Merchant Resources

In an effort to provide transparent processing services, we are committed to the continuing education of our customers. Below is a list of industry-related terms used throughout our website. Additional information, such as a detailed break-down of the Payment Card Industry Data Security Standards (PCI DSS) can be found on our resources section as well.

Industry Glossary

Average Ticket Size (AVT):

The average dollar amount of each transaction entered by the merchant.

Address Verification Service (AVS):

Visa and MasterCard both offer an address verficiation service, allowing merchants to reduce the risk associated with card not present transactions, such as mail order, telephone order or Internet transactions. The billing address given by the customer is checked against the billing address on file at the customer's card issuing bank.

Card Verification Value (CVV/CVV2):

CVV2 is a three to four digit security code that is printed on the back of most credit cards. The CVV2 program is designed to reduce fraud in the card not present environment by validating that a genuine Visa/MasterCard credit card is being used during the transaction.

Chargeback:

A chargeback occurs when a cardholder disputes a transaction made on their credit card. Chargebacks are often the result of fraud, stolen cards, or disputes between customers and merchants, where customers are disatisfied with the product or no product was delivered to them. Merchants are given the ability to dispute the chargeback by providing the issuing bank with proof of purchase and/or delivery.

Discount Rate:

A mandatory fee credit card processing fee taken by the processor as a percentage of all sales transactions. For example, a 3.00% discount rate would equal a fee of $0.60 on a $20.00 transaction. Discount rates are based on interchange rates, a schedule of rates paid directly to the card's brand being processed (such as Visa).

Gateway:

A gateway connects shopping cart software with the credit card processor. The shopping cart initially sends the transaction to the gateway, which then replies to the shopping cart with an approved or declined set of results.

Merchant Account:

A merchant account is a relationship between a business and an issuing bank / processing company, which allows the business to accept credit card payments from customers via the Internet or through in-store terminals.

Monthly Minimum:

A monthly minimum is the lowest amount of discount rates and transaction fees that can be expected out of a merchant. If the minimum is not met due to low amount of transactions, the merchant will be charged the monthly minimum amount.

Safety Deposit & Rolling Reserves:

Some processors and banks require new merchants to provide a safety deposit, which is used as collateral in the event of chargebacks. Rolling reserves, which act as a safety deposit, are collected as a percentage of each transaction processed and returned to the merchant after a specified period, generally around six months.

Transaction Fee:

A transaction fee is a small fixed-fee charge for each transaction performed. Transaction fees often include services such as address verification that would have otherwised been charged separately.