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The 5 Best E-Commerce Marketing Strategies

The most effective ways to market an e commerce website:

• Pay Per Click (PPC)
• Search Engine Optimization (SEO)
• Blogging and Forums
• Electronic News Releases and Newsletters
• Utilizing Twitter and Other Social Networking Sites that are Relevant to Industry

Continue Reading 2 comments March 6th, 2009

Glossary of Terms

A comprehensive Glossary of industry-related terms and acronyms


ABA: American Banking Association
ACB: Americas Community Bankers
ACCU: Association of Corporate Credit Unions
ACH: Automated Clearing House
BIN: Bank Identification Number
CBC: Computer Based Controls
CISP: Cardholder Information Security Practices
CTA: Check Truncation Act
CUNA: Credit Union National Association
DCN: Deposit Correction Notice
DFI: Depository Financial Institution
ECC: Electronic Check Council
ECCHO: Electronic Check Clearing House Organization
ECP: Electronic Check Presentment
ECR: Electronic Cash Register
EDC: Electronic Draft Capture
EFT: Electronic Funds Transfer
EIN: Employer Identification Number
FI: Financial Institution
FMS: Financial Management Service
FRB: Federal Reserve Bank
ICBA: Independent Community Bankers of America
ISO: Independent Sales Organization
MCC: Merchant Category Code
MICR: Magnetic Ink Character Recognition
MID: Merchant Identification Number
MSP: Merchant Service Provider
NACHA: Electronic Payments Association
NACS: National Association for Check Safekeeping
NAFCU: National Association of Federal Credit Unions
NCN: National Check Network
ODFI: Originating Depository Financial Institution
PIN: Personal Identification Number
PNREF: Payment Network Reference ID
POP: Point of Purchase
POS: Point of Sale
RCK: Re-presented Check
RDFI: Receiving Depository Financial Institution
RTN: Routing Transit Number
SBA: Small Business Administration
SIC: Standard Industry Code
SSL: Secure Socket Layer
TID: Terminal Identification Number
VAR: Value Added Reseller


ABA number- The American Banking Association routing number is a 9-digit bank-identifying number. This number is found at the bottom of a check generally between colons and directs ACH deposits to the correct bank.

Accounts Payable- Debts your business owes to a creditor.

Accounts Receivable- Debts someone owes to your business.

ACH transaction- A transaction that electronically moves funds between banks.

Acquirer- A financial institution affiliated with Visa/MasterCard that processes credit cards for merchants.

Acquiring Bank- The financial institution that maintains merchant accounts. The acquiring bank directly receives credit card transactions from the merchant and deposits daily totals and debits monthly processing fees.

Address Verification Service (AVS) – A fraud prevention method of verifying a cardholders billing address against the issuers records. Used mainly with card-not-present transactions. It returns an authorization result that indicates the accuracy of the address match to secure a favorable interchange rate.

Adjustment- The dollar amount credited or debited from a merchant account by the acquirer to correct a processing error, such as a duplicate transaction.

Affidavit- A sworn statement by a customer stating that an ACH transaction was unauthorized or that the authorization was revoked. Â Â

American Express- A competitor to Visa & MasterCard who issues cards and acquires merchant transactions.

Approval- Given to a transaction by the cardholders bank. Approvals are one type of authorization response.

Arbitration- The procedure used when there is a chargeback dispute between two parties. Arbitration is used to determine who is responsible for a transaction.

Audit- The process of reviewing the financial accounts, records, and accounting methods of an individual.

Authenticate- To verify the identity of a consumer for a card-not-present transaction.

Authorization- The process of verifying a credit card. A merchant requests to charge a credit card and receives a code when the financial institution verifies the funds and approves the transaction.

Authorization Code- A code sent to a merchant via electronic message that indicates the approval of a transaction. This code should be printed on the sales draft.
Authorization Response- The reply to an authorization request sent to a merchant from the financial institution. Responses include Approval, Decline, Call Center (authorization pending a phone call).

Automated Clearing House (ACH) – A nationwide network backed by the Federal Reserve System in order to transfer funds electronically between banks.

Average Ticket- The average dollar amount of a sale found by dividing the total sales volume by the total number of sales for a period of time.


Bankcard- A credit card issued through a financial institution that is affiliated with Visa or MasterCard.

Bank Identification Number (BIN) – The numbers on a credit card that identify the issuing financial institution.

Batch- The group of captured credit card transactions that a merchant submits for settlement.

Batch ID- The number assigned to a batch of settled credit card transactions.

Batch Processing- Processing transactions in groups called batches instead of obtaining individual authorizations.

Batch Settlement- To transfer funds from a settled batch of transactions into a merchants account. This takes anywhere from 1-5 days depending on the acquiring bank.

Better Business Bureau (BBB) – A national organization whose code of ethics and programs ensure trust between members (businesses) and consumers.Â

Bundled Rate- See Flat Rate


Cancellation Code- The code that a merchant gives a cardholder to confirm that a reservation has been cancelled.

Capture- Submitting a credit card transaction for settlement so the merchant can receive funds for the transaction.

Cardholder- The person to which a credit card is issued.

Cardholder Information Security Program (CISP) – Enforced standards of protecting cardholder information.

Card Issuing Bank- A financial institution who offers issues credit cards to cardholders.

Card-Not-Present- Transactions that take place without the customers card present. Credit card data must be manually entered by the merchant.

Card-Present- Transactions that take place with the customer and credit card present. Credit cards magnetic stripe is swiped through a terminal.

Cash Flow- The difference of the merchants incoming and outgoing money.

Chargeback- The reversal of a settled credit card transaction by an issuer. Chargebacks are disputes of one or more transactions and initiated by the cardholder or the cardholders bank.

Chargeback Period- The length of time during which a card issuer can charge a transaction back to the merchant. The issuer can initiate a chargeback within 180 days after the transaction is settled.

Chargeback Reason Code- A 2-digit code that specifies the reason for a chargeback.

Check- A negotiable demand draft drawn on a bank, a Federal Reserve Bank, the Treasury of the U.S., a state government, or other financial institution.

Check Authorization- Validating a checks routing and account number to confirm a check writer and his/her account is in good standing.

Check Debit- The process of converting a paper check into an electronic transaction in order to debit funds from a checkwriters account to the merchants account.

Check Guarantee- A service that guarantees a checkwriters payment and takes on collection risks for a merchant.

Check Safekeeping- When a financial institution keeps an account holders checks, sending them an image of the check instead.

Clearing House- The organization that collects, sorts, and distributes information in order to settle a transaction.

Close Batch- The act of submitting a batch of transactions for settlement.

Code 10 Authorization- When a merchant suspects that a credit card is stolen or fake, they call their voice authorization number and request a Code 10. The operator gives the merchant instructions on how to proceed without alarming the customer.

Collateral- Property offered up in order to secure a loan or credit. Collateral is seized by the loan issuer upon default.

Commercial Cards- Credit cards issued to businesses to cover business expenses like travel. Also known as a Corporate Card.

Commercial Credit- Short-term credit given to a customer by a merchant to pay for the merchants goods or services.

Composite Receivers File- A directory of all RDFIs served by an ACH operator.

Confirmation Letter- The letter sent to a merchant from the credit processor to verify batch deposits.

Consumer- The person who purchases a merchants goods and services with payment methods like cash, checks, or credit and debit cards.

Consumer Account- The deposit account held by a consumer for personal use.

Controlled Disbursement- A bank service that notifies a company of funds waiting to clear on a given day. The company then funds the account with the correct dollar amount in order to clear the funds.

Conversion- The process that converts a paper check into an electronic debit or credit payment to the merchant.

Credit- The process of refunding the amount of a transaction back to a customer.

Credit Bureau- An organization that gathers information about a consumer or merchants finances. This information is then sold to businesses and lenders in order to approve loans and sales to that consumer or merchant.

Credit Rating- A rating based on a consumer or merchants history of re-paying loans. A credit rating is used to determine a consumer or merchants chance of getting a future loan.


DDA Account- A merchants Demand Deposit Account to which settled transaction amounts are deposited.

Debit Card- A bankcard used by a consumer to purchase goods or services whose funds are directly withdrawn from the consumers checking account. Debit cards allow the customer the option to enter their personal identification number (PIN).

Decline- A response from a credit cards issuing financial institution when a transaction is not authorized.

Delayed Capture- A transaction where the information from an authorization is saved by the merchant to capture funds at a later point. This is typically used by merchants who do not immediately ship goods to a customer.

Delayed Settlement- The two-part processing of a customers order with an authorization transaction and a delayed capture transaction.Â

Demand Deposit Account- See DDA Account.

Deposit Correction Notice (DCN) – Debit or credit adjustments made by the merchants acquirer in order to correct a balance.

Depository Financial Institution- The financial institution that receives deposits from customers or credits from the Federal Reserve Bank.

Disclosure- The terms and conditions for refunds, cancellations, or modifications of reservations.

Discount Rate- The percentage of a merchants transactions that the acquirer charges the merchant for settling the transactions.Â

Draft- A merchants record of goods or services purchased by a customer.


E-check- An ACH debit to a consumer account for transactions that originated via the internet, phone, at the point-of-sale, or by mail.

E-commerce- Business conducted between computers via the internet, Electronic Data Interchange, or Electronic File Transfer.

Edit Rejects- The rejection of a sales draft by Visa or MasterCard after the transaction is paid by the acquirer but before it is processed through interchange.

Electronic Cash Register (ECR) – A point-of-sale terminal and cash register that is usually PC-based.

Electronic Check- A term used to refer to one of the following types of electronic transactions: ACH-based electronic check (paper check converted into an ACH debit), electronic network check (paper check converted to a payment through an ATM or credit card network), internet-based payments, or telephone-based payments.

Electronic Check Council- Council that works to improve check clearing and collection processes.

Electronic Data Capture (EDC) – The electronic (paperless) process of authorizing, capturing, and settling a transaction.

Electronic Funds Transfer (EFT) – The electronic (paperless) process of transmitting money through a computer network.

Electronic Payments Association (NACHA) – Establishes rules and standards for the exchange of ACH payments by financial institutions.

Employer Identification Number (EIN) – A number assigned by the IRS to a business after the merchant files an SS-4 form. Merchants then use the EID on all business tax returns and other business-related documents.

Equity- The numeric value of a business found by subtracting the total business debts from the businesss current market value.

Escrow- An account where money is held until a specific event takes place. An escrow account is a way to exchange agreed upon services for money between two parties.

Expense Account- An account used by business people only for business-related travel and entertainment costs.


Financial Institution (FI)- Any bank, credit union, savings and loan, or other institution organized by state or national laws that is capable of accepting deposits and making loans.

Fleet Cards- Private label credit cards designed for repairs, maintenance, and fueling company vehicles.

Floor Limit- The minimum dollar amount of a purchase for which merchants must get authorization.


Imprint- The physical impression of a customers credit card to prove that the credit card was present at the sale. The imprint appears on the sales draft.

Incubators- Organizations that offer resources to entrepreneurs such as financial help and training.

Independent Sales Organization (ISO) – Organizations the represent acquiring banks and set up credit card merchant accounts for the bank.

Interchange- The exchange of transaction and credit card information between acquirers and issuers.

Interchange Fee- The fee charged by Visa/MasterCard for entering transactions into interchange. The interchange fee is a transaction fee and percentage of the transaction amount.

Internet- The world-wide network of computers that exchange information electronically.

Internet Merchant Account- An account for merchants who sell goods and services over the internet and accept credit cards as payment.

Internet Payment Gateway Service (IPGS) – Provides merchants the ability to process payments via the internet.

Internet Service Provider (ISP) – A company that provides individuals with internet access.

Intranet- An internal network of computers that can only be accessed by other computers on the same network.

Issuer- A financial institution that issues credit cards to customers.


Leverage- When a business purposefully takes a debt in order to expand that business.

Lien- The process of holding someones property against a debt. If the debt cannot be repaid, the property is seized or sold.

Line Of Credit- An amount of money loaned to a business by a financial institution over a specific period of time.

Lockbox- Where customers sometimes mail payments so that a merchants financial institution or processor can quickly secure and process the payments.


Magnetic Ink Character Recognition (MICR) Line- The characters at the bottom of a paper check that represent the routing number of the customers financial institution, the customers account number, and the check number. The characters are printed in magnetic ink for check reading by machines.

Magnetic Stripe- The strip of magnetic tape on the back of a credit card that contains account and cardholder information.

Mail Order/Telephone Order (MOTO) – Card-not-present credit card transactions via mail, telephone, or the internet.

Manual Close- A batch close that is initiated by the merchant.

Manual Entry- Payment information entered into a merchants terminal by hand.

MasterCard- An association of banks that handles the issuing and acquiring of MasterCard credit card transactions.

Member- An issuer who is a member of Visa USA or MasterCard International.

Merchant- A customer of an acquirer who accepts credit and debit cards as payment for goods and services.

Merchant Agreement- An agreement between a merchant and a financial institution.

Merchant Bank- The acquiring bank.

Merchant Category Code (MCC) – The 4-digit code from an issuer assigned to a merchant to identify the merchants line of business. Also called the SIC code.

Merchant Identification Number (MID) – The number issued to a merchant by an acquiring bank to identify a merchants transactions.

Merchant Service Provider (MSP) – a third party processor that solicits and helps merchants on behalf of an issuing bank.


NACHA- See Electronic Payments Association

Network- The company that authorizes and captures credit card transactions, a processor.

Non-Qualified- A transaction that interchanges at a higher rate because of manual entry, long settlement period, or missing data.


Open To Buy- The amount of available credit on a cardholders credit card account.

Operator- A central facility that distributes and settles ACH transactions electronically.

Original Draft- The original copy of the sales draft and signature for a transaction.

Original Transaction ID- The transaction ID used to process a secondary transaction like delayed capture, credit, or void.

Originating Depository Financial Institution (ODFI) – The financial institution that sends ACH transactions through the ACH network on behalf of customers.

Originator- A third party business that enters transactions into the ACH network on behalf of a customer.

Overhead- Business expenses that are not directly connected to a merchants line of business, like property taxes, utilities, lease, and insurance.


Participant- A person who shares in a given activity.

Payment Network Reference ID (PNREF) – The unique transaction ID number used to identify a transaction.

PC- Personal computer.

PC Software- A program designed to perform a function on a PC.

Peripheral- An external device that attaches to and is controlled by a PC.

Personal Identification Number (PIN) – Number that must be keyed by cardholder during ATM or debit transactions to prove cardholders identity.

Plug-and-play- The process of adding a peripheral to a PC where no manual configuration is required.

Point Of Purchase (POP) – Location where payment for goods or services takes place where both the merchant and customer are present.

Point Of Sale (POS) – Location and time of a transaction where the customer is present. Also refers to the machines used to capture transactions.

Post Authorization- A transaction that receives voice authorization.

POS Terminal- The machine merchants use to authorize, capture, transmit, and store all point-of-sale transactions.

Posting- The process of recording debit and credit activity to a cardholders account.

Pre-Notification- Notification to the RDFI that the originator intends to initiate an entry to the receivers account according to the receivers authorization.

Prior Authorized Sale- A transaction whose authorization took place earlier, often used for reservations.

Processor- The company that processes credit card transactions and settles funds electronically via bankcard networks on behalf of an acquirer.


Qualification- A transactions interchange level based on different criteria.


Real-Time Processing- Processing internet transactions at the exact time a cardholder enters data through a secure payment gateway.

Receipt- A summary of a point-of-sale transaction given to a customer.

Receiver- Anyone who authorizes credit or debit entries to a transaction account at an RDFI.

Receiving Depository Financial Institution (RDFI) – A financial institution which receives ACH entries and provides depository account services to customers.

Recurring Transaction- A transaction where permission is given to a merchant to continually charge a customers credit card or checking account.

Regulation CC- The Federal Reserve Boards regulation that mandates the time limit for fund availability on deposited items.

Regulation E- The Federal Reserve Boards regulation that mandates customer rights and obligations regarding electronic fund transfers.

Reserve Account- An account some merchants must obtain from a processors sponsoring bank in order to lower the risks of processing merchant transactions.Â

Response Code- The letter that indicates a transactions approval or decline.

Result Code- The digits indicating the result of a transaction, from 0 for approved transactions to a variety of codes for declined transactions.

Retail Customer- A consumer who pays for a good or service at a retail point-of-sale.

Retrieval Request- A request for documentation of a transaction that a merchant must provide during a dispute or similar situation.

Return Processing- Process of returning and settling funds for checks that were not honored by the RDFI and returned to the ODFI.

Routing/Transit Number (RTN) – The 9-digit number which identifies a financial institution.


Sale- a transaction between a merchant and a consumer.

Secure Payment Gateway- The company whose system enables electronic payments over the internet.

Secure Sockets Layer (SSL) – The Secure Payment Gateways security technology that encrypts payment information for secure processing.

Settlement- The process of routing captured transactions and electronically depositing them to a merchants account.

Shopping Cart Software- The software used to gather cardholder information for payments online.

Small Business Administration (SBA) – The government agency dedicated to helping entrepreneurs.

Smart Card- A type of credit card that stores account information electronically within the card.

Software- A PC, terminal, or internet application used to process transactions.

Sole Proprietorship- A business over which the merchant has complete responsibility.

Standard- The lowest level of qualification in which a transaction can interchange.

Standard Entry Class Code- The 3-letter code that identifying the class of ACH transaction. CCD, POP, POS, PPD, RCK, TEL, TRC, TRX, WEB, XCK are all standard entry class codes.

Standard Industry Classification Code (SIC) – The 4-digit merchant category code number.

Surcharges- Additional charges to a merchants standard processing fees.

Suspended Batch- Occurs when a batch of transactions cannot be released to interchange because of a problem.

Swiped Card- Used in card-present situations where the credit card information is transferred from the magnetic stripe to a card reader for authorization.


T & E Cards- Cards used by businesses for travel and entertainment expenses.

Tax Identification Number- A state department number issued to businesses so they can buy items at wholesale without paying sales tax.

Tender Type- The type of payment used in a transaction like credit card, check, currency, ACH, etc.

Terminal- Machine used to capture, transmit, and store credit card transactions.

Terminal Identification Number (TID) – The number assigned to a specific point-of-sale terminal.

Third Party Processor- Processor employed by an acquiring bank that processes transactions for the banks merchant.

Transaction- The exchange of goods or services for payment between a merchant and a consumer.

Transaction Fee- The fee charged to merchants for each transaction.

Transaction ID- The number that identifies each processed transaction.


Unsettled Transactions- Captured transactions that are awaiting settlement.


Value Added Reseller (VAR) – A third-party vendor that modifies a merchants existing hardware or software to add value to the services that a processor provides.

Venture Capital- Money available to invest in new enterprises.

Verified by Visa- Visas online security program that lets consumers choose a password for their Visa credit card to increase security of online payments made with that card.

Visa- An association of financial institutions that handles the issuing and acquiring of Visa credit card transactions.

Voice Authorization- An authorization resulting from the merchant calling the cardholders issuing bank to complete the transaction over the phone.

Void- The reversal of a transaction that has been authorized but not settled.


Zero Liability- Visas policy that eliminates consumer liability in the event of Visa credit card fraud.

Add comment May 25th, 2007

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