When a merchant processes sales through his or her merchant account on behalf of another merchant. Laundering violates the terms of merchant agreements, also known as draft laundering or factoring.

Transaction that are made when a credit card is physically present. Merchants are charged different levels of fees by the card transaction processors (such as Visa, MasterCard), depending on the level of fraud risk involved during a transaction. Card present transactions, because the card is available for inspection, are considered less risky and therefore carry lower fees than online or phone transactions.

The three- or four-digit number typically following the account number, located on the signature panel on the back side of most credit and debit cards, However, CVV numbers on American Express cards appear on the face of the card above the card number.

Card transactions (Internet or MO/TO purchases, for example) for which the customer's card is not physically present and therefore not handled by the merchant. Interchange is set higher on these transactions because there is a greater likelihood of fraud involved during the transaction process.

A terminal, personal computer, or other device that a cardholder uses to initiate an electronic commerce purchase transaction.

A dispute initiated by the cardholder which can be in the form of a chargeback.

The bank that issued a bankcard to an individual. The term is frequently used in conjunction with interchange arrangements to identify the card-issuing bank.

In the credit card industry, cash back refers to a rewards program that returns a percentage of the total amount spent on the credit card over a specific period of time to the cardholder, usually monthly or quarterly.

The individual kind of card within each card type, also providing a pattern for downgrades. Some card type/charge types are only available for certain MCC/SIC code (certain merchant industry types).

The number of calendar days from the central processing date of a transaction receipt during which the issuer may exercise a chargeback right. The number of days varies from 45 to 180 days, according to the type of transaction.

A card tied to a cardholder's DDA bearing the logo of Visa, MasterCard, or Discover. A PIN is not entered at the point of sale and the transaction is assessed through the Visa, MasterCard or Discover Interchange. The transaction does require a cardholder signature, similar to a credit card transaction.

A service that guarantees payment on each check presented, up to a limit defined by the account, provided that the merchant follows correct procedures in accepting the check. The guarantee service collects any returned items, in which the merchant typically follows a stringent set of procedures. See also Check Verification.

The conversion of a paper check to digitized images at various points along the collection process, eliminating the need for unsecured paper hand-offs.

See “Check Imager”

The bank designated by the member to receive the member's daily net settlement advisement. The clearing bank conducts funds transfer activities with the net settlement bank and maintains the member's clearing account.

A checking account set up at a financial institution that will receive a member's credit or debit for net settlement.

An eight digit number supplied with a credit card transaction. This number is given to the Acquirer along with a retrieval request.

Code 10 calls are made when merchants are suspicious about accepting a credit card. The phrase "Code 10 authorization" is used to avoid alerting the customer to the fact that the merchant is suspicious of their card. The operator then asks the merchant a series of YES or NO questions to find out whether the merchant is suspicious of the card or the cardholder. The merchant may be asked to retain the card if it is safe to do so.

Compliance to the Visa and MasterCard rules and regulations.

Checks issued by credit or prepaid card companies used is situations that do not take physical credits to allow the cardholder additional access to their line of credit or prepaid card balance.

A refund or price adjustment given for a previous purchase transaction.

Can be issued by banks and nonbanks and are associated with such brand names as American Express, Discover Financial Services, MasterCard, JCB International Co. Ltd. and Visa. (The Green Sheet)

See “Card Verification Value”.