Auth Fee:

Charged whenever a merchant’s credit card processing service digitally addresses an acquiring bank. The authorization fee is charged even if the transaction is declined or for some reason cancelled.

Card Present

Transactions where the card is physically swiped through a credit card terminal. The lowest rates are typically applied to card-present transactions.

Chargeback:

When a credit card holder applies for a reimbursement to his/her card issuer/bank. Chargebacks are typically the result of credit card fraud, but there are cases when a credit card holder is unsatisfied with a product or service rendered (due to shipping damages, etc.). There are around 30 reasons and circumstances, each resulting in a chargeback case.  A merchant using a merchant account will have to pay a fine, called a “chargeback fee,” to the merchant account provider or bank.  A high number of chargeback cases may lead to the acquirement of a TMF (Terminated Merchant File) status.

Chargeback Rates:

Chargebacks stem from returned or repudiated (i.e., disputed and overturned) purchases. Chargeback rates protect merchant account providers from returned merchandise or repudiated transactions.

CNP (Card not present):

A type of transaction where a credit card holder manually enters his/her credit card details. These details are instantly (if automated) and securely processed and the credit card is charged. Such transactions are used at online resources where a credit card holder is remotely located. In the case of ‘unautomated’ credit card processing, the credit card details may be passed on over the phone and by mail (due to credit card fraud risks, these have increased rates).

Debit Transactions:
Signature / Offline or PIN / Online.

Discount Rate:

A percentage-based mark-up on a transacted amount of money. For example, if a merchant account provider has set its discount rate to 2.3% and a merchant’s gateway processes a $100 transaction, the merchant will automatically be charged $2.30 by the service provider (or bank).

Downgrades:
When the merchant does not meet Visa/MasterCard requirements for a transaction, the transaction is “downgraded” to a lower level of interchange. The merchant pays a higher rate for downgrades.

Interchange:
The exchange of transactions between clearing members for Visa and MasterCard transactions, according to the associations’ operating rules and regulations. During this process, transactions are routed to the appropriate card-issuing bank.

Interchange Fees:
Fees paid by the Merchant Bank (acquirer) to MasterCard and Visa for processing transactions. These fees are paid at the time the transaction is exchanged. Fees vary based on the processing method utilized by the merchant.

Merchant:
Any business that, having met the qualification standards of MasterCard and Visa and having been approved by an acquiring member, accepts MasterCard and Visa cards as payment for goods or services.

MID:
Merchant Identification Number

Qualified Rate:
A qualified rate indicates that a transaction meets all requirements to qualify for the best rate.

Mid-Qualified Rate:
This rate applies to rewards cards and key-entered transactions. It also applies to charges batched in 24-48 hours that would have been Qualified had they been batched sooner.

Non-Qualified Rate:
A non-qualified rate indicates that a transaction did not meet any of the qualifications for the lower rates. This rate includes business/corporate cards and government cards. All paper merchants will fall to this rate. This is typically the highest rate charged.

Statement Fee:

Charged on a monthly (by default) basis for the statistical information provided by the processing bank. Statistical information includes totals, a time-stamped list of single payments, and more. Statements are useful to keep track of incomes and expenses, and are great for analysis.

T&E:

Travel and Entertainment

T&E Merchant:

Refers to merchants in the Travel and Entertainment industry, such as restaurants, hotels, or car rentals.

Transaction:
Any action between a cardholder and a merchant or member that results in activity on the account, such as a purchase, cash advance, debit or credit adjustment, etc.

Voice Authorization Center:

The place a merchant calls to get verbal approval from an issuing bank to accept a credit card. Used in cases where a merchant does not use a terminal to process transactions or where the Issuing Bank sends a message through the terminal that more information is needed on a Cardholder.