M

MCC: The abbreviation for a Merchant Category Code.

MICR Number Method: A common method for authorizing checks through electronic payment systems. The MICR number method uses a bank’s routing number, an account number and a check number for authorization. MICR is popular because it uses the information found at the bottom of any check, so it’s a convenient authorization procedure for consumers.

Magnetic Information Character Recognition (MICR): Imprinted banking numbers (routing/transit number, checking account number, and check number) at the bottom of the check.

Magnetic Stripe: The stripe on a bankcard which holds all of the information of a cardholder’s account via a magnetic charge. Magnetic stripes are affixed to most bankcards.

Mail Order/Telephone Order (MO/TO): A term used to describe the catalog and direct mail industry. See “Direct Marketing”.

Media: In the STAR Network, “media” refers to documentation of transactions, including but not limited to credit slips and sales drafts.

Member: Generally used to refer to a financial institution with a membership in MasterCard International or Visa. Members are able to issue cards and can accept drafts from merchants.

Merchandise Returns/Refunds: A cardholder’s request for a refund on merchandise. This can either refer to a partial or a full refund, which may be due to the cardholder as a part of a return policy or for another valid reason. However, merchandise refers are not an accepted electronic STAR transaction. Non-electronic means must be used to ask for merchandise refunds. STAR merchants are required to handle Internet and non-Internet merchandise returns or refunds in the same manner.

Merchant: An organization or person which agrees to accept debit and credit cards. This agreement must be pursuant to the rules of a merchant agreement.

Merchant Account Initiation (MAI): A management system for credit information. Includes various types of information about cardholders, including credit scores, account tracking, profitability analyses, credit files and even reviews of merchant applications.

Merchant Acquirer: Another term for an acquiring bank. A merchant acquirer is a member that has agreed with a merchant to accept bankcard transaction deposits.

Merchant Agreement: A written agreement between an acquirer and a merchant. The merchant agreement explains rights, liabilities, responsibilities and any explicit warranties.

Merchant Category Code (MCC): Also known as a merchant classification code. Identifies the type of processing, settlement and authorization handled by a particular merchant.

Merchant Fraud: Submitting sales drafts which aren’t the result of actual sales for the purpose of defrauding a bank or a cardholder. Knowingly accepting invalid cards, including lost and stolen cards, is also an instance of merchant fraud.

Merchant Number: A number used by merchant processors for the purpose of identifying merchants, typically during accounting or billing.

Merchant Outlet: The physical location where a transaction is initiated with a customer.

Merchant Sales Agreement: A contract between CreditCardProcessing.com, a member bank and a merchant with information on rights, duties and warranties for bankcard and payment system processing. The merchant sales agreement must be approved by all involved parties.

Merchant Service Charge: Fees assessed by the account acquirer, including the discount rate. See “Discount Rate” for more information.

Merchant Settlement Amount: The sum of the credit and debit card transactions processed by a merchant in a day. Chargebacks and other debits or credits may change this amount.

Merchant Station Plate: Used by an imprinter machine for imprinting individual batch headers, summaries and sales slips. A merchant station plate is a piece of embossed metal which includes vital information including the merchant name and account number which is used in identifying the merchant. Merchant station plates are colloquially known as “slugs.”

Merchant Store and Forward Transactions: Transactions in the STAR system which cannot be processed for a variety of technical reasons, including technical limitations. These transactions are stored for later processing in a point of sale system.

Merged Member: A member which attained membership due to one of the following:

  1. >Consolidation with an existing member or a merger.
  2. >The purchase of a depository financial institution by an existing member.
  3. >The purchase of an existing member by the depository financial institution.

Message Authentication Code (MAC): A system for encrypting digital messages by use of an encryption algorithm and a unique secret key creates a message authentication code or an MAC. The MAC is sent to a customer or merchant who can use the security key to access the data in the message and to ensure a proper degree of message security via the use of encryption technology. See “encryption” for more information.