ACH A form of electronic payment. Automated Clearing House is typically used to process high volumes of relatively small-dollar payments for settlement within one or two business days. ACH transactions are settled in a manner similar to the way checks are settled: The clearinghouse takes all ACH files received daily from its member banks, sorts them on the storage shelving system by the originating bank (the bank where the check was cashed or deposited) and the paying bank (the bank against which the check was drawn), totals the accounts, and credits or debits appropriate accounts accordingly. Address Verification Service (AVS) Fee Allows you to run AVS on all transactions to check the billing information that was provided to the information on file with the credit card company. This helps to fight against charge backs and fraudulent orders. Depending on which merchant provider you choose, there might be an extra fee per transaction for this service. Acquiring BankA financial institution that contracts with merchants to settle electronic transactions. The acquiring bank provides the merchant with its credit card processing account. This acquiring bank sends credit card and purchase information from transactions to a credit card association (such as Visa and MasterCard), which forwards it to the issuing bank. Authorization The process by which an issuing bank approves the availability of funds for a credit card transaction for a specific amount. Bankcard Association The Visa and MasterCard associations. Batch A collection of transactions that have been made in a single day. Most terminals and real-time processors will collect all of the transactions and then do a batch at the end of day, instead of batching them throughout the day. Capture The submission of credit card transaction to be processed by the merchant provider or merchant account holder. This is used to check the funds availability on the credit card submitted. Chargeback A payment dispute initiated by the cardholder with their credit card issuing bank. The amount of the disputed transaction is immediately withdrawn from the merchant’s bank account, and the merchant can dispute the chargeback with proof of purchase, signature, proof of delivery, etc. A chargeback fee is usually assessed to the merchant on top of the actual transaction. A chargeback is usually generated when a cardholder disputes a transaction because of one of the following criteria: non fulfillment of product or service, un-authorized purchase, product/service expectations not met. **When a chargeback is generated, the issuing and acquiring banks must research the facts to determine which party is responsible for the transaction. ** Digital Certificate A digital certificate is an encrypted electronic document that verifies the authenticity of a service provider or vendor of a product. Prices vary from $49 to $900 per year. Installation of a key with a valid certificate is a prerequisite to SSL Digital Keys Keys are paired codes used to encrypt data in communication streams. One part of the key is kept private on the shelving storage, while the other is transmitted to the web browser. Web browsers encrypt the data using the public portion of the key and the private portion is used for decrypting. The process is called public key encryption and is used in the SSL mechanism. Discount Rate This is the fee that is charged to a merchant by Visa, MasterCard, Discover and American Express, for processing their credit card transactions. Encryption The process of obscuring information by modifying it according to a mathematical function known only to the internet recipient. Encryption is used to secure information being transmitted over non-secure or untrusted media. E-Commerce This pertains to doing business online and making transactions, sales, refunds and selling online. This pertains to any online sales, and the way businesses communicate and grow. Gateway Processor Most of the smaller merchant providers resell some other Gateway Processor, which is the company that does all the charging on your customer’s accounts. Interchange Rate The rate that is set and charged by the bankcard association to the acquiring banks for the transaction. The interchange rate, which is actually a percentage of the transaction amount, also helps account for authorization costs, fraud and the general or average banks cost of funds. Internet Gateway (Payment Gateway) A Gateway Payment Connection is a secure web server that provides an interface for merchant websites that require real-time transaction processing.