Start of menu
Search United Kingdom website
Close Menu

Glossary

Account Number - A unique number assigned by a financial institution to a customer. On a credit card, this number is embossed and encoded on the plastic card.

Additional cardholder - When you have a credit card it is possible to add an additional card to the account for use by someone else. The main cardholder has responsibility for ensuring payments on the additional card are made. Purchases are shown on the credit card statement sent monthly.

Affinity Card - Affinity cards are credit cards that are linked to organisations like charities, political parties and sports clubs. They are a good way of raising money as the organisation receives a donation from the card issuer for every card taken out, and a small percentage based on the amount of money you spend on the card each month.

Authorisation - Every retailer has a purchase limit above which they must seek authorisation from the card issuer before they can complete the sale. This can be done by telephone or electronically at the cash till. Authorisation is used to control credit card fraud. The cardholder's available credit limit is reduced by the authorized amount

Authorisation Code - A code that an issuer or its authorizing processor provides to indicate approval or denial for an authorisation request.

Authorisation Date - Date and Time that transaction was authorized.

Authorisation Only - A transaction created to reserve an amount against a credit card's available limit for intended purchases; the settlement may occur within three to five days, depending on the card type.

Authorized Amount - Currency amount approved.

Authorized Transactions - Transaction that has been approved.
Back to top
Balance Transfer - The process of moving an unpaid credit card debt from one issuer to another. Transfers of the balance owed may occur through the use of special checks, or may be handled directly by the issuer on your behalf.
Back to top
Cardholder - An individual to whom a card is issued, or who is authorized to use an issued card.

Cash Back - Cash back returns to you a percentage of the total amount spent on your credit card over a specific period of time, usually monthly or quarterly. This is particularly useful if you normally pay your credit card bills in full each month, as it means you get an effective discount on the products bought with your credit card.

Co-Branded Card - A co-branded credit card is sponsored by both the issuing bank and a retail organisation such as a department store or an airline. Cardholders may get benefits such as discounts or free merchandise from the sponsoring merchant based on account usage and terms.

Credit History - A partial profile of your financial life given within a particular time frame (usually measured in years). It shows the extent to which you pay your bills on time and how much you may owe particular parties. Credit card issuers use this information to decide whether to provide customers with credit cards.
Back to top
Data Capture - Also known as electronic draft capture (EDC) or draft capture. A data processing term for collecting, formatting, and storing data in computer memory according to predefined fields, for example, customer name, account number, and currency amount of purchase. When a terminal reads this information from a plastic card or from entries at a terminal, the information is stored in computer memory for later output as a hard copy printout or as soft copy on a CRT display. See Electronic Draft Capture.

Data Encryption Standard (DES) - DES. A cryptographic algorithm adopted by the National Bureau of Standards for data security. The algorithm encrypts or decrypts 64 bits of data using a 56-bit key. See also Triple DES.

Data Integrity- Measures to prevent unauthorized alteration of data.
Back to top
EDC - See Electronic Draft Capture.

EDI - Electronic Data Interchange - The process conducting business electronically using a set of standardized forms and data formatting

Electronic Authorisation - Obtaining authorisation for use of a credit card by electronic means, as via computer equipment and telephone line.

Electronic Commerce - A system of integrated communications, data management, and security services that allow business applications within different organizations to automatically interchange information.

Electronic Draft Capture (EDC) - EDC is a point-of-sale terminal that reads the information encoded in the magnetic stripe of bankcards. These terminals electronically authorize and capture transaction data, eliminating the need for a paper deposit.

Enciphering - Conversion of plain data into encrypted data (plaintext into ciphertext).

Encryption - Encryption is the process of disguising a message (using mathematical formulas called algorithms) in such a way as to hide its substance, a process of creating secret writing.

Encryption Key - When used in the context of encryption, a series of numbers which are used by an encryption algorithm to transform plaintext data into encrypted (ciphertext) data, and vice versa.

End-to-end Security - Application of security measures consistently across a whole data system or process, leaving no weak points.

Expired Card - A card on which the embossed, encoded, or printed expiration date has passed
Back to top
Fraudulent Transaction - A transaction unauthorized by the cardholder of a bankcard. Such transactions are categorized as lost, stolen, not received, issued on a fraudulent application, counterfeit, fraudulent processing of transactions, account takeover, or other fraudulent conditions as defined by the card company or the member company.

Fraudulent User - An individual who is not the cardholder or designee and who uses a card (or, in a mail/phone order or recurring transaction, an account number) to obtain goods or services without the cardholder’s consent.
Back to top
HTTP (Hypertext Transfer Protocol) - HTTP is a client/server protocol for delivering hypertext material across an internet. HTTP is stateless: when a client makes multiple requests to a single HTTP server, each request is treated independently. HTTP servers do not remember the earlier requests. The stateless protocol allows HTTP servers to respond to requests quickly.

HTTPS (Hypertext Transfer Protocol - Secure) - A variant of HTTP for handling secure transactions. Browsers that support the URL access method, “https”, connect to HTTP servers using SSL. “https” is a unique protocol that is simply SSL underneath HTTP. Use “https://” for HTTP URLs with SSL and “http://” for HTTP URLs without SSL. The default “https” port number is 443.

Hyperlink - An active cross-reference from one resource to another. The cross-reference is called active because it is presented in a medium which allows the reader to follow it, for example by mouse-clicking it. A reader can follow hyperlinks in an HTML document using a Web browser, or navigate through online help, or follow hyperlinks between terms defined in a glossary.


Back to top
ISO - Independent Service Organization. In the payment systems industry, a third party organization that facilitates merchant registration to accept charge or credit cards.

ISP – Internet Service Provider

Independent Service Organization (ISO) - ISO. In the payment systems industry, a third party organization that facilitates merchant registration to accept charge or credit cards.
Back to top
Magnetic Stripe - A stripe of magnetic information affixed to the back of a plastic credit or debit card. It contains customer and account information required to complete electronic financial transactions. The physical and magnetic characteristics of this stripe are specified in the International Organization for Standardization standards 7810, 7811, and 7813.

Magnetic-stripe Reader - A device that reads information from the magnetic stripe and transmits that information to a transaction processor or computer terminal. Also referred to as card reader.

Magnetic-stripe Terminal - A terminal that reads the magnetic stripe on a plastic card.

Mail/phone Order Merchant - A merchant that transacts business by mail or phone.

Mail/phone Order Transaction - A transaction where a cardholder orders goods or services from a merchant by telephone, mail or other means of telecommunication, and neither the card nor the cardholder is present at the merchant outlet.

Merchant Agreement - A written agreement between a merchant and a bank containing their respective rights, duties, and warranties with respect to acceptance of the bankcard and matters related to the bankcard activity.

Merchant Bank - Bank that has a merchant agreement with a merchant to accept (acquire) deposits generated by bankcard transactions.
Back to top
Online Financial Transaction - A transaction that is authorized, cleared, and settled in a single online message.

Open To Buy Amount - Currency amount of credit remaining for customer at the time of authorisation.

Order Number - A 17 character alphanumeric field that may be used between the Cardholder and the Merchant for accounting or tracking purposes.

Overlimit - This refers to a cardholder’s account that has surpassed its credit limit with a transaction. (Their outstanding balance is beyond their credit limit.)
Back to top
PIN (Personal Identification Number) - A sequence of digits used to verify the identity of the holder of a token. It is a kind of password.

Plastic (Card) - This is a generic term used to identify any of the various cards issued to cardholders.

Point Of Sale (POS) - Location in a merchant establishment at which the sale is consummated by payment for goods or services received.

Policy- An informal, generally natural language description of desired system behavior. Policies may be defined for particular requirements, such as confidentiality, integrity, availability, safety, etc.
Back to top
Receipt - A hard copy document recording a transaction that took place at the point of sale, with a description that usually includes: date, merchant name/location, primary account number, amount, and reference number.

Recurring Billing- Transactions for which a cardholder grants permission to the Merchant to periodically charge his account number for recurring goods or services.

Reference Number- Number assigned to each monetary transaction in a descriptive billing system. Each reference number is printed on the monthly statement to aid in retrieval of the document, should it be questioned by the cardholder.

Refund- Create a credit to a cardholder account, usually as a result of a product return or to correct an error.

Request Auth- Submits a transaction for Authorisation Only. (See Authorisation)

Retail Merchant- A merchant that provides goods and/or services in the retail industry, but is not a mail/phone merchant, a recurring services merchant, or a T&E merchant.

Retrieval Request - An issuer’s request for a transaction receipt, which could include the original, a paper copy or facsimile, or an electronic version thereof.

Reversal - An online financial transaction used to negate or cancel a transaction that has been sent through interchange in error.
Back to top
Service Charge - A component of some finance charges, such as the fee for triggering an overdraft checking account into use.

Standard Floor Limit - A floor limit that varies by merchant type. This refers to a currency limit on transactions above which authorisation requests are required.

Statement - A written record prepared by a financial institution, usually once a month, listing all transactions for an account, including deposits, withdrawals, checks, electronic transfers, fees and other charges, and interest credited or earned. The statement is usually mailed to the customer.
Back to top
Terminal Id - In the payment card industry, a number provided to a merchant by a credit card processor when that merchant retains the services of that credit card processor to uniquely identify a terminal. Also sometimes called the terminal number. A credit card processor may assign several terminal IDs to a given merchant’s terminals although that merchant has a single merchant ID with that processor.
Back to top
User Authentication - Process of validating that a user is who the user represents himself/herself as.

User Id - The identity of the person authorized to log on to the system.
Back to top
Variable Interest Rate - With variable-rate cards, the APR changes when interest rates or other economic indicators change. Also known as a floating rate.
Back to top
What are accounts payable?
Money a company owes for merchandise or services bought on credit. (Source: SmartMoney)

What are accounts receivable?
Money owed to a company for merchandise or services bought on credit. (Source: SmartMoney)

What is an affiliate?
Two companies are affiliated when one owns less than a majority stake of the other, or when both are subsidiaries of a third company. Or, generally, any association between two companies that is short of a parent-subsidiary tie. (Source: SmartMoney)

What is an annual percentage rate?
The interest rate borrowers pay on a loan. Most of a loan's upfront fees are factored into the APR. (Source: SmartMoney)

What is a balance of payments?
A statement of a country's trade and financial transactions with the rest of the world over a period of time. (Source: SmartMoney)

What is currency?
Money that circulates in an economy. Also refers to a country's official unit of exchange. (Source: SmartMoney)

What is a depreciation?
A decline in value. In accounting, a reduction of earnings to write off the cost of an asset over its estimated useful life. (Source: SmartMoney)
Back to top

Contact us

Have a query? Call our dedicated team between 8am and 5pm weekdays: Tel: +44 (0) 1273 696933 See all UK contact information