Merchant Account Glossary of Credit Card Terms: ABA to Corporate Resolution
ABA (American Banker’s Association) Routing Number
This 9-digit ABA-assigned number identifies individual banks. This number is used to facilitate the electronic routing of funds (ACH transfer) from one bank account to another.
Access Number
This is the telephone number dialed by the modem that lets a computer communicate with an online service or Internet Service Provider (ISP).
ACH (Automated Clearing House)
A processing organization networked with others to exchange (clear and settle) electronic debit/credit transactions (no physical checks).
Acquiring Bank
This is the status of a Visa/Master Card member bank that establishes and maintains the merchant relationship and processes all merchant transactions. Humboldt Bank is an acquiring bank. Contrast with “Issuing Bank.”
Address Verification Service (AVS)
AVS is a tool for merchants to reduce the risk associated with non-face-to-face transactions, such as mail order or telephone order. A merchant using AVS (must have equipment that is AVS-compatible).
Articles of Incorporation
This legal document identifies the terms under which a corporation was created and identifies the principals.
Auth/Batch Fee
This is the amount of money we charge the merchant each time we issue an authorization for a transaction, and each time they “close” a batch of transactions.
Authorization
The process whereby a transaction is approved by an issuing bank, authorized agent, or Visa/MasterCard on behalf of that issuer, before the transaction is completed by the merchant via telephone or terminal.
Authorize.Net, Inc.
Authorize.Net, Inc. is the Utah-based vendor of Authorize.Net, a popular Internet protocol.?? They also sell eCheck.Net, an Internet-based protocol used to ACH consumer checking ac-counts.
Average Ticket Size (AVT)
The average Visa/MasterCard dollar amount of each transaction the merchant anticipates processing.
AVS
See “Address Verification Service.”
Bank Identification Number (BIN)
Visa/MasterCard assigns unique, identifying numbers to each member acquiring or issuing bank. These numbers identify parts of both credit card and merchant account numbers.
Basis Points
A “basis point” is 1/100 th of a percentage point. With regard to merchant processing, there are 50 basis points separating the Qualified and Mid-Qualified discount rates and 140 basis points separating the Qualified and Non-Qualified discount rates. Example: a merchant with a Qualified Discount Rate of 2.35% would have Mid-Qualified and Non-Qualified Discount Rates of 2.85% and 3.75% respectively.
Batch Processing
This occurs when a merchant transmits the “batch” of daily sales stored in the terminal for processing. An “open” Batch is one that is not yet “closed.” To “close” a batch is to transmit the information from the merchant’s location (terminal or software) to our processor.
Business Financials
The three forms that are known collectively as “business financials” are: Profit and Loss Statement, Balance Statement, and Statement of Cash Flow. For the purposes of Humboldt Bank merchant processing, we are only concerned with a given merchant’s Profit and Loss Statement and Balance Statement. (Refer to Exhibit “K” in this manual.)
Business Type
Business type is determined by the way in which a business processes transactions:
Retail – Merchants selling tangible goods in a face-to-face environment who normally use conventional terminals and swipe transactions.
Service – Merchants selling services like plumbing or auto repair in a face-to-face environment, who normally use conventional terminals and may key or swipe trans-actions.
Restaurant – Merchants selling prepared foods in a face-to-face environment, who normally use conventional terminals and swipe their transactions.
Hotel – Merchants selling lodging and hospitality services in a face-to-face environment, who normally use conventional terminals and key or swipe their transactions.
MOTO – Merchants selling tangible goods or services in a non-face-to-face mail order, Internet or telephone order environment, who normally use software or conventional terminals and always key their transactions.
Internet – An Internet Merchant is one who processes transactions via the Internet. Processing transactions via the Internet means that the cardholder types their credit card information online and the transaction is processed seconds later.
Buy Rate
The amount of money we charge an IC/ISO for services or transactions that are paid by the merchant. If an IC/ISO is able to sell a merchant at an amount higher than their respective buy rate, we remit a portion (referred to as “residuals) to the IC/ISO each month. The Buy Rate does not give the IC/ISO free reign to charge whatever they want over their Buy Rate; allowable amounts for fees and rates are reflected in their contract and in the User Grid.
Chargeback
A dispute process initiated by the card issuer (usually in response to the cardholder) after receipt of the initial charge or presentment from the merchant via the acquirer.
Checklister
The Checklister is the “gatekeeper” of Merchant Processing; all applications enter the system here, are reviewed for completeness, and summarized so the rest of the department can quickly figure out the status of a file.
Contingent Liability
This is the term used by underwriters and sales people to identify a situation that is created when merchants process transactions in advance of the date cardholders can expect to receive the goods or services they purchased. Travel agencies pose a contingent liability risk. Similarly, all MOTO merchants pose contingent liability risks to the bank. We limit this liability to a maximum of 90 days.
Corporate Resolution
This form is used by a corporation to designate an individual(s) as a signer(s) on behalf of the company.
