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NABU, APF and FANF Correct Ans - MasterCard implemented a new fee, the Network Access and Brand Usage fee (NABU). And following right on the heels of the MasterCard announcement, on July 1, 2009 Visa implemented their U.S. Acquirer Processing Fee (APF). Card brand dues and assessments Correct Ans - In addition to Interchange, each card brand includes additional fees based on the transaction amount and per transaction. These fees are called dues and assessments and typically range from 0.105% - 0.45% on the transaction amount [ $0.0025 - $0.04.] Like interchange, assessments are exactly the same for all credit card processors and no processor can give you a lower rate or a better deal on assessments. AVS and switch fees Correct Ans - The fee is charged when your business utilizes the Address Verification Service to check that the address provided by a cardholder matches the address on file with the credit card company. Authorization fee Correct Ans - The voice authorization fee applies when you use a telephone dial-up service for transaction authorization. A fee is charged for each call that is made. Voice authorization is useful in the event your terminal or software malfunctions or your internet connection isn't working. Batch fee Correct Ans - A fee that is charged when you settle your daily transactions (also known as the batch) with your credit card processor. If you have no credit card transactions to settle on a particular day, you are not charged this fee. Clearing and settlement fees Correct Ans - clearing denotes all activities from the time a commitment is made for a transaction until it is settled.
Chargeback and representment fees Correct Ans - In short, a chargeback is a reversal of funds transferred. Statement or reporting fees Correct Ans - Fees that are charged for receiving statements or reports. Rewards Cards Correct Ans - A cashback reward program is an incentive program operated by credit card companies where a percentage of the amount spent is paid back to the card holder. Card Not Present transactions Correct Ans - A card not present transaction (CNP, MO/TO, Mail Order / Telephone Order, MOTOEC) is a payment card transaction made where the cardholder does not or cannot physically present the card for a merchant's visual examination at the time that an order is given and payment effected. Quick Service Restaurants (QSR) Correct Ans - a specific type of restaurant that serves fast food cuisine and has minimal table service. Emerging Markets Correct Ans - countries in the process of rapid growth & industrialization Level 1 Data Correct Ans - Level I purchasing card data includes the same information captured during a traditional credit card purchase transaction. This includes: total purchase amount, date, merchant category code and supplier/retailer name. Level 2 Data Correct Ans - Level II purchasing card data includes the same information captured at Level I, plus the following: sales tax amount, customer's accounting code, merchant's tax ID number, applicable minority - and women- owned business status and sales outlet ZIP code.
Tiered Correct Ans - Tiered pricing gets its name from the fact that there are multiple tiers set up to determine the price associated with the transaction. Sales Volume Correct Ans - The quantity or number of goods sold or services sold in the normal operations of a company in a specified period. Transaction Counts Correct Ans - the total number of transactions that are processed within a merchant account. Average Ticket Correct Ans - Average ticket is a metric that provides details on the average amount of sales by a given customer. It is used by a range of businesses when analyzing business performance and sales activity. Authorization Fees Correct Ans - The amount of money that is charged directly to an individual merchant account each time communication is made between credit card processing software (when the sale transaction is processed online, etc.) or point of sale (POS) terminal (when the sale transaction is processed physically in person) and the authorizing network. Effective rate Correct Ans - The effective rate of a credit card processing statement is the total processing fees divided by total sales volume. Batches Correct Ans - Batch credit card processing is the practice of a merchant processing all of its authorized credit card transactions for the day after the close of business or at a time determined by the credit card processor. Chargeback Activity Correct Ans - A chargeback is a transaction reversal meant to serve as a form of consumer protection from fraudulent activity committed by both merchants and individuals.
PCI Compliance Correct Ans - The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards designed to ensure that ALL companies that accept, process, store or transmit credit card information maintain a secure environment. Internet Gateways Correct Ans - a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e- businesses, online retailers, bricks and clicks, or traditional brick and mortar. The payment gateway may be provided by a bank to its customers, but can be provided by a specialized financial service provider as a separate service, such as a payment service provider. Virtual Terminals Correct Ans - the web version of a physical credit card terminal or Point-of-Sale (POS) machine Dial-up POS System Correct Ans - Uses a dial-up connection to process payments Gift and/or Loyalty cards Correct Ans - Loyalty programs are structured marketing strategies designed by merchants to encourage customers to continue to shop at or use the services of businesses associated with each program. Check conversion Correct Ans - Check conversion is a reformatting service offered by banking merchants. Check conversion allows banks to convert paper checks into electronic ones and then send them to the appropriate receiving bank. The electronic check is forwarded on via the automated clearing house (ACH). Cash advances Correct Ans - A cash advance allows you to use your credit card to get a short-term cash loan at a bank or ATM. Unlike a cash withdrawal from a bank account, a cash advance has to be paid back — just like anything else you put on your credit card. Think of it as using your credit card to "buy" cash rather than goods or services.
Dial UP Terminal Correct Ans - A terminal that can read the track data on a magnetic stripe and communicate transaction information to the frontend platform and receives authorization instructions via the merchant's phone line usually by dialing a toll free number. IP Terminal Correct Ans - does the same thing as a dial terminal except that the terminal communicates transaction information to the frontend platform and receives authorization instructions by utilizing the merchant's connection to the internet. EMV Terminal Correct Ans - has the ability to take cardholder data from a chip embedded within the card and communicate transaction information to the frontend platform and receives authorization instructions by utilizing the merchant's phone line or Inter- net connection. Wireless terminal Correct Ans - provides the ideal solution for businesses seeking the most effective way to complete credit card transactions off-site. Most wireless credit card terminals support credit and debit transactions and are equipped with an internal PIN pad. Wireless terminals can be used on the countertop or in a mobile environment. Sale Correct Ans - for a sale, swipe the customer card or manually enter the credit card number, input sale amount, then press enter. The terminal will then transmit information through the network for approval, and a merchant receipt will be printed. Mobile solution Correct Ans - allows a merchant to accept credit cards using a cell phone with or without a card swipe mechanism. Internet solution Correct Ans - a processing method using a secure web server that provides an interface for merchant websites and shopping carts that require real-time transaction processing. Depending on the merchant's software
they can connect to a frontend via either an SSL server or payment gateway to get a real-time credit card authorization. PIN pad Correct Ans - an electronic device used in a debit or smart card-based transaction to input and encrypt the cardholder's PIN (personal identification number). The PIN pad is required so that the customer's card can be accessed and the PIN can be securely entered and encrypted before it is sent to the transaction manager of the switch or the bank. Check reader Correct Ans - a payment automation device that reads the MICR (Magnetic Ink Character Recognition) information on checks. Contactless reader Correct Ans - any pocket-sized card with embedded integrated circuits that can process and store data and communicate with a terminal via radio waves. Void Last Sale Correct Ans - to void the last sale, press the screen button next to void, choose last, verify transaction information on the display screen, then press enter. The transaction will be voided and a receipt showing the void will be printed. Credit / refund Correct Ans - to credit a refund, press the screen button next to refund, swipe the customer card, input return amount, press enter, and print merchant receipt. Header Information Correct Ans - merchant's business information Deposit Information Correct Ans - daily account of the month's transaction information Deposit Item Summary Correct Ans - a summary of the month's transactions Settlement/Discount Correct Ans - the month's transactions sorted by card type and fees associated
With Check Verifica- tion, if a check is returned to a merchant, they are typically not reimbursed by the processor. Collection efforts will be made on behalf of the merchant at an additional cost, however there is no 'guarantee' of payment on uncollected items. Therefore, this service is less expensive than Check Guarantee. Check 21 Correct Ans - this is the process of capturing a check at the point of entry (can be point of sale scanner or a picture on a mobile phone). The check image is transmitted to the issuer and paid through the settlement process. ACH Debit Correct Ans - this is the process whereby the consumer gives a pre-approval to have funds debited from either their checking or savings account. This is not a real-time transaction and can be subject to non-sufficient funds rejection. cardholder Correct Ans - an end user or consumercard issuer is any banking institution that provides credit or debit cards to a consumer. Examples of card issuers include Chase, Capital One, Bank of America and credit unions. acquiring bank (or acquirer) Correct Ans - the bank or financial institution that processes credit and/or debit card payments for a mer- chant. Examples of acquirers include HSBC and Wells Fargo. payments processor Correct Ans - a company (often a third party) appointed by a merchant to handle payment card transactions for acquiring banks. There are two types of processors: front-end and back-end. Front-end processors have connections to various card issuers and supply authorization and capture services to the acquiring banks' merchants. Back-end processors accept settle- ments from front-end processors and, via The Federal Reserve Bank, move the money from the issuing bank to the merchant bank. Examples of payments processors include Global Payments, First Data, Chase Paymentech, TSYS, and Elavon.
merchant Correct Ans - any business that accepts credit or debit cards for payment in exchange for goods or services. Examples include Amazon, Target and Best Buy. card brand Correct Ans - a network of issuing banks and acquiring banks that processes brand-specific payments. The best known card brands are Visa, MasterCard, American Express, Discover, JCB and China UnionPay. Independent Sales Organization (ISO) Correct Ans - an organization or individual registered with a card brand (Visa or MasterCard), and has a payment card relationship with an acquirer or issuer to perform functions on behalf of the acquirer or issuer (i.e., the ISO soliciting merchant accounts, arranging for terminal purchases or leases, providing customer service, and soliciting cardholders). Examples of ISOs include Total Merchant Services and North American Bankcard. service provider, more commonly known as a merchant service provider (MSP) Correct Ans - a company or organization that provides transaction processing solutions to merchants; any sales office that offers payment services to merchants. debit car Correct Ans - provides the cardholder electronic access to his or her bank account(s) at a financial institution. credit card Correct Ans - allows the cardholder to buy goods and services based on the cardholder's promise to pay for these goods and ser- vices at a later date Point of Sale (POS) terminal Correct Ans - a device that processes transactions with a debit or a credit card, via a telephone line or Internet connection, typically powered by a power cord.
typically seen where the authorization was unsuccessful but the merchant still attempts to force the transaction through. (Such may be the case when the cardholder is not present but owes the merchant additional money, such as a hotel stay extension or car rental.) Clearing and Settlement Correct Ans - The acquirer sends the batch transactions through the card brand, which debits/credits (if charge- backs and returns exceed sales for the day) the issuer for payment and credits/debits the acquirer. Essentially, the issuer pays the acquirer for the transaction. Funding Correct Ans - Once the acquirer has been paid, the acquirer pays the merchant. The merchant receives the amount totaling the funds in the batch in total or less the discount fees charged. Chargeback Correct Ans - A chargeback is an event in which money in a merchant account is held due to a dispute relating to the transaction. Chargebacks are initiated by the cardholder or the issuing bank. In the event of a chargeback, the issuer returns the transaction to the acquirer for resolution. The acquirer then forwards the chargeback to the merchant, who must either accept the chargeback or contest it. Maximum ticket Correct Ans - risk systems must monitor the average ticket and a maximum ticket. Transactions above the maximum ticket may be an indicator of misinformation during the application process, a change in the merchant product, cardholder fraud, a bust-out scheme, or perhaps collusion and should be reviewed and possible investigated. Average ticket of the merchant Correct Ans - if the application shows a $30 average ticket and you see an average ticket of $400, you should investigate to ensure they are selling what the application stated. Alternately, it could be a fraudulent cardholder transaction.
Monthly volume Correct Ans - applications typically request the average monthly volume and a peak season volume. Sales beyond these volumes may indicate risk problems or may warrant adjustments in account set up to off set merchant growth. Larger than expected volumes in the first month may be an indicator that the merchant has past sales they are trying to process, a bust-out scheme, or that the application was erroneous or false. The volume should also be balanced against similar merchants. Larger volumes than similar merchants may be an indicator of risk and should be investigated. Large dollar or excessive credits Correct Ans - monitoring credits is a good way to gauge the satisfaction of your merchant's customer with the products and/or services sold. Excessive credits may indicate money problems at your merchant. Large dollar credits may be an indicator of a merchant utilizing the card schemes to layer money amongst their various accounts. It is required that all credits have an offsetting sale. Credits without an offsetting sale may be an indicator of employee theft, merchant system hack, or a fraudulent merchant. Frequent credits for large amounts may be an indicator of money laundering. Chargeback monitoring Correct Ans - if your merchant is receiving a lot of chargebacks, you should quickly evaluate the reason codes behind the chargebacks and question the merchant's practices. Increased chargebacks may mean your merchant's business is in financial distress, is experiencing supplier issues, or has gone rogue and is committing fraud, potentially against the consumer. This is especially the case if the chargebacks are for unauthorized charges, services not received, or duplicate transactions. Percentage keyed vs. swiped Correct Ans - monitoring the percentage of swiped transactions vs. keyed transactions is a simple way to tell whether your merchant has shifted from retail to MOTO (mail or telephone order) or internet. If you see more keyed transactions than indicated and subsequently approved on the application, you should talk with your merchant to
regulations and understand the potential impact on your business. Data security Correct Ans - With the increase in merchants using point of sale systems (not just a terminal) comes an increase in the likeli- hood that you will experience a data breach at a retail merchant. Diligence should be used in ensuring software and hardware in use is PCI compliant and that your merchant follows proper procedures and guidelines for protecting cardholder data. EMV Chip Card Correct Ans - If a consumer presents a chip card and the merchant is not able to accept the card AND the consumer claims fraud, the liability is now held by the merchant. This is a new risk not previously faced by card present merchants. The details of this shift are below. Address Verification Service (AVS) Correct Ans - The Address Verification System (AVS) is a system used to verify the address of a person claiming to own a credit card. A2A (Account-to-Account) Correct Ans - The automatic transfer of funds from one account to another. An example is the Fedwire or wire transfer transaction. AAV Correct Ans - See Accountholder Authentication Value. ABA Correct Ans - See American Bankers Association. ABA Transit Routing Number Correct Ans - The unique number devised by the American Bankers Association (ABA) in 1910 that identifies the bank issuer of depository accounts. It is a 10‐digit number (nine digits and a verification digit) issued by the Federal Reserve Bank to identify each bank by a bank identification number. This number (also called the ABA number and the routing transit number) has changed over the years to accommodate such things as the Federal Reserve System, the advent of MICR, and the implementation of the Expedited Funds
Availability Act (EFAA). It is used both in check processing and in the ACH (Automated Clearing House) routing of electronic checking account debits. The number is usually the first sequence of numbers preceding an account number at the bottom of a check. Access Card Correct Ans - A plastic card used in an automated teller machine (ATM) to complete deposits, cash withdrawals, account transfers, and other related account functions. Access Control System Format Correct Ans - In the smart card industry, a term referring to the bit pattern that the reader transmits to the control panel. The format specifies how many bits make up the data stream and what these bits represent. For example, the first few bits might transmit the facility code, the next few the unique ID number, the next few parity, and so on. (Source: Smart Card Alliance). Access Device Correct Ans - A card, code, or other means of access to a consumer's account that may be used to initiate an electronic funds transfer. This term does not include the terminal, telephone, or personal computer. Access Provider Correct Ans - A company that provides its customers access to the Internet. The user normally connects to the access providerʹs server by a modem using a dial‐up connection or a broadband connection. Access Point Correct Ans - A telecommunication term referring to a device or point where connections may be made for testing or using particular communications circuits. Access Time Correct Ans - The amount of time needed to obtain information from, or place information into, computer storage. Account Aggregation Correct Ans - See Aggregators
merchants. Note: The first six digits of each number identify the issuing and acquiring institutions. See BIN. Account-Number-Verifying Terminal Correct Ans - A point‐of‐transaction terminal that may be required by Visa at specified high‐risk locations. This terminal reads the account number encoded on the magnetic stripe or embedded in the chip (smart card), compares the last four digits of the encoded account number to the keyentered last four digits of the embossed account number, and transmits the full, unaltered contents of the magnetic stripe or chip in the authorization message. Accounts Payable (A/P) Correct Ans - Debts a business owes its creditors. Accounts Receivable (A/R) Correct Ans - Debts owed to a business. Account Receivable Entry (ARC) Correct Ans - A single- entry debit initiated by an automated clearinghouse (ACH) originator to a consumer account of an ACH receiver pursuant to a source document provided by the receiver via postal mail, or at a drop box location or via electronic means. When a paper check payment is converted to an ACH electronic payment and with ARC, the check is destroyed after conversion; in POP, the check is returned to the check writer at the time of payment. These transactions flow through the ACH Network. (Source www.NACHA.org) Account Takeover Correct Ans - See Cash Theft. Account-to-Account Correct Ans - See A2A ACH Correct Ans - See Automated Clearing House ACH Fraud Correct Ans - Utilizing the automated clearinghouse network to access funds illegally. Some ACH fraud categories include: unauthorized transactions; returns/60‐day
right of recredit; consumer fraud against merchants; fraudulent use of stolen bank accounts; transaction‐level fraud; and merchant‐level fraud. ACH Network Correct Ans - The Automated Clearing House (ACH) Network facilitates commerce, electronically, by serving as an efficient, reliable and secure payments system. NACHA, led by member depository financial institutions and payments associations, fulfills this purpose by managing the development, administration, and governance of the ACH Network, and by providing superior services and value to its members as the industry association responsible for ACH payments. The ACH Network connects the originating depository financial institutions with the receiving depository financial institutions. ACH Operator Correct Ans - The central clearing facility, operated by a Federal Reserve Bank or a private‐sector organization on behalf of depository financial institutions, in which participating financial institutions transmit or receive ACH entries. ACH Regional Associations Correct Ans - The 36 regional governing bodies of the Automated Clearing House Network rules and regulations. Acquirer Correct Ans - The financial institutions that directly or indirectly enter into contractual relationships with merchants for the acceptance of plastic cards as a form of payment and for maintaining and servicing such relationships. Acquirer Fraud Activity Level Correct Ans - See Acquirer Monitoring Program. Acquirer Monitoring Program Correct Ans - A program that monitors an acquirer's fraud activity level and provides reports to the acquirer when its level exceeds established thresholds. Advices and/or Alerts are sent at predefined volumes
