An Acquirer, also referred to as a Merchant Acquirer, is typically a bank or financial institution that processes Credit Card or Debit Card or wallet payments on behalf of a merchant. They aggregate and separate those payments and then send them to Issuers, normally via the respective Card Scheme networks. The Acquirer is responsible for clearing transactions after they are charged to a cardholder. That is, the Acquirer makes the deposits into a Merchant Account when card or wallet payment transactions are processed.
- Acquirer Scheme Fees
These are fees paid by an acquiring member of a Card Scheme for each transaction sent to the scheme by the Acquirer. They vary according to the type of card and transaction. Acquirers generally do not pay scheme fees for On-UsTransactions.
- Address Verification Service/AVS
AVS stands for Address Verification Service. AVS is required for all card-not-present (keyed) credit card transactions. At the time of the transaction, simply enter the street address and postcode along with the card number, expiration date and amount. When the transaction is submitted for authorisation, the address and postcode are checked against the billing address and postcode for the cardholder. The AVS response is provided by the issuing bank and the result is either a match, partial match, no match, or AVS not available/error.
Authorised Deposit-taking Institution
- Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF Act)
The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) covers the financial sector, gambling sector, bullion dealers and other professionals or businesses that provide services covered by the Act.
The AML/CTF Act is part of a legislative package which brings Australia into line with international best practice to deter money laundering and terrorism financing.
The AML/CTF Act places a number of obligations on reporting entities when they provide designated services, including: enrolling and/or registering your business with AUSTRAC, customer identification and verification of identity, record keeping, establishing and maintaining an AML/CTF program, ongoing customer due diligence and reporting (suspicious matters, threshold transactions and international funds transfer instructions).
The AML/CTF Act and the supporting AML/CTF Rules together implement a principles-based and risk-based approach to regulation.
Reporting entities determine how they meet their obligations based on their assessment of the risk of whether providing a designated service to a customer may facilitate money laundering or terrorism financing.
- Associations/Payment Brands/Networks
Refer definition of Card Schemes.
- ATM Debit Card
An ATM (Automated Teller Machine) debit card is similar in size and shape to a credit card and features an account number and magnetic stripe on one side. When swiped or tapped through a Point-of-Sale terminal, the cardholder is sometimes prompted to enter a PIN number via a PIN pad. This will create an instant debit transaction, with funds drawn from the customer's bank account. Funds are authorised in real time, and if there are not sufficient funds in the customer's bank account the transaction will be declined. In addition to purchases, ATM cards can also be used at ATM machines to make cash withdrawals, deposits and balance transfers, and to check account balances.
This is the term given to the process of validating funds available on a credit or debit card. It is done at the time the transaction is entered or swiped through a Point-of-Sale terminal. When you process a credit card transaction, a response comes back from the issuing bank, all in a second or two. An authorisation is either approved or declined by the issuing bank. If the authorisation is approved, that means funds are available to be withdrawn from the customer's account and added to your bank account. When an authorisation is approved, a six or seven digit authorisation code is provided, along with the Address Verification Service (AVS) response. If no authorisation is given, this is a decline, meaning there are either not enough funds in the customer's bank account (if a debit card) or the customer has most likely reached their limit on their credit card.
- Authorisation Code
The authorisation code is the response code from the issuing bank that is returned to you at the time of authorisation. This code is recorded either by the Point-of-Sale terminal or software, as well as printed on any receipt or sales draft. If doing a phone or voice authorisation, you should record the authorisation code for reference, as it serves as proof of authorisation.
- Authorisation Fee
This is the amount charged to you each time a communication happens between your software or Point-of-Sale terminal and the authorising network. The communication can occur either over a dial-up telephone line, leased line or the internet. This fee covers all transaction types: sale transactions, post-authorisation transactions and refunds.
- Authorisation Only Transaction
Authorisation Only (Auth Only) is a special type of sale transaction. It authorises an amount on a customer's card but the item does not settle until a later time, sometime several days or weeks later. The purpose of an authorisation only transaction is to reserve an amount against a cardholder's available credit limit for a certain period of time. For example, you may perform an authorisation only transaction if an item ordered is out of stock. When the item becomes available, you settle the transaction, charging the card at that time.
- Authorisation Response
An issuing financial institution's electronic reply to an authorisation request, which may include: Approval – transaction was approved, Decline – transaction was not approved, Call Center – response pending more information; in this case you call the toll-free authorisation phone number. This occurs if there is a problem with the cardholder's card.
- Average Ticket Size
Average ticket size refers to the average dollar amount of your credit card transactions. Average ticket size is normally asked when you set up a new merchant account.
When filling out MPH survey - If you don't yet process credit cards, simply estimate your average credit card sale. (Keep in mind that the average credit card transaction is typically higher than the average cash transaction.) If you already process credit cards, simply divide your total monthly volume by the number of transactions to determine your average ticket size.
- Basis Points
Basis points is the percentage you are charged on a credit card transaction. One basis point is equal to 1/100th of 1 percent. Thus a rate of 2.33% is equivalent to 233 basis points.
- Batch or Batch Processing
A batch is a collection of transactions, usually a single day's worth. Batch processing refers to closing or settling an entire batch of transactions at one time. The Point-of-Sale terminal or credit card processing software can be set on manual batch close or automatic batch close.
The process of acquiring the account information required for processing a payment. This occurs by swiping a credit card or debit card through a card reader, inserting the card into a reader or by manually keying in the information.
- Card Issuer
- Card Not Present (CNP)
A payment card transaction where the cardholder/card are not physically present. For example, an online or mail/telephone order.
- Card Present
A transaction where the cardholder and payment card are both present. Sometimes referred to as a face-to-face transaction.
- Card Scheme
Refers to domestic and international credit, debit and charge card brands such as Visa, Mastercard, eftpos, American Express, Union Pay, Diners Club, JCB and Discover.
- Cardholder Preferred Currency (CPC)
See Dynamic Currency Conversion (DCC).
Occurs when a cardholder disputes a transaction with the card issuer. The issuer initiates a retrieval request against the merchant and the disputed amount is withdrawn from the merchant account until the matter is settled. Merchant are given a set period to dispute the chargeback with proof of purchase or delivery. The merchant account provider imposes a chargeback fee as part of the process.
The process of transmitting, reconciling and in some cases confirming payment instructions prior to settlement; it may include netting of instructions and the calculation of final positions for settlement.
- Cost of Acceptance
Cost of Acceptance is the cost merchants incur to accept a payment from a particular type of card. The Cost of Acceptance is calculated for each card type and can vary for each payment method. Merchants can on-charge these costs as a surcharge to the cardholder. (See Surcharging for further explanation).
- Credit Card
A payment card that is issued by a bank and used by an individual to purchase merchandise or services on credit.
- Credit Card Reader