Glossary of Terms: A
ABA Routing Number
A unique nine-digit number assigned to each banking institution, used to identify the bank and direct ACH debits and credits. The ABA routing number is usually found at the bottom left of a personal or business check before the account number.
Automated Clearing House - group of processing institutions linked by a computer network to process electronic payment transactions between financial institutions.
Acquirer, Acquiring Bank
A financial institution that is a member of Visa and/or MasterCard and maintains the merchant credit card processing relationship. The acquirer receives all transactions from the merchant to be distributed to the issuing banks.
A company that specializes in the issuance of Travel and Entertainment (T&E) cards. American Express services the cards it issues, and serves as its own transaction processor with its own processing network.
Advanced Programming Interface - APIs allow users to program to a pre-constructed interface, instead of individually programming a device or piece of software.
The process followed by the Card Associations to determine whether an Issuer or an Acquirer has ultimate responsibility for a chargeback. Either member initiates this process after the representment process is completed.
MasterCard International, Visa U.S.A. or Visa International, which are licensing regulatory agencies for bankcard activities.
Automated Teller Machine - an unattended computer terminal that performs basic teller functions when a cardholder inserts a card into the ATM and enters the correct PIN. Typical functions include dispensing cash, accepting deposits and loan payments, and accepting account transfers and inquiries. Also used by credit cardholders for receiving cash advances.
The plastic card used in an ATM for deposits, cash withdrawals, account transfers and other related functions. A PIN must be entered to withdraw cash and access account functions. An ATM card may also be used to make a debit purchase if the merchant has a PIN pad to accept the key entry.
The process by which a transaction is approved by the issuer or by Visa/MasterCard/Discover on behalf of the issuer. Permission is given to (or denied) the merchant, via the acquirer, to accept a specific transaction from the cardholder account. An authorization indicates only that the card is valid and that sufficient funds are available on the cardholder's credit limit at the time the request is made.
Authorization Approval Code
The numerical code designated by the issuer, assigned to a sales transaction as verification that the sale is authorized.
Authorization Only (Auth Only)
Used to reserve an amount against a credit card's available credit limit for intended purchases. Authorization Only is most frequently used in the lodging (check-in), restaurant (tab) and car rental (pick-up) industries, where an approval is received for an estimated amount prior to the finalization of the charge amount.
Automatically sending information to resolve a chargeback on a merchant's behalf without the need for merchant intervention.
The average dollar amount of sale for credit card transactions.
Address Verification Service - a service supported by Visa, MasterCard, Discover and American Express that verifies the cardholder's billing address against the one on file with the issuer. AVS is designed to help combat fraud in non-face-to-face transactions.