Acquiring Bank - The financial institution that conducts business with merchants who accept credit cards. The bank buys the merchant's sales slips and credits the monetary value to the merchant account.

Credit Card Batch - A collection of credit card transactions saved for submitting at one time. For merchant account processing, transactions are stored up during working hours and sent to the credit card processor in a batch to be executed at the end-of-day (or other time period).

Capture - The submission of a credit card transaction for processing and settlement. Through this, customers' credit card purchases are debited and the merchant is credited. Once a transaction is sent by the merchant to their credit card processor, transaction details are forwarded to the customer's credit card company and then the credit card company's bank before the transaction is "captured," and payment is initiated.

Card Absent/ Manual Entry - Credit card information that is manually keyed-in through a computer or terminal key pad as opposed to being swiped though a terminal.

Card Present/ Swiped Card - Credit card information that is entered electronically by swiping the card through the terminal.

Certificate Authority - A certificate authority is a private company that issues digital certificates. Certificate Authorities conduct a thorough background check on the validity and credit of a business, as well as vouch for a business' right to use their company name and Web address.

Chargeback - A reversal against a sale that was credited to the merchant's account. Chargebacks are usually the result of an error made by the card holder's bank, a misunderstanding by the customer, or fraud. The merchant must provide proof that the goods and services in question were provided to the customer.

Credit Card Identifiers - Credit card identifiers include the credit card number and the expiration date of the card. For some transactions (in particular, Internet transactions), identifiers may also include all or part of the customer's address.

Digital Certificate - A digital certificate is provided to a business by a certificate authority after undergoing a thorough background investigation. A digital certificate provides a business with a protected Server ID that can be used in conjunction with encryption technology to guarantee the security of a transaction.

Discount Rate - A small percentage fee of the total credit card sales volume per month (usually ranges from 1.5% to 3.5%). Rates are often lower the higher the monthly sales volume. Rates may be higher if you have bad credit or your industry is high risk. Usually, point-of-sale terminal transactions offer the lowest Discount Rate.

EFT (Electronic Funds Transfer) - Transfer of money initiated through electronic terminal, automated teller machine, computer, telephone, or magnetic tape. In the late 1990s, this increasingly includes transfer initiated via the Web. The term also applies to credit card and automated bill payments.

Encryption - Credit card information is encoded into an unreadable format and sent across the Internet in the form of data packets. It can only be decrypted by the intended server. This means that when a customer provides their credit card identifiers to a secured Web site, that information cannot be intercepted or decrypted by anyone other than the intended server. 128-bit SSL encryption has never been broken, though it requires Netscape V3.0 (or Internet Explorer 3.02) or higher; 40-bit SSL is slightly less secure, but can be accessed by older browsers.

ISO - An Independent Sales Organization (ISO) is registered through Visa and Mastercard to set up credit card merchant accounts. ISOs represent banks or third party processors.

Issuing Bank - This is the bank that maintains a consumer's credit card account and will pay out to a merchant's account when the consumer makes a credit card purchase. At the end of the month the issuing bank will bill the customer for the debt.

Leased Line - A permanent telephone connection between two points that is always active (as opposed to a private dial connection). The fee for such a connection is usually a fixed monthly rate). Real-time verification requires a leased line.

Merchant - A business that has a merchant account to accept credit cards.

Merchant Identification Number (MID) - A number provided by a merchant bank to identify the merchant in a credit card transaction.

Merchant Account Provider - A merchant account provider may be a third party processor, ISO, MSP, bank, association or financial service provider (e.g. American Express, Discover). Each merchant account provider represents a bank and offers a variety of products and services that enable you to accept credit cards as payment from customers.

MOTO - Stands for mail order/telephone order. Typically, businesses that conduct credit card transactions over the phone or by mail are considered to be riskier than retail businesses that swipe credit cards.

MSP - A Merchant Service Provider (MSP) is essentially a credit card broker. See ISO.

Per Transaction Fee - A fee that is charged to process each transaction (usually $0.20 to $0.60).

Point-of-Sale Terminal - Point-of-Sale terminals allow a customer to slide their credit card through a reading device to verify transactions in real-time. Costs for point-of-sale terminals begin at about $350, but can cost up to $1,500 for high-end models.

Real-time - The term "real-time" means to incur immediately. For credit card processing, this means that the validity of a customer's credit card, as well as their available credit limit can be checked immediately before processing is accepted. This is extremely important for card-present and Internet transactions, in which it is difficult and costly to get back in touch with the customer.

Retrieval Request - A request from a cardholder's bank for information about a charge which is being disputed. Retrieval requests usually precede a chargeback.

Secured Server - A secured server uses security protocols, like SSL, to protect against outside tampering. Both Internet and non-Internet processing can be secured and protected. See also digital certificate, encryption and firewall.

Secured Sockets Layer (SSL) - SSL is used to encrypt and protect data usually on an order from an online merchants web site. Since the intended client machine can be identified, only that machine is able to decrypt the transmission.

Shopping Cart - On an E-commerce enabled web site, a method of collecting the items chosen by a consumer for purchase from an on-line catalog.

Third Party Provider - A third party provider does not issue a merchant account themselves; they represent a merchant account provider or series of providers. However, third-party processors do handle the transaction process, providing secured service to a point-of-sale terminal, computer, or E-commerce site, as well as providing a monthly reporting service. Many banks choose to outsource credit card processing to third party processors instead of handling it in-house.

Touch Tone Authorization Fee - Usually refers to point-of-sale transactions in which the merchant must use the phone to verify a customer's credit card (because there is a processing problem or a problem with the customer's credit card). Watch for steep fees. Some providers allow a set number of free voice authorization calls per month.