Glossary of Industry Terms

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PCI Related Terms Technical Terms

Daily Discount

The process of deducting the processing fees every day from the merchant\'s settlement account. Typically this is withdrawn net of the total amount of the sales for the particular day.

Data Base Administrator

(Technical)

Database Administrator. Individual responsible for managing and administering databases.

Data capture is a broad term that defines any type of information, in any form, that is transmitted through and stored in computers according to specific input fields. Also known as electronic draft capture (EDC) or draft capture. A data processing term for collecting, formatting, and storing data in computer memory according to predefined fields, for example, customer name, account number, and dollar amount of purchase. When a terminal reads this information from a plastic card or from entries at a terminal, the information is stored in computer memory for later output as a hard copy printout or as soft copy on a CRT display.

Data Encryption Standard

(PCI) (Technical)

A cryptographic algorithm adopted by the National Bureau of Standards for data security. The algorithm encrypts or decrypts 64 bits of data using a 56-bit key. It is also a clock cipher elected as the official Federal Information Processing Standard (FIPS) for the United States in 1976. It is the successor is the Advanced Encryption Standard (AES).

(PCI) (Technical) See also Advanced Encryption Standard (AES).

(PCI) (Technical) See also Triple Data Encryption Standard.

Data Integrity

(PCI) (Technical)

Measures established to prevent unauthorized alteration of data.

Data Security Standard

(PCI) (Technical)

Database

(Technical)

Structured data format for organizing and maintaining easily retrieved information. Simple database examples are tables and spreadsheets.

Days Sales Outstanding

This is the average amount of time between a sale and the collection of the money due for the sale.

DDA Account

This is the merchants Demand Deposit Account, otherwise known as the merchant\'s home town bank account to which settled transaction amounts are deposited.

Debit

A charge to a customer\'s bankcard account. A transaction, such as a check, automated teller machine (ATM) withdrawal, or point-of-sale (POS) debit purchase that debits a demand deposit account.

Debit Card

(PCI)

It is a bank issued card linked to a checking account that allows its user to access their funds for the purpose of paying for merchandise. A debit card acts like a credit card, the difference being that funds are immediately taken from the cardholders checking or savings accounts. Debit cards can be used with a PIN and conducted across a Debit network and funds deducted immediately (for typically less expensive fees), or can be used as a signature debit transaction and be processed across the credit card networks. The signature debit transactions are not immediately taken from the consumer account like the debit network transactions are.

Debit cards have the same form factor and magnetic stripe as credit cards and allow the customer the option to enter their personal identification number (PIN) for added security protection.

(PCI) See also Non-PIN Debit Card.

(PCI) See also PIN Debit Card.

Debit Memo

See Chargeback.

Debit Networks

The electronic devices, pathways and terminals that enable debit card transactions.

The host of companies that honor card transactions and at the same time debit the card-holder’s checking account for the amount of the purchase. They are smaller, more numerous, and more likely to be only regionally accepted than their credit-based counterparts.

Deciphering

(Technical)

Decline

Declined Transaction

A transaction that was not approved by the card issuer; a response from a credit cards issuing financial institution when a transaction is not authorized.

Decryption

(PCI) (Technical)

Decryption is the process of transforming ciphertext back into plaintext. It is the reverse of encryption.

(PCI) (Technical) See also Encryption.

Decryption Key

(PCI) (Technical)

When used in the context of encryption, a series of numbers which are used by a decryption algorithm to transform encrypted (ciphertext) data into plain text data.

Default Password

(PCI) (Technical)

Password on system administration or service accounts when system is shipped from the manufacturer; usually associated with default account. Default accounts and passwords are published and well known

Delayed Capture

A transaction where the information from an authorization is saved by the merchant to capture funds at a later point. This is typically used by merchants who do not immediately ship goods to a customer.

Demand Deposit Amount

Demilitarized Zone

(PCI) (Technical)

A network added between a private and a public network to provide additional layer of security

Deposit

In transaction terms, the process of transmitting a batch of transactions from the merchant to the acquiring institution in preparation for settlement. The funds are subsequently deposited into the merchants DDA account, minus any processing fees and assessments.

Deposit Account

Deposit Bank

The bank to which the money of the customer will be transferred to. See also DDA Account.

Deposit Correction Notice

Adjustments (debits or credits) made for an out-of-balance condition due to various problems in the transmittal. The correction is made by the merchant\'s acquirer at the time of capture prior to being sent out for interchange.

Depository Financial Institution

The financial institution that receives deposits from customers or credits from the Federal Reserve Bank.

DES

(PCI) (Technical)

Dial-Up Terminal

An Authorization device which, like a telephone, dials an Authorization Center for validation of transactions.

Digital Cash

Two main mechanisms in that "digital coins" can be downloaded to the user\'s PC from a participating bank, or the set up of a digital money account with a bank. Both (encrypted) forms of cash can be sent to merchants for payment.

Digital Certificate

(PCI) (Technical)

Online identification that authenticates a consumer, merchant and a financial institution. Digital certificates are used to encrypt information exchanged in SET transactions. A certificate is a public key that has been digitally signed by a trusted authority (the financial institution) to identify the user of the public key.

Digital Data Storage

A financial instrument used by consumers in place of cash. Unlike a credit card, debit card purchases are deducted automatically from the cardholder\'s account, like a check. Visa and MasterCard now offer debit cards through banks and other financial institutions.

Digital Money

The same as digital cash but can also involve the use of software-based secure credit card transactions.

Digital Signature Algorithm

(Technical)

Digital Signatures

(PCI) (Technical)

An electronic signature, which cannot be forged. Instead it is generated from a computed digest of the text that is encrypted and sent with the text message. The recipient decrypts the signature and retrieves the digest from the received text. If the digests match, the message is authenticated and proved to be from the sender.

Digital Wallet

Software that provides the equivalent of a wallet for electronic commerce. A digital wallet, or e-wallet, holds digital money that you purchase similar to travelers\' checks. A wallet may also hold your credit card information along with a digital certificate that identifies you as the authorized cardholder. Before the consumer can make a purchase, he or she must first establish an account with the credit card processor, who provides an ID and password. These can then be used to make purchases at any Web site that supports that consumer validation mechanism.

Direct Debit

Direct debit, also referred to as direct withdrawal, electronic checks, and direct payments is a type of payment system that allows businesses to debit funds directly from customers’ bank accounts.

Direct Mail Merchant

(Technical)

A Direct Mail Merchant is a merchant that submits actual sales drafts for payment through the mail for their eventual payment or settlement. They are sometimes referred to as a “paper merchant.”

Direct Marketing

The method by which a merchant solicits business to a population that did not ask to be solicited (i.e. "junk mail"). It is often mistakenly confused with terms like, "mail order" and "telephone order." A merchant that sends catalogs or brochures to a mailing list of past customers is not a direct marketer, but a merchant who sends catalogs or brochures to everyone in a geographic area is a direct marketer.

Direct Marketers can also be considered merchants who solicits business to individuals or businesses that did not request the solicitous contact.

Disclosure

These are the terms or conditions for refunds, cancellations, or modifications made to reservations.

Discount Fee

Fee paid by the merchant to the merchant acquiring bank or other contracted party to handle the authorization and deposit of credit card funds into their Merchant Bank account. The fee is negotiated at the time that the Merchant selects their merchant acquiring bank or its processor and is usually quoted as a percentage or fractions thereof (basis points). The Discount Rate is the amount the Merchant\'s deposit will be discounted (e.g., a $10,000 deposit with a Discount Rate of 2.03% would become $9,797).

The Discount Rate includes the Interchange Fee, communication costs (leased lines, 800 services, etc.), split processing fees and other miscellaneous costs as determined by the merchant acquirer or its processor. While certain aspects of the Discount Rate will always remain, such as the Interchange Fee, some solutions/alternatives can help lower certain costs - i.e. communication costs, split processing fees, etc. - that merchant acquirer or its processor must pay and those savings can and should be passed on to the Merchant to help lower the Merchant’s Effective Rate.

This is a fee that the major credit cards charge for handling a transaction. There may be different rates, and rules for qualification, for different types of transactions. The specific rate may be expressed in a percentage of the transaction amount for the qualifying transactions for that rate. If the discount rate is 2.50%, for example, the discount rate fee is $2.50 for a $100.00 charge. In a three tiered pricing scheme, there different discount rates for each transaction type: Qualified, Mid-Qualified and Non-Qualified. Mid-Qualified is higher than Qualified and Non-Qualified is higher than Mid-Qualified.

Another prevalent pricing scheme is called interchange pass-through, where the interchange fee assessed by the card associations is passed through to the merchant. Sometimes an additional change is added on top of the association fees. This is called interchange pass-through plus.

There may be two components of the discount rate: a per item amount and a percentage. It might be 2.5% plus $.10 for each transaction.

Discover

A company that both issues cards and acquires transactions through merchants. This is unlike Visa and MasterCard which are associations of financial institutions.

Discover Card

Discover Card is one a small group of a major credit cards that is largely issued in the United States. The credit card was initially introduced to the public by The Sears, Roebuck and Company in the mid-1980’s.

Doing Business As

(PCI)

Doing business as. Compliance validation levels are based on transaction volume of a DBA or chain of stores (not of a corporation that owns several chains)

The DBA is the name the public sees, whether on a physical storefront or on the web. If the merchant has multiple business with (different DBAs), then separate merchant applications are needed for each DBA.

Domain Name System

System that stores information associated with domain names in a distributed database on networks, such as the Internet

Downgrades

Downgrades are rate changes that occur when merchants do not meet major credit card company requirements for a credit card sales transaction. For instance, if a transaction is not processed in the appropriate amount of time, the transaction might be downgraded because of the timeliness issue. It could have gotten a better rate, but because of the timeliness issue it was charged a higher rate.

Draft

A merchants record used to document (usually paper) the purchase of goods or services by a customer. It typically includes the consumer’s signature. This document can be used in chargeback processing to prove that the consumer purchased the goods or services.

Draft Capture

See Settlement.

The act of electronically capturing transactions.

Dual Control

(PCI) (Technical)

Dunn & Bradstreet Dunns Number

Dun & Bradstreet Data Universal Numbering System. A unique 9 digit code that identifies and links more than 57 million companies worldwide.

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