The company (typically a federally insured financial institution) responsible for connecting merchants to Visa and Mastercard authorization and settlement systems. Acquirers are one of only two entities (the other being merchant banks) that are the actual signatories to merchant agreements. To sell bankcard services, you must have a signed agreement with an acquirer and acquirer-sponsored ISO (like NAB).


The fee that is paid to Mastercard and VISA for marketing and administrative costs. This is a percentage of the sales passed through interchange.


Address Verification System (AVS) is an optional service that helps protect against credit card fraud by verifying the identity of the person claiming to own the credit card is correct. The system will check the billing address of the credit card provided by the user with the address on file at the credit card company.


An electronic exchange between a card-issuing bank and the merchant-acquiring bank, initiated through a POS terminal, confirming a cardholder has sufficient credit (or funds in a DDA if it is a PIN-based debit transaction) to cover a pending transaction.


When the merchant electronically sends their captured transactions to their acquiring bank for settlement. Batches may be opened and/or closed automatically or manually. Most terminals can be programmed to batch out automatically at a certain time each day. However, some merchants, such as those taking tips (like salons or restaurants), need to manually reconcile their tips and then manually batch their terminal to ensure accurate batches and the most advantageous cost associated with those transactions.


Bank Identification Number: a numerical code assigned to each federally insured financial institution for the routing of transactions and other purposes. ISOs and MLSs board merchants using the BINs of their respective acquiring or merchant banks.

Card Not Present

A type of transaction (for example, Internet or MOTO purchases) for which the customer’s card is not presented to the merchant at the POS. Interchange is set higher on these transactions because there is an increased risk with these types of transactions.

Card Type

Refers to the brand of card – Visa, Mastercard, Discover, Amex and what type of card – consumer credit, business, check card, rewards, etc.


A chargeback occurs when a cardholder’s bank (the card issuer) reverses all or part of a card transaction, leaving the merchant financially liable for the payment and subject to penalties – unless it can be proven the merchant was not at fault.


Card Verification Value; a value encoded on the magnetic stripe of the card. CVV is used as a security feature for transactions in person (swiped retail transactions).


Card Verification Value 2; a three or four digit number physically imprinted on the back of the card. CVV2 is used as a security feature, and often is mandatory, for card-not-present (MOTO/Internet) transactions. CVV2 data is not embedded in the magnetic stripe.


Doing Business As; the name under which a business is operating. The DBA name may or may not be the same as the corporate name.

Debit Cards

Debit cards are issued by financial institutions and tied to cardholders’ DDAs. Sometimes referred to as online debit cards, these cards carry the logo of one or more debit network and require the input of cardholder’s PIN at the point of sale.


In payment processing, a gateway is any network that connects merchant POS terminals with transaction processing and settlement networks, such as the Mastercard and Visa settlement networks. Gateways can also provide related services, including transaction management and reporting. Gateways more commonly refer to an Internet Gateway, which allow merchants to set up shopping carts or accept transactions when the card is not present.


Member Service Provider; an ISO or other company registered with a Visa or Mastercard member financial institution to sell bankcard services.


Payment Card Industry Data Security Standard; established for securing payment card information. Failure to adhere to the standard (by any party that handles card information, including merchants and ISOs) can result in substantial fines; often shortened to PCI.


Personal Identification Number; used to process PIN-based debit transactions.


The company that moves transactions on behalf of acquirers between merchants, banks, and the card networks.

Retrieval Request

When a chargeback is initiated, the merchant’s processing bank sends to the issuing bank additional information about the transaction. The Retrieval Request fee is billed to the merchant regardless of the outcome of the chargeback.


A payment card sale or refund between the cardholder and merchant.