Whether or not you are a business owner, payment processing industry terms may be quite challenging to understand. While it always comes in handy when dealing with payment processors or banks, the terms used in that industry can be a bit confusing. Below is a common list of terms that we’ve defined so you will never feel lost again! 

1. Payment processing

A company that is authorized in the processing of credit card transactions between sellers and buyers. The payment processor is often the third party and will be appointed by the merchant.

2. Payment Terminal 

A payment terminal is a device that interfaces with payment cards to make electronic fund transfers. It typically consists of a secure keypad (called a pin pad) for entering a PIN, a screen, a means of capturing information from payment cards, and a network connection to access the payment network for authorization.

3. Gateway

A payment gateway is a service used by online merchants that securely sends credit card information from a website to the credit card payment network for processing, then returns the transaction details and responses from the payment network back to the website. The payment gateway may be provided by a bank to its customers and a specialized financial service provider as a separate service, such as a payment service provider like TCB Pay.

4. P.O.S. 

P.O.S. stands for Point of Sale and refers to the place where a customer executes the payment for goods or services and where sales taxes may become payable. It can be in a physical store to process card payments (swiping, inserting, tapping, cash payment) or a virtual sales point such as a computer or mobile electronic device.

5. Acquiring Bank

An acquiring bank (also known simply as an acquirer) is a bank or financial institution that processes credit or debit card payments on behalf of a merchant. The acquirer allows merchants to accept credit card payments from the card-issuing banks within an association (Visa, Mastercard, etc.)

6. I.S.O

I.S.O stands for Independent Sales Organization. It’s a third-party payment processing company that is authorized to handle merchant accounts for businesses (like TCB Pay), it’s usually an alternative to process payments with banks.

7. Interchange

Interchange is a fee that is set by the credit card associations and paid to their member banks. Interchange is charged to credit card processors, who pass it along to merchants as part of the discount fee. It makes up the largest portion of credit card processing fees.

8. MOTO

MOTO stands for Mail Order/Telephone Order. This refers to any business that is not face-to-face with the customer, and the transactions are keyed into the terminal and are not swiped. The term mail order/telephone order comes from the fact that the credit card number is received either over the phone or through the mail, but it encompasses all transactions that are keyed no matter how they are received.

9. ACH

ACH stands for Automated Clearing House. It’s an electronic payment from one bank account to another. The transaction is initiated by a business to debit an account by submitting an ACH file. This file contains all the information and account numbers to debit the cardholder and the amounts. This file is submitted for processing nightly and passes through networks controlled by the Federal Reserve. ACH payments are not guaranteed, that is, they may bounce, and they must clear much like a check does. ACH is useful as an alternative or in addition to accepting credit cards.

10. Chargeback

Chargeback is a dispute procedure initiated by the cardholder and/or the card issuer after receipt of the initial presentment from the acquirer. Used to correct erroneous presentments or to exercise the cardholders’ rights under the applicable payment card network rules. It occurs when a cardholder disputes a transaction with the card issuer. The issuer initiates a retrieval request against the merchant account and the disputed amount is withdrawn from the account until the matter is settled.

Any questions? Contact us at support@tcbpay.com or 866 444 8585. We will gladly answer any questions you may have. We look forward to hearing from you!