Card Payments Terminology & Definitions

Merchant Account Service
Card Payments Terminology & Definitions

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Terminology

  • Acquirer: Think of this as your financial partner, the wizard who magically handles your card transactions. In the UK, acquirers like Worldpay, Barclays, and Lloyds Bank are popular choices.
  • Assessment Fee: This is like the toll booth on the transaction highway, a fee paid to card networks like Visa or Mastercard for using their payment network. It’s usually bundled into your overall processing fee.
  • Authorisation Code: Your golden ticket to make sure a transaction is valid. Without it, you can’t complete a sale.
  • Basis Points: A fancy way of talking about fees. One basis point equals 0.01%, so if you’re quoted a rate of 50 basis points, it’s 0.50%.
  • Cardholder Data: Think of this as the crown jewels of card transactions, including the card number, expiry date, and the cardholder’s name. It must be guarded like a dragon guards its treasure to meet PCI DSS (Payment Card Industry Data Security Standard) regulations.
  • Card Not Present (CNP): When you’re not face-to-face with your customers, like during online or phone sales. Keep in mind that CNP transactions can have a touch of extra complexity, including potential higher fees and security considerations.
  • Chargeback: It’s like your customer hitting the ‘undo’ button on a transaction. A chargeback is initiated by the cardholder and can result in the funds being taken back from your account. Sometimes you’ll need to provide evidence to defend against chargebacks.
  • Contactless Payment: A magical way to pay where customers simply tap their card or mobile device on a contactless-enabled terminal. It’s super popular in the UK!
  • Interchange Fee: A fee that goes from your bank to the cardholder’s bank for handling a card transaction. The card networks (like Visa and Mastercard) set these fees, and they can vary based on the card type and transaction specifics.
  • Issuing Bank: This is the bank that issues your customers’ credit or debit cards. They’re the ones who give the green light for transactions.
  • Merchant: That’s you! The business owner who’s here to provide amazing products or services. We’re here to help you get paid smoothly.
  • Merchant Account: This is where the treasure chest of your card payments lands. It’s a dedicated bank account just for processing those shiny card transactions.
  • Merchant Agreement: Your contract with the acquirer, spelling out the rules and terms for your card processing services.
  • Merchant Category Code (MCC): Your business’s secret code that classifies what kind of shop you are. It’s used for reporting and risk assessments.
  • MID (Merchant Identification Number): Your unique identity in the payment processing world. Think of it as your VIP pass to the transaction party. MIDs help everyone know which transactions are yours.
  • Minimum Monthly Service Charge (MMSC): This is the safety net for your monthly processing fees. If your fees fall short of this amount, you’ll make up the difference.
  • Monthly Minimum: Similar to MMSC, this is the minimum processing fee you’ll pay each month, ensuring your account stays active.
  • PCI DSS Compliance: Think of it as your armor against the dragons of data breaches. Complying with PCI DSS means your customers’ card data is locked up tight and safe.
  • Payment Gateway: Think of this as the magical bridge that connects your website or point of sale system to the acquirer’s castle. It’s what makes those card transactions happen seamlessly.
  • Point of Sale (POS) Terminal: If you’re a brick-and-mortar store, this is your trusty companion. It’s the machine that helps you accept card payments right at your physical shop. In the UK, Ingenico and Verifone are popular choices.
  • Processing Fee: The price of the ticket for the card transaction rollercoaster. It includes interchange fees, assessment fees, and the acquirer’s markup.
  • Schemes: Not secret plans, but payment networks like Visa and Mastercard. They’re the ones who make card payments work.
  • Settlement: This is the moment when the treasure chest is opened, and the funds from card transactions are transferred from the acquirer’s vault to your merchant account.
  • Statement: Your monthly report card for card processing. It shows your fees, chargebacks, and deposits, helping you keep tabs on your business finances.
  • Terminal Capture: This is like taking a snapshot of your transaction data at your point of sale terminal before sending it off to the acquirer. It’s common in the UK for chip and PIN transactions.
  • Terminal ID: Your terminal’s unique name, used in transaction processing and reporting.
  • Terminated Merchant Account: From time to time acquiring banks serve notice on businesses currently processing with them. This can be for a number of reasons — for a more in-depth explanation we’ve written about it here.
  • Shopping Cart: In the merchant services industry, a shopping cart is an electronic commerce software that acts as the user interface for customers shopping online. Shopping cart software can include a wide range of features to help simplify the user journey and can provide useful insights through the use of cookies to track user activity. Shopping carts can also be programmed to help with up-selling products, managing inventory, fulfilling orders and collecting customer data.The shopping cart software doesn’t act as a payment gateway itself but rather communicates directly with gateways to process payments.

We’re here to simplify it all for you! If you’ve got questions about any of these terms or need more information about merchant services in the UK, don’t hesitate to get in touch. Your success is our top priority! 🌟

 

 

What Our clients Say

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Absolutely first class in every way.

Libby and the team at Merchant Advice Service are absolutely first class in every way. We have a furniture business and were let down by our existing payment processing company at a critical time for our business and without warning. We were lucky enough to be put in contact with Libby at Merchant Advice Service. After 48 hours Libby found us another company that were much better than our existing provider and the rates were better as well. Since this Libby has placed us with two other financial institutions that have been instrumental in not only saving us money but have also helped our business to grow.

I could not speak more highly of the team at Merchant Advice Service and would advise anyone to pick up the phone for a friendly chat if you want to improve on your current payment processing situation.

They deserve every 5 star review that they achieve

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Co Founder

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I would highly recommend using Merchant Advice Service

Libby helped us find a merchant account when i was having trouble finding one for myself. I would highly recommend using Merchnat Advice Service.

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Forever my go to place for merchant advice

Superb service from Libby James.
Forever my go to place for Merchant advice

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Understands clients needs accurately and goes for the bulls eye

Libby is very professional in her approach and simply a go getter. She understands clients needs accurately and goes for the bull eye. I am really happy with her services and would always recommend her for any of your payment needs.

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Stephen D’Souza
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Super-helpful, very clear and supportive

We reached out to Merchant Advice Service when seeking a new payment partner, after multiple failed applications due to the sector we are in. Libby was super-helpful, very clear and supportive and we achieved a successful outcome. Top marks and highly recommended.

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Phil Gendall

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