Glossary of Terms

Account Number

A unique sequence of numbers assigned to a card account identifying the issuer and type of financial transaction card.

ACH (Automated Clearing House)

A group of U.S. processing institutions that have networked together to exchange (clear and settle) electronic debit/credit transactions. All electronic draft capture (EDC) merchants receive credit for their deposits via ACH, and discount fees are debited from all merchants via ACH.

Acquirer

A financial institution that establishes and maintains merchant accounts for the acceptance of card transactions. An acquirer is often referred to as a merchant bank.

Address Verification Service (AVS)

Verifies the cardholder's billing address at the time of the authorization request. If someone uses a stolen card AVS can detect this for you. If the address doesn't match, the transaction can still be approved at the merchant's discretion.

Authorization

A procedure by which card issuers either approve or decline a merchant's request for authorization. Authorizations are based on the cardholder account status and available credit.

Authorization Code

A response number from the card issuer that identifies whether there are sufficient funds available on the card to accommodate the transaction. It also checks to make sure no blocks have been placed on the account. An authorization is not a guarantee of a sale, nor does it guarantee against a chargeback.

Authorization/Transaction Fee

This amount is charged each time a card transaction is submitted for authorization. The fee generally ranges from $.20 to $.50.

Automated Teller Machine (ATM)

An unattended, self-service terminal activated by a card and cardholder validation method (CVM) that provides cash withdrawals. It also may perform other functions including basic banking functions such as deposits, account transfers, balance inquiries, etc.

ARU (Audio Response Unit)

ARU occurs when the merchant calls an appropriate authorization center, and keys in "exact" cardholder and purchase information through the telephone keypad. The authorization centers stores and records the specific data "key-entered" and an electronic voice provides the merchant with an authorization number over the phone that the merchant MUST write on the sales draft. If more than two errors are key-entered, the ARU system rolls over to a "live" operator to obtain the information. The system also rolls over to "live" operators for referrals.

Average Ticket

The average dollar amount of sales drafts processed within a given month.