Here at Procure Smart, it’s in our ethos to help businesses take control of their costs with fast, efficient switching. In order to do this, it’s important to us that we make things as simple as possible for our customers.
Whether in business or our everyday life, we’re all guilty of throwing around acronyms and terminology that we expect everyone else to know!
For this very reason, we’ve decided to put together a handy series of glossaries for each of our services to make things that little bit easier.
We’ll start by breaking down key acronyms and industry jargon in our easy-to-digest card payments glossary.
Card Payments Glossary: Terminology, definitions and meanings
Acquirer (acquiring bank or merchant acquirer)
A bank or other financial institution that is a registered member of a card network and processes payments on behalf of a merchant. The acquirer will arrange the card transaction’s settlement and will typically credit the merchant’s nominated bank account with the funds in three or four days but can be as quick as 12 hours. The timeframe will be stipulated in the service agreement with the merchant.
Authorisation
The process of verifying that a cardholder’s account has sufficient funds to pay for a transaction. Once verified, an authorisation code is created, and the funds are allocated to the transaction.
Cardholder
An individual or business to whom a bank has issued a credit or debit account with a card that they are authorised to use for payments.
Card not present (CNP) transaction
A transaction in which a physical card is not presented to the merchant, for example when a transaction is conducted online, over the phone, or by post.
Chargeback
A transaction in which a card issuer transfers the funds from a transaction back from the merchant to the cardholder in response to a dispute over the purchase raised by the cardholder. The merchant has a set length of time to dispute the chargeback and provide evidence to support its illegitimacy (known as chargeback representment).
Chargeback fee
A fee charged to the merchant by their acquiring bank for each chargeback transaction. This covers the cost of processing the payment back to the cardholder.
Merchant
A business that accepts payments for goods and services.
Merchant account
A bank account a merchant holds at an acquiring bank that allows them to accept payments for goods and services.
Merchant ID Number (MID)
A unique identification code given to a merchant by a payment processing provider to identify the business when a customer makes a card payment. MID enables merchants to accept payments to their merchant account and verifies the legitimacy of the business to the card issuer.
Next-day funding
A service that allows merchants that submit a batch of card transactions before a set time to receive the funds the next business day.
Payment Card Industry (PCI)
The sector of the financial industry involved with processing, transmitting and storing payment cardholder information.
Payment gateway
Software and servers that enable a merchant to accept card payments. Payment gateways securely collect and transmit transaction information to the merchant acquirer and send responses from card issuers, such as approving or declining transactions.
PDQ machine
PDQ stands for Process Data Quickly. A PDQ machine is another name or a POS terminal or card machine.
Terminal fee
A fee that merchants pay to merchant services providers to rent POS terminal hardware.
Transaction fee
A fee charged for processing payment card transactions. Fees are higher for credit cards and cards issued in a foreign country.
How can Procure Smart help me?
We hope you found our Card Payments Glossary helpful!
To further help businesses like yours, we have created a super-easy process for our experts to gather the necessary information to assess your costs and investigate savings, fast. All you need to do is upload your terminal and transaction statements to our web form and our team will undertake a complete audit of your billing.
Once we have this information, we will establish the most business-appropriate solution for you. We’ll approach the market on your behalf to negotiate a tailor-made cost-effective solution that adheres to your every business need.
Find out more about our card payment solutions and read our team’s answers to some of our customers most frequently asked questions.
