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Automated clearing house, used by agencies for electronic funds transfer (EFT). This is a bank-to-bank payment made in the US via the ACH Network instead of the credit card interchange network . Also referred to as an ACH transfer. The ACH Network is governed by Nacha.


The acquiring merchant bank, or the bank that provides the merchant account to a merchant. The card-issuing bank pays the acquiring bank the sum of a transaction on behalf of the cardholder. Banks can be both a card-issuing bank and an acquiring bank, but they typically specialize in one or the other.

affiliate marketer

A marketing model in which a company compensates a third party to generate traffic or leads to the company's products and services. 


Authorization; this is what happens when a transaction is allowed to proceed and the customer makes their payment. This can be done with a credit card, via an online transaction, a smart phone, or any other connected device.


Bank identification number. The first four to six digits on a credit card that indicate the issuing bank; also the first 6 digits of a merchant account ID.


Card acceptor ID. Provided by the merchant's acquiring bank, this string of numbers identifies the store location or transaction point. 


When a bank places a hold on the funds needed to cover the transaction.

card verification value

Also known as CVV, this 3-to-4-digit number is used for identity verification on card-not-present transactions when a charge is in the process of being authorized.


Cash and cash equivalents. Assets that can be convereted into cash immediately.


Cardholder Dispute Resolution Network, a patented chargeback management program from Verifi. It intercepts and alerts merchants to disputes, allowing them to refund a customer's disputed charge before it becomes a chargeback.


Consumer Financial Protection Buerau, an independent bureau within the Federal Reserve System that oversees consumer financial lenders, implements and enforces Federal consumer financial law, and ensures that markets for consumer products are fair, transparent and competitive.


The reversal of charges by an issuing bank due to customer complaint, fraud, or processing error. This is the process by which a cardholder disputes a charge on their credit card, causing the card-issuing bank to refund the cardholder's transaction amount. The card-issuing bank then demands the retailer to make up the loss on the disputed charge. In the US, chargeback reversals for debit cards are governed by Regulation E of the Electronic Fund Transfer Act. Chargeback reversal for credit cards is governed by Regulation Z of the Truth in Lending Act (TILA).

chargeback ratio

The ratio of chargebacks to total transactions within a specified period of time, expressed as a percentage. As a general rule, this threshold is at or below 1%.

commercial account

Any type of bank account used by corporations and businesses. Typically a checking or other type of demand despoit account (i.e., money can be withdrawn at any time).

commercial banks

Banks that offer servies, such as accounts and credit products, to businesses.

compelling evidence

Evidence provided by a merchant to dispute a chargeback in a representment . Generally, any concrete evidence that ties a customer to a transaction.

Consumer Clarity

Ethoca's chargeback prevention tool that sends data from the merchant to the cardholder and the issuing bank to avoid chargebacks.

credit card processing

The process by which a credit card transaction is authorized or declined, followed by the payment of the transaction amount from the card issuing bank to the merchant bank. The cardholder enters their credit card information into a payment portal; the payment processor digitally sends the card and transaction information to the card network (eg., Visa, MasterCard, etc.). The card network sends that information to the bank that issued the card. The issuing bank verifies the account details and authorizes or declines the transaction. If the transaction is authorized, the issuing bank pays the merchant bank the amount of the transaction, and charges the cardholder for the amount of each transaction using a monthly statement.

cross border acquiring

Cross-border acquiring allows merchants to operate their businesses in countries other than their own by using an acquirer's card acceptance methods. It enables merchants to operate across multiple countries to centralize transactions and crad processing, allowing for a more efficient payment process. This type of acquiring allows cross-border payments — payments that occur across international lines where the payee and the transacrion recipient are in different countries.


See: Card verification value.

digital wallet

Mobile device applications that securely store a cardholder's payment information and allow cardholders to use their mobile device to pay for purchases. Examples are GooglePay and Applepay.

dispute notice

Notification sent to the merchant that there has been a consumer dispute.


Data security standards; enforceable standards for account data protection, as established by the PCI Security Standards Council . which is composed of representatives from American Express, Disclover, JCB International, Mastercard and Visa Inc. Enforcement and compliance with the standards are carried out by the individual cardholder brands and not by the PCI SSC.

earning credits

These are paid by banks on commercial accounts based upon the average account balance.

EFT error

Electronic funds error. Banks generally are allowed a period of 10 business days to investigate a reported EFT error. Banks must report the results of the investigation to the consumer.

Electonic Funds Transfer Act

Title IX of the Consumer Credit Protection Act. Passed by US Congress in 1978 in order to protect consumers engaged in electronic funds transfers. Provides a way to correct electronic transaction errors and limits the liability resulting from a lost or stolen card.

electronic payment transaction

A payment transaction that is verified, authorized and processed electronically using a series of networks that connect the merchant, the merchant acquiring bank, the cardholder network, and the card-issuing bank.


Owned by Mastercard. A chargeback alert system.

friendly fraud

When a customer fraudently tries to receive a refund for a legitmate transaction.


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

high-risk merchant

A merchant that payment processors and card networks view as being more likely to default on its payments, suffer high levels of chargebacks, or commit fraud.


Insufficient funds to cover losses.


Interchange is when the card payment transaction is passed between the merchant and the card issuing bank, between the card-issuing bank and the payment brands (Visa/MC/ect.), and between the payment brands and the card-issuing bank. (M>CIB>PB>CIB.) It is the digital network that allows electronic transactions to take place.

interchange fee

Also known as a swipe fee, it is designed to cover the costs associated with accepting, processing and authorizing transactions. Generally, an interchange fee will include a small fixed fee plus a percentage of the total sale. These fees can vary based on the type of card used by the consumer (Visa/MC/Amex/etc.), the merchant category code associated with the business making the transaction and the credit card processing service involved. The average interchange fee is between 1.5 percent and 3.5 percent of the total transaction.


Independent sales organizations. A type of merchant account provider that connects merchants with merchant acquiring banks. With ISOs, businesses apply for their own merchant account. ISOs are best-suited for businesses that have specific customer service or scalability needs, are in a high-risk industry, or have an annual transaction volume that exceeds $1 million.


Merchant Alert To Control High-Risk. Also known as the Terminated Merchants File or TMF. A list of merchants whose merchant accounts have been terminated in the last five years or have been flagged as especially high-risk. The list is compiled and maintained by Mastercard and used by acquiring banks to screen potential applicants.


Merchant category code. A four-digit number for retail financial services; used to classify a business by the types of goods or services it provides. MCCs are assigned by merchant type or by merchant name. A credit card company assigns a code to a merchant when the merchant first starts accepting that type of credit card as payment. Different credit cards may code the same business differently.


Merchant discout rate. The rate a merchant is charged per transaction.

merchant account

A merchant account is a type of business bank account that allows a business to accept and process electronic payment card transactions. Merchant accounts require a business to partner with a merchant acquiring bank who facilitates all communications in an electronic payment transaction.

merchant acquiring bank

Also known as an acquiring bank or merchant bank.


Merchant identification number. The unique number used to identify a merchant account; "MID" is used as shorthand for merchant account.


Merchant services provider.


Near-field communication. Used for contactless payments.

Order Insight

Verifi's chargeback prevention tool that sends data from the merchant to the cardholder and the issuing bank to avoid chargebacks.


Payment facilitators, also known as payment service providers. Businesses who use payment faciliatators are submerchants under a larger merchant account. Approval for this type of account provider requires a shorter underwriting process and is best for merchants who want a flexible plan and who have a transaction volume that is less than $1 million annually.

payment processor

A vendor that businesses use to manage the logistics of credit card payments and electronic transactions.

payment service provider

Examples are Square, PayPal and Stripe. Merchants who choose to use payment service providers are not required to establish a merchant account with a merchant acquiring bank. The merchant account in the transaction is the payment service provider's, and they will group several different merchants into one merchant account, thereby sharing the merchant account with multiple merchants.


Payment card industry data security standards. A set of requirements intended to ensure that all companies that process, store, or transmit credit card information maintain a secure environment. Administered by the PCI SSC (Payment Card Industry Security Standards Council).


Payment Card Industry Security Standards Council. Establishes the security standards for safegaurding data.


Payment processor. A third party used by merchants to manage the credit card transaction process and act as a mediator between the merchant and financial institutions involved in the transaction process.


Payment service providers, also known as payment facilitators. See PayFac.


Rapid dispute resolution; a system to prevent chargeback by refunding the customer's money before the dispute becomes a chargeback. A chargeback alert system provided by Visa.

Regulation E

A regulation from the Federal Reserve that outlines the rules and procedures of electronic funds transfers and provides guidelines for issuers of electronic debit cards. The regulation is meant to protect banking customers who use electronic methods to transfer money. Regulation E stipulates consumer responsibility as well, such as reporting a lost or stolen credit card no more than two days after the consumer becomes aware of the missing card; otherwise, the bank has no obligation to refund the losses that may result from a lost or stolen credit card.

Regulation Q

A regulation from the U.S. Federal Reserve that prohibits banks from paying interest on commercial accounts. In 2010, the Dodd-Frank Act rolled back Regulation Q and allowed for some banks to offer interest on checking accounts for its corporate customers.

Regulation Z

A regulation issued by the Federal Reserve that implemented the Truth in Lending Act of 1968, which was part of the Consumer Credit Protection Act. Regulation Z is intended to protect consumers from misleading practices by the credit industry and requires lenders of credit to provide consumers with reliable information about the cost of that credit. Applies to credit cards, installment loans, HELOCs and mortgages. Also known as the Truth in Lending Act.

retail accounts

Compared with commercial accounts. Part of consumer banking or personal banking.


When a customer's funds are transferred from the customer's card-acquiring bank account into yours.

Truth in Lending Act

(TILA) A federal law enacted in 1968 to protect consumers in their dealings with lenders and creditors. Regulates the information that must be disclosed by lenders to borrowers applying for credit. Prohibits creditors from compensating loan originators for anything other than the credit extended and for steering clients to unfavorable options for the sake of higher compensation.


A risk assessment a merchant must undergo before they can accept electronic payments. Merchants typically need to provide their last three bank statements, last three merchant processing statements, income statements and balance sheets for the lasty two years, a complete description of the goods and services being offered, and your business contact information.


A chargeback management system owned by Visa.

white label

White label products are sold by retailers with their own branding and logo but the products themselves are manufactured by a third party. White labeling occurs when the manufacturer of an item uses the branding requested by the purchaser, or marketer, instead of its own. The end product appears as though it has been produced by the purchaser.

white label payment gateway

A payment gateway whose branding can be customized according to their client's preferences. This allows merchants to receive payments through third-party services while using their own name and brand.