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Glossary of Industry Terms

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                                           PCI Related Terms Technical Terms

E-check

An ACH debit to a consumer account for transactions that originated via the internet, phone, at the point-of-sale, or by mail.
 

e-Commerce

The process of buying and selling via the Internet and/or processing the payment electronically via the Internet or through direct computer-to-computer interaction.
 

EDC Terminal

Sometimes referred to as Electronic Data Capture terminal, a point-of-sale device that reads information encoded in the bankcard’s magnetic stripe, performs authorization functions, stores transaction data, and batches and transmits that data to the acquirer for processing.
 

Edit Rejects

The rejection of a sales draft by Visa or MasterCard before a transaction processes through interchange, but after it has been paid by the acquirer.
 

Effective Rate

The overall measure of the costs/fees charged a merchant for credit card processing. It is expressed as a ratio of the total amount in fees divided by the total credit card volume.
 

See also Discount Fee.

Egress

(PCI) (Technical)
Traffic exiting a network across a communications link and into the customer\'s Network
 

Electronic Authorization

Obtaining authorization for use of a credit card by electronic means, as via computer equipment and telephone line.

Electronic Benefit Transfer

The processing of federal and state welfare programs via electronic methods. Typically EBT systems replace paper-based processing. It is an electronic system that allows a government benefit recipient to authorize the transfer of their benefits from a Federal, State or local government account to a merchant account to pay for products and services received.
 

Electronic Bill

The bill or invoice sent over the internet by the business/merchant to the consumer.
 

Electronic Bill Presentment and Payment

Most often refers to business to consumer uses for paying for services and goods via a monthly bill/invoice.
 

Electronic Cash Register

A device used for cash sales. Can also be integrated to accept credit cards and is often the combination of cash register and POS- terminal. Frequently ECR is established on a personal computer as a software application.
 

Electronic Check

A term used to refer to one of the following types of electronic transactions: ACH-based electronic check (paper check converted into an ACH debit), electronic network check (paper check converted to a payment through an ATM or credit card network), internet-based payments, or telephone-based payments.

Electronic Check Council

A Council that works to improve check clearing and collection processes.

Electronic Commerce Indicator

Internet transactions are tagged with this indicator and sent on to Visa or MasterCard for processing. It identifies the transaction of having the Internet as it source. It is a requirement (October 1st, 2000) for all merchants with a majority of sales via the Internet to use an approved and ECI compliant payment gateway. Hand keying of credit card numbers in to standard credit card terminals would not capture and pass on the ECI, therefore this method is not Electronic Commerce compliant.

Electronic Data Capture

The process of authorizing, capturing, and settling a transaction; the electronic (paperless) use of a POS terminal for validating and submitting credit card transactions to a merchant account provider or other credit card processor. In online credit card processing, software takes the place of the POS terminal.

To use a Point of Sale (POS) terminal for submitting credit card transaction information to a merchant account provider.
 

See also Electronic Draft Capture.

Electronic Data Interchange

The electronic communication of business transactions, such as orders, confirmations and invoices via a computer network, separate from the Internet e-Commerce, used to handle financial transactions between banks and other institutions. It is a process conducting business electronically using a set of standardized forms and data formatting.
 

Electronic Draft Capture

The system, in which the sale transactions (Drafts) are captured for authorization and/or settlement processing. See also Electronic Data Capture.
 

EDC is a point-of-sale terminal that reads the information encoded in the magnetic stripe of bankcards. These terminals electronically authorize and capture transaction data, eliminating the need for a paper deposit.

See also Electronic Data Capture.

Electronic Funds Transfer

Electronic Funds Transfer – or EFT – is a system of transferring money or funds from one bank account directly to another without any paper money or funds changing hands in the exchange. EFT also applies to credit card and automated bill payments.
 

Electronic Interchange Reimbursement Fee

A VISA classification level that is charged to the merchant when a credit card is not present, swipe not read, card number is manually key entered.

Electronic invoice presentment and payment

Most often refers to business-to-business uses involving the use of submitting invoices for payment of goods and services.
 

Electronic Money

Funds stored in electronic form on a computer or a microprocessor. Digital funds can be purchased and remain on a special storage device (typically a smart card) that will be accessed for payment to merchants that support the use of those funds.

Electronic Payments Association

NACHA develops operating rules and business practices for the Automated Clearing House (ACH) Network and for electronic payments in the areas of Internet commerce, electronic bill and invoice presentment and payment (EBPP, EIPP), e-checks, financial electronic data interchange (EDI), international payments, and electronic benefits services (EBS). Additional Information: http://www.nacha.org/
 

Electronic purse

A smart card on which electronic money can be stored.
 

Electronic Ticket Capture

Devices with which a retailer “swipes” your card when you make a credit card purchase. The device reads your account information from the magnetic strip on the back of the card, adds the amount, date and type of purchase being made, then codes and sends that information to the processing system. The buyer information is "read" by the computer system and merged with the sales information.
 

Electronic Transactions Association

An international trade association based in Washington, D.C. that represents merchants and offers electronic transaction processing products and services. The purpose of the ETA is to influence, monitor and shape the present and future of the merchant acquiring industry by providing distinct leadership through merchant education, advocacy and the exchange of information. See http://www.electran.org/.
 

Elliptic Curve Cryptography

(PCI) (Technical)
An approach to public-key cryptography based on elliptic curves over finite fields. Elliptic Curve Cryptography (ECC) is emerging as an attractive public-key cryptosystem for mobile/wireless environments. Compared to traditional cryptosystems like RSA, ECC offers equivalent security with smaller key sizes, which results in faster computations, lower power consumption, as well as memory and bandwidth savings. This is especially useful for mobile devices which are typically limited in terms of their CPU, power and network connectivity. Elliptic Curve Cryptography (ECC) has recently been endorsed by the US government.
 

Embossing

The process of printing identifying data on a bankcard in the form of raised characters. Embossing is a hybrid printing/production process whereby numbers and letters are pressed into the surface of the receiving material, either paper, plastic or metal, and can be felt as well as read optically.
 

Enciphering

(PCI) (Technical) See Encryption.

Encrypt

(PCI) (Technical) See Encryption.

Encryption

(PCI) (Technical)
Encryption is the process of disguising a message (using mathematical formulas called algorithms) in such a way as to hide its substance, a process of creating secret writing. It is an advanced technology that effectively changes and scrambles information to prevent it from being changed, copied or stolen. It is the conversion of plain data into encrypted data (plaintext into ciphertext). PIN numbers are encrypted prior to transmission to prevent unauthorized tampering.
 
Use of encryption protects information between the encryption process and the decryption process (the inverse of encryption) against unauthorized disclosure.
 

(PCI) (Technical) See also Deciphering.

(PCI) (Technical) See also Decryption.

Encryption Key

(PCI) (Technical)
When used in the context of encryption, a series of numbers which are used by an encryption algorithm to transform plaintext data into encrypted (ciphertext) data, and vice versa.
 

End-to-end Security

(PCI) (Technical)
Application of security measures consistently across a whole data system or process, leaving no weak points.
 

Equipment

A very general term usually referring to electronic components used for processing transactions. Most credit card transactions are conducted electronically by using Electronic Draft Capture (see EDC). Typically this is performed by point of sale (POS) terminal, Software or via the Internet.
 

Equity

The numeric value of a business found by subtracting the total business debts from the businesss current market value. For example, if your debts come to $75,000, but your business could sell today for $275,000— you have $200,000 worth of equity.
 

Escrow

An account where money is held until a specific event takes place. An escrow account is a way to exchange agreed upon services for money between two parties. A buyer might put money into an escrow account, which is supervised by a neutral party, such as a financial institution. The financial institution (which would be called the "escrow agent" in this case) releases the money to the seller only after the seller has carried out certain agreed-upon tasks (e.g., deliver a product, complete a work, or perform a service).
 

Euro

The common currency shared by most of the members of the European Union (Britain, Greece, and Denmark are not participating). Introduced in January 1999, the euro will eventually replace national currencies such as the German mark, French franc, and Italian lira.
 

Expense Account

Account that business people use expressly to pay for business-related travel and entertainment costs.
 

Expired Card

A card on which the embossed, encoded, or printed expiration date has passed.
 

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Their in-depth analysis and subsequent report were most informative and their recommendations helpful and realistic.
Central Connecticut State College

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Central Connecticut State University
 
 
Central Connecticut State University
1615 Stanley Street / P. O. Box 4010
New Britain, CT 06050-4010
 
To Whom It May Concern:
 
Central Connecticut State University contracted the services of PE Systems, LLC (PES) in the fall of 2003.  PES offered a unique service that we thought was important for the university to utilize.
 
CCSU, like many schools faced with tighter budgets, is concerned about paying the fees levied on credit card payments made by students and parents.  How much did CCSU really pay in fees?  How could we benchmark our policies related to credit card payments.  PES offered the answers.  The PES professionals understand the credit card industry and want us to understand it too.
 
While somewhat unique to our industry, their contract agreement is fair and equitable.  After an analysis of operations, the agreement is to share 50% of the actual savings from initiatives they recommend, truly a no loss situation.  Their in-depth analysis and subsequent report were most informative and their recommendations helpful and realistic.  Our experience with Tom Parrish, PES President, was positive.  He showed passion for his work and interest and care in his recommendations for CCSU.  He was conscientious, knowledgeable, and most importantly honest in his presentations to my staff and me.
 
I have no hesitation in recommending PE Systems and encourage all institutions considering the costs of credit card services to utilize PE Systems’ valuable service.
 
Sincerely,
 
Frank R. A. Resnick
Chief Financial Officer
 






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