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Glossary of Terms
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| Although we maintain the currency of our glossary, some of the terms and definitions presented below are subject to expiration or change due to the evolving nature of the industry. |
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ABAAmerican Bankers Association. See Routing/Transit Number.
ACBAmerica's Community Bankers.
ACCUAssociation of Corporate Credit Unions.
ACHAutomated Clearing House.
ACH NetworkFunds transfer system governed by the Rules of the National Automated Clearing House Association that provides for the interbank clearing of electronic entries for participating financial institutions.
AcquirerAn Acquirer is a Visa / MasterCard Affiliated Bank or Bank/Processor alliance that is in the business of processing credit card transactions for businesses and is always Acquiring new merchants.
Acquiring Financial InstitutionAn acquiring financial institution (or "acquirer") contracts with the bank and merchants to enable credit card transactions. The acquirer deposits the daily credit card totals and debits the end-of-month processing fees from the merchants' accounts.
Address Verification Service (AVS)The process of validating a cardholder's given address against the issuer's records, to determine accuracy and deter fraud. This service is provided as part of a credit card authorization for mail order/telephone order transactions. A code is returned with the authorization result that indicates the level of accuracy of the address match and helps secure the most favorable interchange rates.
AdjustmentAn adjustment is initiated by the acquirer to correct a processing error. The error could be a duplication of a transaction or the result of a cardholder dispute. The acquirer debits or credits the merchant DDA account for the dollar amount of the adjustment.
AffidavitA sworn statement by a consumer declaring that a particular ACH transaction was unauthorized or that the authorization for that transaction has been revoked.
Audio Response Unit (ARU)An electronic authorization and capture product where the merchant uses a touch-tone telephone to process transactions.
AuthenticationA data security technique used to ensure that the professed sender of information or a payment order is actually who they claim to be.
Authorization (Credit Card)The process of verifying the credit card has sufficient funds (credit) available to cover the amount of the transaction. An authorization is obtained for every sale. An approval response in the form of a code sent to a merchant's POS equipment (usually a terminal) from a card issuing financial institution that verifies availability of credit or funds in the cardholder account to make the purchase. Also see Point-Of-Sale.
Authorization (Check Card)An agreement by a Receiver to allow for the posting of debit or credit items to their account. Authorizations for credit transactions may be orally given, but debit transactions must be authorized in writing or similarly authenticated by other means (for example, by digital signature or PIN if by computer).
Authorization ResponseAn issuing financial institution's electronic message reply to an authorization request, which may include: Approval (transaction was approved), Decline (transaction was not approved), Call Center (response pending more information, merchant must call the toll-free authorization phone number).
Authorization CodeA code that a credit card issuing bank returns in an electronic message to the merchant's POS equipment that indicates approval of the transaction. The code serves as proof of authorization.
Authorizing CustomerThe checkwriter, who has the legal authority to sign checks on the account shown on the check - and to sign an authorization for electronic payment.
Auto CloseA terminal feature that allows an end-of-day batch closing to occur automatically at a specified time, without having to be initiated by the merchant.
Automated Clearing House (ACH) FileA file with instructions for the exchange and settlement of electronic payments passed between financial institutions. It represents debits and credits to be deducted from an account automatically as they occur.
Average Ticket (Average Sale)The average dollar amount of a merchant's typical sale. The average ticket amount is calculated by dividing the total sales volume by the total number of sales for the specified time period.
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