Credit Card Processing and Merchant Services Glossary

Glossary

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Term	Definition
Magnetic Ink Character Reader (MICR)	A countertop device used to scan and recognize magnetic ink character lines. A MICR line is a series of digits at the bottom of a check that provides details about the bank and account on which the check is drawn and supports authorization and clearing routines.
Magnetic Stripe	A stripe of magnetic information that is attached to the back of a plastic credit or debit card. The credit card's magnetic stripe contains three tracks of data. The first and second tracks in the magnetic stripe are encoded with information about the cardholder's account, such as their credit card number, full name, the card's expiration date and the country code. Additional information can be stored in the third track.
Mail Order/Telephone Order (MO/TO)	A type of transaction in which the merchant typically has a card terminal and manually keys in the required card information for transmission to the appropriate authorization network.
Manual Credit Card Transaction	a transaction keyed (as opposed to swiped) into a POS System.
MATCH List	See “TMF”.
Media	The documentation of monetary transactions (i.e., sales drafts, credit slips, computer printouts, etc…).
Media Retrieval Requests	Media retrieval is the process of obtaining paper documents from a centralized location. You can obtain two types of media retrieval requests: 1) requests for sales record from cardholders and 2) requests for documentation in defense of the chargeback from card issuers. You must fulfill media retrieval requests within 12 days of receipt. If you fulfill media retrieval requests after 12 days of receipt, the status is fulfilled late. If you cannot fulfill the media retrieval requests, the status is expired.
Member Service Provider	“Independent Sales Organization”.
Merchant	A person or firm contractually associated with an acquirer for the purpose of accepting payments for goods and services rendered.
Merchant Account	A checking account established by a merchant for the purpose to receive payment for transactions.
Merchant Account Number	A number that numerically identifies each merchant to the merchant processor for accounting and billing purposes.
Merchant Agreement	A merchant agreement is the written agreement between a merchant and a bank that contains their respective rights, duties and warranties, with respect to acceptance of the bank card and matters related to the bank card activity.
Merchant Bank	a bank that sponsors an acquirer into the MasterCard and Visa card systems. NAB's sponsoring banks are HSBC Bank USA and Wells Fargo. Store owner or seller of products.
Merchant Category Code (MCC)	A code assigned by an Acquirer to identify a merchant's type or mode of business and the merchandise sold.
Merchant Collusion	Program that permits a card issuer to file a claim against the acquiring bank associated with an identified fully collusive merchant, and to seek partial recovery (the lesser of [i] one-half of the credit limit in effect at the time that the card issuer closed the cardholder bust-out account, or [ii] one-half of the actual amount of fraud losses) for fraud losses attributable to transactions on cardholder bust-out accounts conducted at a fully collusive merchant.
Merchant Discount	Percentage of the transaction value or a set fee after cost. The merchant discount is how the acquirer is reimbursed for its costs. It covers interchange fees, authorization costs, and costs of sales draft processing.
Merchant Number	See “Merchant Account Number”.
Merchant Service Charge	The discount rate or other fees assessed by the acquirer towards the merchant.
Merchant Service Provider	1) An entity or individual that contracts with a member to provide merchant sales and solicitations. (2) A type of registration for MasterCard under the Member Services Provider (MSP) program. See “Independent Sales Organization”.
Merchant Settlement Amount	The net dollar amount of card transactions processed for each individual business day.
Merchant Statement	A comprised report produced daily, weekly, or monthly to note the transaction deposit volume and billing information of a merchants account for a selected period.
MICR	See “Magnetic Ink Character Reader”.
Mid-Qualified Discount Surcharge	Discount rate and sometimes transaction fee charged in addition to the qualified discount rate for transactions that are key-entered, batched out within 24 hours of the transaction time, have AVS (Address Verification Service), and Order Number and reply to the Mail/Telephone Order prompt with an “Exact match;” sometimes referred to as a mid-qualified bump. The mid-qualified surcharge is not assessed on MOTO/Internet merchants (as mid-qualified is considered the MOTO/Internet qualified discount rate).
MID-Qualified Transactions	A Mid-Qualified Rate (which is sometimes called a partially qualified rate) is the percentage rate that merchants are charged when they accept credit cards that don’t qualify for the smallest rate. It will occur for a few reasons, such as when a the credit card a customer is keyed into a POS as opposed being swiped magnetically, or a business credit card or special rewards is employed.
Monthly Discount	For merchants who can supply at least one month of previous processing statements from the last three months, their full batch sales total (less returns and third party amounts) will be deposited into their DDA. All discount, transaction, and monthly fees will be deducted at the end of the month from the merchant's DDA.
Monthly Minimum	A way to ensure the merchants pay a minimum amount in fees each month and or cover costs from the provider to maintain the account and to create minimal profits. If a merchant’s qualified fees do not equal or exceed the monthly minimum, they will be charged up to the monthly minimum to satisfy their minimum fee requirements. In a three-tier or four-tier pricing structure, the qualified discount rate is used in calculating the monthly minimum. With NAB, a monthly minimum of $25.00 is required for free equipment. For example, if a merchant usually processes $10,000 in Visa/MasterCard volume and their qualified discount rate is 1.69%, the merchant would have paid $169.00 in qualified discount rates. Because this is more than $25.00, the merchant would not be billed any portion of the monthly minimum. If however the merchant processes $1,000 in Visa/MasterCard volume and their qualified discount rate is 1.69%, the merchant would have paid $16.90 in qualified discount rates. This means that the merchant did not reach their $25.00 in monthly minimum and so would be assessed with an additional charge of $8.10 to get the merchant up to $25.00 in qualified discount rates. In an interchange plus pricing scenario, the basis points charged to the merchant are what count towards the monthly minimum.
MOTO	See “Mail Order/Telephone Order”.
MSP	Short for Member Service Provider. See “Independent Sales Organization”.

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