Credit Card Processing and Merchant Services Glossary

Glossary

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Term	Definition
Back-end Processor	A data processing company that contracts with acquirers to provide communication and processing systems that connect with the interchange systems for clearing and the ACH systems for settlement services. The back-end processor receives the data, captures items from the front-end processor, formats and submits the items to the card company for clearing and settlement. The back-end processor also handles all chargeback and retrieval processing, the production of merchant statements, and the formatting of the merchant deposit for submission to the depository bank or into the ACH.
Backbilling	A pricing structure where the qualified discount rate for the current month is detailed on that month’s statement and downgrades, transaction fees, and monthly fees are billed on the following month’s statement.
Balance Sheet	A financial statement showing assets, liabilities, and net worth as of a specific date.
Bank Identification Number (BIN)	A numerical code assigned to each federally insured financial institution for the routing of transactions and other purposes. ISOs and MLSs board merchants using the BINs of their respective acquiring or merchant banks.
Bankcard	A card, issued by a Financial Institution, which cardholders can use to access their financial resources, such as a checking account or a line of credit. The bankcard is issued by a financial institution that is a member of MasterCard International, Incorporated and/or Visa International/Visa USA.
Bankcard Association	A group of institutions that use a common processing and administrative center for the purpose of sponsoring a bankcard program.
Bankcard Service Provider	A third party association, including independent sales organizations and member service providers, that provide merchant and cardholder services for issuers and acquirers.
Basis Point	One one-hundredth of a percent; one basis point is 0.01% or 0.0001; 10 basis points would be 0.10% or 0.0010; 25 basis points would be 0.25% or 0.0025; 100 basis points would be 1.0% or 0.0100.
Batch	Usually a day's worth of transactions, including sales and credits to be processed by the card processor.
Batch Authorization	A process in which the authorization requests are accumulated and sent at one time for authorization. The resulting responses will also be returned in a grouping, or batch. Batch authorization is particularly effective when real-time authorization is not effective or when the order to ship an item is not requested in a real-time situation.
Batch Authorization Transaction System (	A system designed to allow certain merchants, the ability to batch authorizations on their own time schedules.
Batch Close	The process of sending transactions to the processor for clearing and settlement. Also known as end-of-day closing or terminal balancing.
Batch Header Ticket	The identifying form used by the electronic submission merchant to indicate a batch of sales or credit slips (usually one day's transactions).
Batch ID Number	A sequential number assigned to each submitted batch. Each transaction within the batch shares the same reference number, which is used mainly for reconciliation and retrieval.
Batch Processing	A data processing procedure in which similar input items are grouped for processing, as opposed to real-time processing, which takes place as each transaction occurs. Accumulating the data in advance means that the user cannot influence the processing while it is in progress.
Batch Settlement	An electronic procedure in which the front-end processor consolidates the transactions within a group or batch and forwards the batch to the back-end processor for submission to the card company for clearing and later settlement or payment of funds to the acquirer. The acquirer then funds the merchant’s account for payment.
Bill Detail	Information from a biller that provides line-level information to a customer, including specific billing event information such as credit card charges, telephone calls, or kilowatts used. Also called invoice detail.
Bill Summary	Summary information from a biller that is essential to a consumer to understand what is owed. Typical information may include: amount owed, date due, biller, biller’s account number, summary record, summary, and invoice summary.
Billback	A means of recovering or reducing interchange fees for transactions clearing differently than planned. The processing company passes through the charges to the merchant.
BIN	See “Bank Identification Number”
Bundled Rate	A discount rate is offered to the merchant that includes both the qualified discount rate and the transaction fee. A separate transaction fee is not billed to the merchant. Surcharges are added to the bundled qualified rate as normal.
Buy Rate	The fee associated with the acquiring bank that is equal to interchange (which is paid to the issuing bank) plus the acquiring bank's markup. (The Green Sheet)

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