the Electronic Funds Transfer Act. |
| UPIC (Universal Payment Identification Code) | A substitute bank routing number and account number used with ACH payments. Allows receivers of ACH payments to provide originators with a number other than their "real" bank account. The ACH operator maps the UPIC to the "real" number. |
| Velocity Monitoring | |
| Verified by VISA (VBV) | VBV enabled credit cards have a unique password associated with them to provide additional on-line fraud protection. Visa's implementation of payer authentication similar to MasterCard SecureCode and JCB J/Secure. |
| Virtual Card | |
| Virtual Terminal | A Web-based credit terminal that performs the same processing functions as a physical point-of-sale terminal. A merchant logs on to a secure web page, enters credit card information into a Web form, and submits the transaction data for processing. PPI's VirtualPay and VirtualPay POS are virtual terminals. |
| Visa ePay | Electronic payment network for commercial payments |
| Void | A charge type that cancels a previous transaction. That transaction will not appear on the buyer's credit card bill. |
| Warehousing | The ability of an ODFI to receive a file from an originator prior to the Effective Entry Date and hold it for release to the ACH operator or for a RDFI to receive entries ahead of the Settlement Date and hold them without posting until the Settlement Date. |
| Web | An ACH debit entry initiated by an Originator pursuant to an authorization that is obtained from the Receiver via the Internet to effect a transfer of funds from a consumer account of the Receiver. |
| Wholesale Payments | Large-value payments used primarily in the financial markets. |
| XCK entry | A debit entry initiated in the event an item eligible for section 2.7 (Destroyed Check Entries) is contained within a cash letter that is lost, destroyed, or otherwise unavailable to and cannot be obtained by an ODFI. XCK is a Standard Entry Class Code. |
| XML | Extensible MarkUp Language |
| Zero Liability | Policy of some card networks that protects consumers so that they pay only for purchases which they have authorized |
Other Payments-related Glossaries
Below are some other glossaries on the web related to payments that you might find helpful:
- Bank for International Settlements - Glossary of Terms Used in Payment and Settlement Systems
- Federal Reserve Bank of New York - Payments Glossary
- MasterCard Brand Center - Glossary
- MasterCard CreditWise Glossary
- Payments Glossary - Anne & Lynn Wheeler
- Visa Merchant Glossary of Terms
- Wells Fargo Bank - Credit Card Glossary
