Payment Card Processing
Expert-defined terms from the Certificate Programme in Payment Technology Integration course at London School of Planning and Management. Free to read, free to share, paired with a globally recognised certification pathway.
**Acquiring Bank** #
**Acquiring Bank**
An acquiring bank, also known as an acquirer, is a financial institution that pr… #
The acquiring bank establishes a merchant account for the business, allowing it to accept card payments from customers. The acquirer assumes the risk of processing the transaction, ensuring that the merchant receives the funds from the sale, minus any transaction fees.
**Address Verification System (AVS)** #
**Address Verification System (AVS)**
Address Verification System (AVS) is a fraud prevention tool used in credit card… #
AVS checks the billing address provided by the cardholder during a transaction against the address on file with the issuing bank. A mismatch between the two addresses can indicate potential fraud, prompting the merchant to take additional security measures before completing the sale.
**Authorization** #
**Authorization**
Authorization is the process of validating a credit or debit card transaction #
When a customer initiates a payment, the merchant sends a request for authorization to the acquiring bank. The acquiring bank then forwards the request to the issuing bank, which checks the card's available balance and either approves or declines the transaction.
**Authorization Request** #
**Authorization Request**
An authorization request is a message sent from the merchant to the acquiring ba… #
The request includes information such as the card number, expiration date, and transaction amount. The issuing bank responds with an authorization code, either approving or declining the transaction.
**Authorization Response** #
**Authorization Response**
An authorization response is the message sent from the issuing bank to the acqui… #
The response includes an authorization code, which the merchant uses to complete the transaction.
**Chargeback** #
**Chargeback**
A chargeback is a reversal of a credit card transaction initiated by the issuing… #
Chargebacks can occur when a customer disputes a charge, alleges fraud, or did not receive the goods or services. Merchants are typically charged a fee for chargebacks and may also have their funds withheld until the dispute is resolved.
**Certificate Programme in Payment Technology Integration** #
**Certificate Programme in Payment Technology Integration**
The Certificate Programme in Payment Technology Integration is a professional tr… #
The program covers topics such as payment processing, security, fraud prevention, and regulatory compliance.
**Credit Card Processing** #
**Credit Card Processing**
Credit card processing is the series of steps and technologies involved in accep… #
The process includes obtaining authorization from the issuing bank, transferring funds between the acquiring and issuing banks, and depositing the funds into the merchant's account.
**CVV/CVC** #
**CVV/CVC**
CVV (Card Verification Value) or CVC (Card Verification Code) is a security feat… #
The CVV/CVC is a three- or four-digit code printed on the back or front of the card, used to authenticate the cardholder during a transaction. CVV/CVC is a critical component of card-not-present transactions, reducing the risk of fraud.
**Dispute** #
**Dispute**
A dispute is a disagreement between a merchant and a cardholder regarding a cred… #
Disputes can arise due to various reasons, such as fraud, unauthorized charges, or dissatisfaction with goods or services. Disputes can lead to chargebacks, impacting the merchant's bottom line and reputation.
**E #
commerce**
E-commerce is the buying and selling of goods and services over the internet #
E-commerce transactions involve payment processing, typically through credit or debit cards, digital wallets, or bank transfers. E-commerce has become increasingly popular in recent years, driven by the growth of online businesses, social media, and mobile devices.
**Fraud** #
**Fraud**
Fraud is the intentional deception or misrepresentation of information to obtain… #
In credit card processing, fraud can occur through various means, such as stolen cards, identity theft, or unauthorized transactions. Fraud can result in financial losses for merchants, cardholders, and financial institutions.
**Gateway** #
**Gateway**
A payment gateway is a technology that enables merchants to accept and process c… #
The payment gateway acts as an intermediary between the merchant's website and the acquiring bank, securely transmitting transaction data and facilitating authorization and settlement.
**Issuing Bank** #
**Issuing Bank**
An issuing bank, also known as an issuer, is a financial institution that issues… #
The issuing bank maintains a relationship with the cardholder, providing the line of credit or checking account funds used to make purchases. The issuing bank is responsible for authorizing or declining transactions, based on the cardholder's available funds or credit limit.
**Magnetic Stripe** #
**Magnetic Stripe**
The magnetic stripe is a black band located on the back of a credit or debit car… #
The magnetic stripe is read by a card reader, allowing the merchant to access the cardholder's account information and complete a transaction.
**Merchant Account** #
**Merchant Account**
A merchant account is a type of bank account that enables a business to accept c… #
The merchant account is established by the acquiring bank, allowing the merchant to process transactions and receive funds from sales. Merchant accounts typically involve fees, such as transaction fees, monthly fees, and chargeback fees.
**Mobile Payment** #
**Mobile Payment**
Mobile payment is a form of electronic payment that enables users to make purcha… #
Mobile payments can be made through various methods, such as mobile wallets, contactless payments, or mobile applications. Mobile payments have become increasingly popular, driven by the growth of mobile devices and e-commerce.
**NFC** #
**NFC**
NFC (Near Field Communication) is a technology that enables wireless communicati… #
NFC is commonly used in mobile payments, allowing users to make contactless payments by tapping their mobile device on a payment terminal. NFC is a secure and convenient method of payment, reducing the need for physical cards or cash.
**PCI DSS** #
**PCI DSS**
PCI DSS (Payment Card Industry Data Security Standard) is a set of security stan… #
PCI DSS applies to all organizations that store, process, or transmit cardholder data, requiring them to implement specific security measures, such as encryption, firewalls, and access controls.
**Payment Gateway** #
**Payment Gateway**
See Gateway #
See Gateway
**Payment Processing** #
**Payment Processing**
Payment processing is the series of steps involved in accepting, authorizing, an… #
The process includes obtaining authorization from the issuing bank, transferring funds between the acquiring and issuing banks, and depositing the funds into the merchant's account. Payment processing is a critical component of e-commerce and brick-and-mortar retail.
**Payment Terminal** #
**Payment Terminal**
A payment terminal is a device that enables merchants to accept and process cred… #
Payment terminals can be standalone devices or integrated into point-of-sale (POS) systems. Payment terminals read card information, transmit data to the acquiring bank, and receive authorization or decline messages from the issuing bank