Glossary: Merchant Processing

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Terms related to credit card processing, merchant accounts, and ecommerce.


Acquiring Bank

Financial institution that initiates contracts with merchants to perform electronic transactions.


The process (typically over a credit card terminal) where an issuing bank approves a credit card transaction.


A service provider that allows internet merchants to accept online payments by credit card and electronic check.

Batch Processing

The processing of a series of programs completely on a computer, without manual intervention.


Submission of a credit card transaction for processing.

Card Present

Credit or debit card transaction where the person is physically present so the card can be swiped.

Charge Back

The bank-enforced return of funds to a consumer (usually a reversal of outbound transfer funds).


Gatekeeper of merchant processing where all applications enter, are reviewed and summarized for quick figuration of status on the file.

Credit Card

Plastic card with a magnetic strip that substitutes for cash or check and accrues interest.

Credit Card Terminal

Device that performs transaction with a debit or credit card.


Acronym for “Card Verification Value 2.” A card-security code that appears on debit and credit cards.

Data Breach Insurance

Insurance that provides coverage related to the release of secure information to an unsafe environment.

Data Capture

Process where information is collected, formatted and stored in a computer’s memory.

Debit Card

Bank card which is used in conjunction with a customer’s checking account for cash transactions.

Discount Rate

A discount rate includes a number of fees and assessments merchants are required to pay for accepting credit and debit cards.

Early Termination Fee

Charge that occurs when one party breaks the term of agreement or contract.


Buying and selling over electronic systems such as the Internet and other computer networks.


See Early Termination Fee.


See Payment Gateway.

Gift Card

A card for a specific store or product that provides an amount to spend only at that store or for that product.

Google Checkout

Online payment processing service by Google where users store their card and shipping information.

Host Capture

Capture where transaction information is stored in the processor’s host computer rather than the merchant’s POS system (no merchant initiation required).


Merchant equipment that imprints embossed information from a bank card onto a sales draft.


Ecommerce web application server and platform.

Magnetic Stripe

The stripe on the back of a credit or debit card that stores information necessary to run a transaction.


Businessperson who trades commodities produced by others for profit.

Merchant Account

Bank account of a merchant to receive proceeds from credit-card purchases.

Merchant Category Code (MCC)

Merchant classification code that shows business type or processing type, authorization and settlement.

Merchant Number

Number that identifies each individual business to the processing company.

Merchant Processing

Merchant Processing enables merchants to accept all major credit cards as well as debit and ATM cards for payment through a safe and secure network.

NewtPayTM and NewtPay ProTM

Credit-card processing solutions for online merchants, offered by The Small Business Authority.

Payment Gateway

Ecommerce service that authorizes and protects payments for e-business, online retailers and traditional brick and mortar.


Service provider of ecommerce services that allow payments and money transfers online.

Per-Transaction Fees

Fees associated with credit- and debit-card transactions.

Point of Sale (POS)

See Credit Card Terminal.

Shopping Cart

See Online Shopping Cart.

Statement Fee

Fee by provider for generating and mailing monthly statements of transactions.

Transaction Dispute Resolution

Process of resolving a dispute between parties regarding a transaction.