ABA Routing Number: A bank’s routing number is a unique code that identifies the bank institution and allows for electronic deposits and withdrawals. Routing numbers are known as either ABA or transit routing numbers; there is no difference between the two terms.
ACH: The organization used by banks to transfer funds electronically. ACH stands for Automated Clearing House.
ACH Network: The network of banks connected to an Automated Clearing House organization. Banks in an ACH network can transfer funds electronically between members with the proper authorization.
ACH Operator: A facility used by an ACH network to transfer funds electronically. An ACH operator receives and transmits commands for ACH withdrawals and deposits for its participating banks and credit unions.
AMEX: The official abbreviation for American Express.
AVS: An address verification system.
Acceptable Indorsement/Endorsement: An endorsement on a check or other financial document that is acceptable to a banking institution. Acceptable endorsements include blank, special and restrictive endorsements. Checks payable to a business or organization may also have a business stamp rather than a traditional endorsement. The spellings “endorsement” and “endorsement” are equivalent, and banks or financial documents may reference either spelling when referring to an acceptable endorsement.
Access Account: A checking, NOW, savings, or other depository account maintained by a member. The Access Account may be used for deposits and withdrawals of funds. An Access Account may be a single-access depository account or a pooled account owned by a member and accessed via SVCs (Stored Value Cards).
Account: Accounts are legally defined by the Board of Governors of the Federal Reserve System in Section 229.2(a) of Regulation CC.
Account Authorization System: Another term for “Issuer Authorization System”. See that term for more information.
Account Holding Member: A member who holds ownership of an access account for the purposes of performing transactions, including debit and electronic transactions. Account holding members are able to use authentication tokens.
Account Number: The account number is used along with a routing number for account transactions. Each account number is unique within the bank where the account is held.
Acquirer: Visa and MasterCard use acquirers to maintain merchant relationships. The acquirer receives all bankcard transactions and processes them into the interchange system for transfers. Acquirers are licensed through Visa or MasterCard.
Acquirer Member: A member that initiates transactions and operates terminals. Acquirer members may own, control or sponsor terminals and Internet merchants. Acquirer members and interbank sending members are treated similarly under terminal guidelines for operation and are subject to the same rules.
Acquirer Zone: The Acquirer Zone includes all terminals, switches and other processing points used in transactions.
Acquiring Bank/Merchant Bank: A banking institution that allows for debit and credit card processing for a merchant. Credit card sales are submitted to the acquiring bank each day by the merchant. The acquiring bank then buys the sales from the merchant, which enables a deposit to the merchant’s account equal to the total merchant’s account sales.
Acquiring Processor: The processor provides credit card processing, billing, reporting and settlement and operational services to the acquirer. Many financial institutions hire a third party for more cost-effective bankcard processing.
Address Verification (AVS): An anti-fraud service which verifies the address of a cardholder before a transaction. While AVS doesn’t guarantee validity to transactions, it cuts down on card theft and improves the chances of a successful transaction. AVS services are usually enacted through online sales and through telephone sales.
Adjustment: An adjustment is made to correct a processing error, usually when a customer is overcharged or undercharged. Adjustments are said to correct “exception items,” which are simply processing errors which can be legally changed or reversed in accordance with transaction rules.
Affiliate: A bank or an individual who directly or indirectly exerts control along with another bank or individual.
Affiliated Retailer: Any retailer (meaning an organization or person) that is controlled by, or is under common control with, a STAR merchant. An affiliated retailer can also be franchised with a STAR merchant. Affiliated retailers generally have direct power or voting power over the merchant’s policies and management, although this is not necessarily the case with franchises.
Affinity Card: A special type of credit card or in rare instances, a debit card, which is issued to members of an organization, usually for a royalty or fee. Affinity cards might be issued to alumni organizations, trade organizations or other similar groups.
Altered Card: A credit or debit card which has been altered illegally for the purpose of fraud. Various fraudulent methods are used to create an altered card, including but not limited to manipulation of the card’s encoded info.
ANSI: An abbreviation for the American National Standards Institute.
ANSI Prefix: A synonym for PAN prefix; see that term for more information.
Approval or Approved: An approved authorization request from an issuer member. See “issuer member” for more information.
Approved Auditor: An auditor approved by STAR for internal or external auditing services. An approved auditor has professional certification as a Certified Public Account, Certified Bank Auditor, Certified Internal Auditor or a Certified Systems Auditor or some combination of these. An approved auditor also needs to meet security requirements. This is usually accomplished by the successful completion of ANS X9.24 and ANS X9.8 training programs. Education requirements are ongoing and must be completed within two years of a security compliance review or within a calendar year.
Arbitration: The process used in chargebacks to determine the validity of a claim and to resolve a dispute.
Assessments: Operating and marketing fees that are assessed by a credit card company to members. These fees are usually paid quarterly.
Association: Associations are proprietary or principal members of a credit card company such as MasterCard or Visa. Associations find processing services for their members and are owned by their members.
ATM Interchange Fee: A fee established by the STAR network, paid by an issuer member to an acquirer member for each ATM transaction. This fee may change occasionally.
ATM System: All parts of the STAR processing system from an ATM or POB to a STAR switch. An ATM system is both a processing and telecommunications system. Operation is initiated by an acquirer member through POB and ATM terminals.
Authentication: An identity verification process which allows authentication tokens to be used. Authentication validates a STAR account holder’s identity and is a necessary security process.
Authentication Programs: Programs that verify the identity of an account holder during STAR Internet transactions. Authentication programs use the appropriate authentication tokens for the type of transaction. For example, in an eSign authentication program, an account holding member would have to verify a transaction with a secret phrase or number. Several authentication programs are available for different types of transactions to reduce fraud and ensure proper account holder identification.
Authentication Token: A number, phrase or string of data that is secret to an account holder. Tokens are used to verify an account holder’s identity prior to a transaction or before account management is allowed. The STAR Network must approve all methods of creating or choosing authentication tokens in order to meet security protocols. Authentication tokens might consist of a PIN number, a set phrase or information about the account holder. Most authentication tokens are secrets, although bill payment programs may use account numbers and other non-secret tools as authentication tokens.
Authenticator: A company, organization, individual or other entity that provides verification services by analyzing and/or issuing authentication tokens. An authenticator varies depending on the authentication program being used. For instance, in a retail ID authentication program, the authenticator would be the account holding member. In an eSign authentication program, the authenticator would be a third party acting in the place of an account holder. Other authorization programs may have different defined authenticators.
Authorization: Not to be confused with authentication, authorization ensures that the card holder has adequate credit or adequate funds for a transaction. After an authorization takes place, funds are subtracted from the cardholder’s account or the cardholder’s available credit limit is reduced.
Authorization Approval Code: A number created by an issuer for each transaction and included on a merchant sales draft. The authorization approval code proves that the sale has been adequately authorized.
Authorization Center: CreditCardProcessing.com uses an authorization center to send a request for a transaction authorization to the banking institution of the cardholder. This authorization is transmitted electronically, allowing for easy, fast electronic authorization for a merchant.
Authorization Request: An official request for a transaction. Authorization requests can be sent by any approved entity, including processors, merchants and Internet merchants. Requests are relayed to issuer members, at which point they’re either approved or denied.
Authorization Representment: An automatically resolved dispute. Chargebacks can be resolved through representation by the FDC on the part of any merchant, and the merchant may never be aware of the intervention.
Automated Bill Payment: The process of crediting funds from a customer to a company to pay a bill, which can be managed automatically via regularly scheduled electronic transactions.
Available Balance: The total balance available for a debit card or bank account. Available balance is occasionally but incorrectly used as a synonym for available credit.
Available Credit: The credit that a cardholder has left on an account. Available credit is calculated by subtracting a cardholder’s total outstanding balance from the cardholder’s credit limit.
Average Ticket: An important number for pricing merchant accounts, a merchant’s average ticket is an average transaction received from bankcards. In other words, it’s the average value of all of a merchant’s card transactions.