Sertifi's Payment Glossary

Working with payments and all of the terms that come with it can sometimes feel intimidating - like you have to learn a whole other language. Don’t worry, we’ve got you. To aide any confusion, we have created this payment glossary – a living document where we will house as many payment-related terms as we can find to set you up for success. Soon, you will be speaking payment lingo like a pro. 

Last Updated: 4/14/2023

# 

• 3-D Secure (3DS) - a protocol designed to be an additional security layer for online credit and debit card transactions in the merchant/acquirer domain, the issuer domain, and the interoperability domain 

A 

• Authorization Fees - fees that are charged to a merchant every time a credit card is used and checked out to ensure a secure transaction 
• Automated Clearing House (ACH) - a network of domestic financial institutions that provide a variety of automated electronic transactions 
• Address Verification Services (AVS) - a fraud prevention system meant to limit fraud and chargebacks by verifying that the address entered by the customer is associated with the cardholder's credit card account 
• Acquiring Bank - a financial institution, that processes payment card transactions for merchants and is defined by a payment brand as an acquirer 
• Authorization - occurs when a merchant receives a transaction approval after the acquirer validates the transaction with the issuer/processor 

B 

• Bank Transfer – when customers pay directly from their bank account
• Branded Cards – credit cards offered by big companies, usually used for rewards 

C 

• Cardholder – any individual authorized to use a payment card and/or an individual whose payment card is issued to them personally 
• Cardholder Data (CHD) - any information found on a customer’s card including verification codes 
• Card Authentication Value (CAV) - a card holder’s verification code on JCB payment cards
• Card-Not-Present Transaction – when a customer’s card is not physically present for a transaction 
• Card-Present Transaction - when a customer’s card is physically present for a transaction 
• Card Security Code (CSC) - a cardholder’s verification code on American Express cards 
• Card Validation Code (CVC) - a card holder’s verification code on Mastercard payment cards 
• Card Verification Value (CVV) - a card holder’s verification code on Visa and Discover cards 
• Chargebacks – the act of disputing the validity of a transaction in an effort to receive a refund, customers will dispute a transaction with their issuing bank who will reverse the transfer of funds from the customer to the merchant 
• Chargeback Reason Codes – a 2-to-4-digit alphanumeric code provided by the issuing bank involved in a chargeback, used to identify the reason for the dispute 
• Common Vulnerability Scoring System (CVSS) - an industry standard designed to convey the severity of computer system security vulnerabilities and help determine a level of urgency and the priority of response
• Consumer - an individual who purchases goods, services, or both

E 

• Early Termination Fees – fees merchants could face if they are looking to leave their current processing contract before the agreed upon end date 
• E-commerce – the electronic, digital commerce that takes place over the internet
• Encryption – the process of converting information into an incomprehensible form except to holders of a specific cryptographic key

F 

• Fiat Money - a currency issued by a government 
• Fraudsters - a person who commits fraud, especially in business dealings
• Frictionless Payments - online and offline checkout processes where the barriers of buying have been minimized

H 

• Hidden Processing Costs - fees that are involved in the production or management of a business and are difficult to identify 

I 

• Information Security - protection of information to insure confidentiality, integrity, and availability
• Issuing Bank – a bank that supplies physical credit cards and debit cards

K 

• KYC Banking Regulations - a legal requirement for financial institutions and financial services companies to establish a customer’s identity and identify risk factors, helping prevent identity theft, money laundering, and other financial crimes

M

• Merchant - any entity that accepts payment cards bearing the logos of any of the five members of PCI SSC (American Express, Discover, JCB, MasterCard or Visa) as payment for goods and/or services
• Monthly Minimum Fees – a fee a processor could charge based on their minimum transaction requirements and the merchant’s ability to meet them each month 
• Monthly Settlement Fee – a monthly fee charged by a processor that does not coincide with any actions taking place by the processor or the processor itself 
• Multifactor Authentication (MFA) - a method of verifying an individual based on at least two discrete elements of the following three categories: 1) possession, such as a mobile device; 2) biometrics, such as a fingerprint; and 3) knowledge, such as a passphrase  

N  

• Network Segmentation - isolates system components that store, process, or transmit cardholder data from systems that do not

P 

• Primary Account Number (PAN) - a unique number (typically for credit or debit cards) that identifies a card issuer and the particular cardholder account
• Payment Application - a software application that stores, processes, and/or transmits cardholder data as part of authorization or settlement, where the payment application is sold, distributed, or licensed to third parties
• Payment Gateway - on-property technology used to connect properties with payment processors
• PCI Compliance Fees – fees that merchants can be charged if they are not fully complying with the payment card industry data security standards (or PCI DSS for short).
• PIN Transaction Security (PTS) - a set of requirements set by the PCI Security Standards Council that prove a network to be PCI compliant and for a PIN to be accepted by POI terminals
• PIN Verification Value (PVV) - a hidden value encoded in the magnetic stripe of a payment card 
• Point-of-Interaction (POI) - the initial point where data is read from a credit card 
• Point-of-Sale (POS) - when and where a transaction occurs

R 

• Representment - the process in which businesses respond to chargebacks to figure out its legitimacy  
• Remittance Transfers - bank transfers made across international borders 
• Report on Compliance (ROC) - a report documenting detailed results from an entity’s PCI DSS assessment 

S 

• Statement Fees - fees processors charge to allow one to read your bank statement
• Surcharge - an additional fee charged by a merchant when receiving a payment by cheque, credit card, charge card or debit card meant to cover the cost of accepting that means of payment

T 

• Transaction Data - data related to electronic payment card transactions 
• Transaction Fees – fees you pay for each completed transaction based on your payment processor’s processing rates