Glossary

I am text block. Click edit button to change this text. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.ACH is an electronic network for financial transactions in the United States. The Automated Clearing House processes large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit payroll and vendor payments. ACH direct debit transfers include consumer payments on insurance premiums, mortgage loans, and other kinds of bills. Debit transfers also include new applications such as the Point-of-Purchase (POP) check conversion pilot program sponsored by NACHA-The Electronic Payments Association. Both the government and the commercial sectors use ACH payments. Businesses are also increasingly using the ACH network to collect from customers online, rather than accepting credit cards or debit cards.

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A Federal Reserve Bank that performs all of the following, or (2) an entity that executes an annual agreement with the National Association in which the entity agrees to comply with or perform all of the following:

  1. Adhere to these rules (except to the extent inconsistent with the policies or practices of the Federal Reserve Banks) and other applicable laws, regulations, and policies;
  2. Execute agreements with a mini-mum of twenty independent (i.e., not owned by the same holding company) Participating DFIs that bind such entities to the Cooperator’s rules and to these rules (except that a Federal Reserve Bank shall not be required to bind a Participating DFI to any provision of such rules of the National Association that is not incorporated by the Uniform Operating Circular of the Federal Reserve Banks); Provide clearing, delivery, and settlement services for ACH entries, as defined by these rules, between Participating DFIs that have selected that ACH Operator to perform ACH services (intra-ACH Operator services), and exchange transactions with other ACH Operators (inter-ACH Operator exchange);
  3. Process and edit files based on the requirements of these rules;
  4. Evaluate the credit worthiness of and apply risk control measures to their Participating DFIs;
  5. Adhere to the Federal Reserve’s Policy Statement on Privately Operated Multilateral Settlement Systems (as applicable); and
  6. Adhere to any National ACH Operator Performance Standards of the National Association.

A plastic card linked to a checking or savings account. Offline or signature-based debit cards work in the merchant environment the same as a credit card transaction and are not required to be “online” to access the account balance. Offline signature-based functionally work like credit cards; an initial transaction is used to hold funds and a second to settle or remove the funds from the card balance. Online debit cards or PIN-based debit cards ride over the ATM network; they require a PIN and the ability to authorize against the actual balance of the card in a single step transaction. Prepaid cards fall into the debit category.1

PIN/Online Debit Card Processing
This refers to a Card Present authorization where the cardholder enters their PIN into a terminal instead of using a signature or verbal authorization. These transactions use the ATM networks (NYCE, STAR, Interlink and PULSE) and the settlement happens in real-time instead of the two step process for credit cards (authorization/settlement). That is why cardholders can usually get cash back during this type of transaction, and processing fees are typically less expensive than Signature/Offline Debit transactions, due to a few factors including lower risk.

Signature/Offline Debit Card Processing (aka PIN-Less Debit)
This type of transaction has a verbal authorization or signature authorization (typically in a Card Not Present/MOTO transaction). In this type of transaction, the card must have a MasterCard or Visa logo, since the card networks will be used for authorization and settlement. The debit card processing fees for these transactions are typically higher than PIN/Online Debits due to a few factors including increased risk.

This refers to a Card Present authorization where the cardholder enters their PIN into a terminal instead of using a signature or verbal authorization. These transactions use the ATM networks (NYCE, STAR, Interlink and PULSE) and the settlement happens in real-time instead of the two step process for credit cards (authorization/settlement). That is why cardholders can usually get cash back during this type of transaction, and processing fees are typically less expensive than Signature/Offline Debit transactions, due to a few factors including lower risk.

This type of transaction has a verbal authorization or signature authorization (typically in a Card Not Present/MOTO transaction). In this type of transaction, the card must have a MasterCard or Visa logo, since the card networks will be used for authorization and settlement. The debit card processing fees for these transactions are typically higher than PIN/Online Debits due to a few factors including increased risk.

Branded payment portals enable businesses to securely accept credit, debit, eCheck, ACH payments, and can store invoices, manage customer accounts, and payment history. With a broad offering, from simple web payment forms – to full featured with archived invoicing and payment history, the Payrazr payment portals have your web payment needs covered.

A payment processor is a company appointed by a merchant to handle transactions from various channels such as credit cards and debit cards for merchant acquiring banks. They are usually broken down into two types: front-end and back-end. In an operation that will usually take a few seconds, the payment processor will both check the details received by forwarding them to the respective card’s issuing bank or card association for verification, and also carry out a series of anti-fraud measures against the transaction.

Payment Processors enable Merchants to receive Debit or Credit Card payments by providing a connection to an acquiring bank. These processors perform many functions such as evaluating whether transactions are valid and approved, and using anti-fraud measures to assure that a purchase transaction is initiated by the source it claims to be. Processors are held to standards, and regulations organized by credit card associations such as the Payment Card Industry Data Security Standards or PCI-DSS.

The Payment Card Industry Data Security Standard (PCI-DSS) is a set of security standards designed to ensure that all companies that accept, process, store or transmit credit card information maintain a secure environment.

A payment service provider (PSP) offers entities merchant services for accepting electronic payments by a variety of payment methods through their partnerships with acquiring banks. Payment service providers can also provide a variety of additional services outside of payment processing such as fraud protection, and Payment Card Industry Data Security Standard (PCI-DSS) compliance.

Merchant accounts are the type of bank accounts that authorize you to accept Credit or Debit card payments. Merchant accounts are required if you want to use a payment gateway provided by a payment service provider to process transactions.

An entity in the payment processing industry that supplies payment solutions such as: Payment Portals, Negotiators, Gateways, Interactive Voice Response systems (IVR), and Virtual Terminals.

Accounts receivable management (ARM) is a set of policies and procedures to ensure that owed payments are collected on time, in their entirety and credited to the proper account. The collection agency payment process is done in compliance with federal and state laws and regulations. If the consumers do not pay the amounts they owe then the debt may be turned over to a collection agency. The collection agency then initiates the process of collecting the debt.