Glossary of Industry Terms

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PCI Related Terms Technical Terms

Back Office Conversion (BOC)

An application which allows merchants to accept checks at the point of purchase or at manned bill payment locations and convert the checks to ACH debits during back office processing. The authorization to convert the check is obtained through receipt of the customer’s (Receiver’s) check (source document) plus notice displayed at the point of sale or manned bill payment location where the check is presented.

Backup

(PCI) (Technical)

Duplicate copy of data made for archiving purposes or for protecting against damage or loss

Bandwidth

The amount of electronic data that can be transferred through an electronic connection in a given time. For modems connected by telephone to the Internet, the modem\'s "speed" represents the maximum possible bandwidth of the connection, such 56.6 Kps (kilobits per second). Competent Web site operators strive to keep the size of Web page files low to conserve bandwidth and speed downloading.

Bank Account

Bank account number for the merchant to which funds will be deposited.

Bank Card

A debit or credit card issued by a bank or other financial institution, such as a Visa or MasterCard card.

and accepted by merchants for payment. They are used to credit an account for processing a sales transaction. The credit card is the most common form of a bank card. American Express, Discover, Diners Club, JCB, etc., are issued directly from their respective operations, rather than through banks.

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. The first six digits on the credit card, which unambiguously determine the card issuing bank. The American Express account number range begins with “3”, the Visa account number range begins with “4”, the MasterCard account number range begins with “5” and the Discover account number range begins with “6”.

Bank rate

See Discount Fee.

Bankcard Association

Associations of bank that agree to certain term for processing transactions between cardholders and merchants. Visa and MasterCard are primary examples of card associations.

Bankruptcy Notification Service

The Bankruptcy Notification Service is a joint effort of the two major worldwide credit card companies (MasterCard and Visa) to log, track and assess bankruptcy filings and related items.

Basis Points

A “basis point” is 1/100th of a percentage point and as typically used to identify markup or fees gor credit card processing.

Batch

A collection of credit card transactions saved for submitting at one time, usually each day and considered a single unit for purposes of processing and tracking from a processor perspective. A batch can be processed automatically as well via a POS terminal. Merchants who do not have real-time verification systems must submit their transactions manually through a POS terminal. Batch fees may be charged to encourage a merchant to submit his or her transactions at one time, rather than throughout the day.

Batch Close

The process of sending a batch of transactions to the acquiring bank, or its processor, for settlement.

A batch close/settlement is closing out all your transactions for the day. IT is like talking all your credit card sales to the bank and submitting for deposit.

Batch Fee

This is the amount of money charged to a merchant each time a batch of transactions are transmitted (see batch close).

Batch Processing

The action of processing transactions together at one time (in a batch) as opposed to individually (one at a time). This occurs when a merchant transmits the “batch” of daily sales for processing. An “open” Batch is one that is not yet “closed.” Batching generally occurs at least once per day. An acknowledgement may be sent to the merchant by the processor.

Batch Settlement

See Batch Close.

BBB

See Better Business Bureau (BBB).

Better Business Bureau (BBB)

A national organization whose code of ethics and programs ensure trust between members (businesses) and consumers.

Biller-direct

A service that allows a business to provide electronic invoices to their customers. Customers visit the company’s website or portal to make the payment.

Billing address

The formal address of the cardholder/consumer. It is often collected by a merchant for Address Verification Service to verify that the consumer is the real cardholder and additional chargeback protection.

BIN

See Bank Identification Number (BIN).

Biometrics

The measurement of a living trait used to control access. Refers to the interpretation of personal traits for access control purposes in place of password or ID verification systems.

BOC

See Back Office Conversion (BOC).

Bundled Rate

There are two basic models used for pricing of transactions to a merchant: Interchange pass-through and Bundled. With Interchange Pass-through, the discount rate is more transparent to the merchant and is shown for each interchange category (each class of transaction processed according to the card associations). With the Bundled approach, the interchange categories are bundled into separate tiers, with each tier having a different rate associated with it. These tiers are commonly called Qualified (Qual), Mid-Qualified (Mid-Qual) and Non-Qualified (Non-Qual), although different names and strategies can be applied to group interchange categories into pricing categories. These terms reflect if the transactions have been qualified for the best rate possible (Qual - the lowest fees); are getting a better interchange qualification (Mid-Qual); or are getting the worst rates (Non-Qual). The trend is to use Interchange pass-through due to the more transparent nature of the pricing.

Business Day

A day on which Bank is open for business (other than Saturday or Sunday).

Business Financials

Documents which merchants compile that describe, in detail, their operation in terms of financial transactions.

The three forms that are typically known collectively as “business financials” are: Profit and Loss Statement, Balance Statement, and Statement of Cash Flow.

Business Type

Business type is determined by the way in which a business processes transactions. Common industries include (others are industries such as auto, airline, petroleum, QSR, etc.):

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 charged to an ISO or agent for services or transactions that are in turn purchased by a merchant. If an IC/ISO sells the services/transactions to a merchant at an amount higher than their respective buy rate, a residual profit (See Residual) is calculated and accumulated and remitted for each month.