Below are some common terms you’ll run across
as a merchant dealing with payments processing.

3DS:

Acronym for “Three Domains Secure”. 3DS is an authentication process where three “domains” (hence 3D) are involved in authorizing a transaction. Those domains are the issuing bank, the acquiring bank, and an “interpolarity” domain, that handles communications between merchant, issuer and acquirer.

acquirer:

(AKA “acquiring bank”) The merchant’s bank that receives the money from a transaction.

Agent:

Agents are subcontracted by ISOs or MSPs to connect merchants with the card association they resell for.

chargeback:

A reversal of charges by an issuing bank resulting from cardholder complaint, fraud, or processing error.

chargeback ratio:

The percentage of transactions that become chargebacks within a specified period of time, used by Visa, MasterCard and other card associations and banks to determine if a merchant is processing too much fraud. As a general rule, this threshold is at or below 1%.

compelling evidence:

The evidence required in representment cases submitted by a merchant that is sufficient enough to reverse a chargeback. This includes transaction data, delivery confirmations, and cardholder interactions with the merchant. Any evidence that ties a cardholder to a transaction.

decline:

When a transaction is invalidated because the information provided can not be authenticated or it triggers processing security measures.

EMV:

Acronym for “EuroPay, MasterCard and Visa” which together created the standard for “smart card” technology.

false decline:

(AKA false positive) When a legitimate transaction was incorrectly declined.

false positive:

(AKA false decline) When a legitimate transaction was incorrectly declined.

friendly fraud:

When a cardholder tries to get money back from a purchase that they made, claiming the transaction was fraudulent.

gateway:

The point of sale where a cardholder enters their credit card and other personal information required to process a transaction.

ISO:

Acronym for “Independent Sales Organizations”. ISOs are contracted by VISA to connect merchants with their services.

issuer:

(AKA “issuing bank”) The bank that has issued the card that a cardholder uses to purchase goods/services from a merchant.

MDR:

Acronym for “Merchant Discount Rate”. The rate that a merchant is charged per transaction.

merchant account:

A bank account which the merchant holds with an acquiring bank to process credit card transactions.

MID:

Acronym for “Merchant Identification Number”. The number that identifies a merchant account, MID is now used as a shorthand for a merchant account.

MSP:

Acronym for “Member Service Providers”. MSPs are contracted by MasterCard to connect merchants with their services.

paywall:

The divide between free, publicly accessible content and the area users must pay to access on a website.

PCI:

Acronym for “Payment Card Industry Association”. The PCI is the trade group of major card companies American Express, Discover, JCB, MasterCard and Visa.

presentment:

The request made by an acquiring bank to an issuing bank to retrieve funds that pay for a transaction.

representment:

When a merchant or their acquirer re-submit their request for funds from a cardholder after the initial transaction was charged back

rolling reserve:

Usually 5-10% of a merchant’s monthly sales that are witheld by an acquirer to cover costs stemming from chargebacks.

ticket size:

The average dollar amount of a merchant’s transactions.

TID:

Acronym for “Terminal Identification Number”. The number that identifies a specific terminal that has processed a transaction.

user logs:

A form of compelling evidence, user logs track how a customer logs in and navigates behind a merchant’s paywall.

VMPI:

Acronym for “VISA Merchant Purchase Inquiry”. A component of the VCR, the VMPI is an automated platform VISA provides issuing banks with to send transaction data to merchants in cardholder disputes. It is intended as a preemptive means to resolve disputes before they become chargebacks.

VROL:

Acronym for “VISA Resolve Online”. This is VISA’s proprietary online infrastructure for resolving cardholder disputes. VROL enables merchants and issuers to exchange transaction data to facilitate dispute resolution.

Find out: How We Can Protect Your Processing.

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