Glossary of terms
Address Verification System - Also referred to as Address Verification Service, AVS is a system used to verify whether the billing address given by the customer matches the credit card used for the transaction. AVS was created as a result of a regulation by Visa and Mastercard that requires all merchants who manually key-in the majority of their credit card transactions to have a special fraud prevention feature on their credit card processing equipment. This system checks the billing address of the credit card provided by the user with the address on file at the credit card company.
If a merchant chooses not to use AVS, Visa and Mastercard will not support their transactions and will charge an additional percentage on those sales.
BatchA collection of credit card transactions saved for submitting at one time, usually each day. Merchants who do not have real-time verification systems must submit their transactions manually through a point-of-sale (POS) terminal. Batch fees are charged to encourage a merchant to submit his or her transactions at one time, rather than throughout the day.
ChargebackA chargeback occurs when a cardholder disputes a credit card transaction with his or her credit card issuer. The card issuer initiates a chargeback against the merchant account. The amount of the disputed transaction is immediately withdrawn from the merchant’s bank account, and the merchant has a limited amount of time (per the card issuer) to dispute the chargeback with supporting documentation such as proof of purchase, customer signature, proof of delivery, etc. A chargeback is ultimately decided and resolved by the card association. A chargeback fee is usually assessed to the merchant on top of the actual transaction. See also Retrieval request.
Credit cardA transaction card bearing an account number assigned to a cardholder with a credit limit that can be used to purchase goods and services and to obtain cash disbursements on credit. The cardholder is subsequently billed by an issuer for repayment of the credit extended at once or on an installment basis.
Currency conversionThe process by which the transaction currency is converted into the currency of settlement or the currency of the issuer for the purpose of facilitating transaction authorization, clearing, and settlement reporting. The currency of transaction is determined by the acquirer; the currency of the issuer is the preferred currency used by the issuer, and most often, the currency in which the cardholder will be billed.
Dynamic Currency Conversion - A credit card processing solution that allows merchants to offer international customers the choice to pay with Visa and Mastercard in either their local currency, or the merchant’s base currency.
The exchange rate includes a 3% margin which is displayed on the cardholder’s receipt. The revenue split is available to the merchant.