Understanding card payments: Your glossary of useful terms
If you’re new to accepting cards, it can be hard to follow all of the industry acronyms and jargon.
Our mission is to make payments effortless – which means speaking your language.
But sometimes there are terms we simply can’t avoid, as they’re set by industry regulators and bodies. So, to help you spot the difference between AVS from a CNP we’ve put together a handy glossary of frequently used terms in card processing.
But don’t worry if you can’t remember them or get confused. When it comes to accepting card payments, we speak in plain and simple terms – and a helpful advisor is only a call away should you need something explaining.
Authorisation (Auth)
This refers to the initial request made by a merchant for a customer’s card issuer to release funds. This verification process confirms that a payment card has adequate funds to cover a transaction.
AVS
The Address Verification Service (AVS) is a fraud prevention system that can help to limit fraud and chargebacks. AVS works to verify that the billing address entered by the customer is the same as the one associated with the cardholder's card account.
Banking window
This is the window a business owner must complete their end-of-day reconciliation within. Otherwise, the card takings will roll over to the next trading day.
Card declined
A declined card transaction means that the issuing bank can’t authorise the transaction because there was an issue during the purchasing process. This could include suspicion of fraudulent activity, insufficient funds or a new card that is yet to be activated.
Card turnover
Annual or monthly turnover is the total value of transactions processed by a business owner in a year or month.
Chargeback
When there is a dispute over a debit card payment, a chargeback can be raised before the dispute is confirmed as successful.
You may be charged an administration cost to manage the chargeback, and the chargeback value will appear on your invoice. If you dispute the chargeback and are successful, we will refund the value to you.
Chip & PIN
Chip and PIN is an added layer of security that lets your card machine accept payments safely from your customers using their payment card. Otherwise, if the card was lost or stolen, a signature could be easily forged to make a payment.
CNP
If a customer wants to make a purchase but they’re not physically present with a payment device, they can still make that purchase. It's called a card-not-present (CNP) transaction and most commonly occurs when purchases are made over the phone and online.
To complete the transaction you will need to type the cardholder's card details into your card machine. This comes with added security risks, so a CNP transaction is classed as non-qualified.
Contactless
Contactless payments are made using radio-frequency identification. Contactless cards, phones and watches are the most commonly used methods. The maximum transaction value for cards is currently limited to £45.
For Apple and Google Pay there is no capped amount, as digital payments use two-step authentication, an added layer of security.
CSC
Card Security code (see also CVV). The last three digits on the signature strip on the back of a credit card. On Amex, it’s the four digits on the front of the card.
CVV
Cardholder Verification Value. This data is included as the last three digits on the signature strip (CSC) and represents a unique card verification method. As above, on American Express, it’s the four digits on the front of the card.
Ecommerce
Ecommerce refers to the buying and selling of goods or services using the internet, and the transfer of money and data to make these transactions.
GDPR
It stands for the General Data Protection Regulation. It's the core of Europe's digital data and privacy legislation.
MCC Codes
A four-digit code that is assigned by card companies to merchants to help them understand the types of goods and services it provides.
Merchant account
The name of the account that business owners need before they can legally accept and process card transactions. Find out more about merchant accounts.
MOTO
MOTO stands for Mail Order Telephone Order and refers to transactions where the cardholder is not present.
Not authorised
A payment may also show as ‘declined’ if a charge is not authorised. This usually means that there is a problem with the account or that the customer is at, near, or over their credit limit.
This is different from a card declined payment, as the cause is related to the customer’s bank account and not your card machine or network.
PCI Compliance
PCI Compliance is the process of making sure your business and employees follow the laws, regulations, standards, and ethical practices to keep your customers’ personal card data safe from the risk of fraud. To be compliant, a business must conform to the Payment Card Industry Data Security Standard (PCI DSS).
PCI DSS
Payment Card Industry Data Security Standard (PCI DSS) is the industry-wide minimum cardholder data security standard you need to be compliant. Find out more about PCI compliance with our in-depth guide.
Point-to-point encryption (P2PE)
P2PE is a security standard that requires credit card information to be encrypted instantly upon its initial use and then securely transferred directly to the payment processor before it can be decrypted and processed.
Terminal Identification Number (TID)
A unique numerical identifier that denotes the specific card machine or payment channel where a payment transaction initiated, used by merchants, card associations and others to source the origin of fraud transactions.
