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| About
E-Commerce Terms. |
Acquiring Bank / Merchant Bank |
| The
bank that does business with merchants enabling them to
accept credit cards. A merchant has an account with this
bank and each day deposits the value of a day's credit
card sales. Acquiring banks buy (acquire) the merchant's
sales slips and credit the tickets' value to the merchant's
account. Also called the acquirer. |
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Acquiring Processor |
| The processor provides
credit card processing, billing, reporting and settlement,
and operational services to acquiring banks. Many financial
institutions do not do their own bankcard processing because
it is more cost-effective to let someone invest in the
equipment and people and do it for them. |
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Aggregator |
| Organizations that provide
merchants (in many cases start-up companies) with an Internet
merchant account. Newly established companies may have
difficulty qualifying immediately for merchant services
from local banks due to the company's age, lack of transaction
history, etc. Aggregators will accept financial responsibility
for these merchants' transactions, effectively acting
as guarantor to the acquiring bank for the smaller and
newly established companies that banks may not wish to
accept directly due to the higher risk involved. Aggregators
will combine these smaller merchants under their merchant
account enabling them to participate in e-commerce. |
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Application Service Provider (ASP) |
A third-party organization that manages and distributes
software-based services and solutions to customers across
a wide area network from a central data center.
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Authorization |
The act of insuring that the cardholder has adequate
funds available against their line of credit. A positive
authorization results in an authorization code being
generated and those funds being set aside. The cardholder's
available credit limit is reduced by the authorized
amount.
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Batch |
| The accumulation of
captured (sale) transactions waiting to be settled. Multiple
batches may be settled throughout the day. |
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Brick-and-mortar |
| A traditional business
that operates by dealing with customers in a face-to-face
environment, such as an office or store |
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Browser |
| A software application
used to locate and display World Wide Web pages. NCSA
Mosaic, Netscape Navigator, and Microsoft Internet Explorer
are all browsers. |
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Business to Business Commerce (B2B) |
| Commercial transactions
between two or more businesses. B2B was originally undertaken
using EDI. XML is now the preferred solution. |
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Business to Consumer Commerce (B2C) |
| The sale of Goods or
Services to a Consumer where the transaction takes place
over the Internet. |
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Capture |
| Converting the authorization
amount into a billable transaction record within a Batch.
Transactions cannot be captured unless previously authorized
and the goods or services have been shipped or transmitted
to the consumer. |
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Card Association |
| Visaand MasterCard,
which is the licensing and regulatory agencies for bankcard
activities. |
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Cardholder |
| Any person who opens
a credit card account and makes purchases using a credit
card. |
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Card-not-present Transaction |
| A credit card transaction
in which the merchant has received the card number from
the buyer, but is unable to physically link the card to
the buyer (i.e. Mail Order/Telephone Order or online transactions).
This type of transaction carries the highest interchange
rate due to high risk factor. |
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Card-present Transaction |
| A card transaction in
which the buyer physically gives the merchant their credit
card in which to pay for the purchase. This type of transaction
carries the lowest interchange rate since the buyer is
actually present for the transaction. Also called a face-to-face
transaction. |
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Certificate Authority (CA) |
| A trusted third-party
organization or company that issues digital certificates
used to create digital signatures and public-private key
pairs. The role of the CA in this process is to guarantee
that the individual granted the unique certificate, is
who he or she claims to be. |
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Chargeback |
| A chargeback is a transaction
returned by a customer's card-issuing bank due to dispute
or non-acceptance of the transaction. |
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Clearing |
| The process of exchanging
transaction details between an acquirer and an issuer
to facilitate posting the transaction on the cardholder's
account and reconciling their settlement position. |
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Click-and-mortar |
| Click-and-mortar describes
a store that exists both online and in the physical world,
for example Barnes and Noble. |
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Consumer Fraud |
| Unauthorized use of
cardholder information such as attempts to purchase products
or services using another person's card. |
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Cryptography |
| The process of securing
private information that is passed through public networks,
by mathematically encrypting the information so that it
is unreadable to anyone except the person(s) holding the
mathematical "key" that is needed in order to decrypt
the information. |
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Data Capture |
| The collection of merchant
bank card sales receipts from the merchant's point-of-sale
terminal or electronic cash register by an electronic
means |
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Digital Certificate |
| An attachment to an
electronic message used for security purposes. The most
common use of a digital certificate is to verify that
a user sending a message is who he or she claims to be,
and to provide the receiver with the means to encode a
reply. |
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Digital Signature |
| A digital code, attached
to an electronic message that verifies the sender. Digital
signatures are especially important for electronic commerce
and are a key component of most authentication schemes.
To be effective, digital signatures must not be open to
forgery. A number of different encryption techniques use
digital signatures. |
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Discount Rate |
| The fee a merchant pays
its acquiring bank/merchant bank for the privilege to
deposit the value of each day's credit purchases. The
fee is usually a small percentage of the purchase value. |
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Disintermediation |
| Removing the middleman.
This term is used to describe the function of many Internet-based
businesses that use the World Wide Web to sell products
directly to customers rather than going through traditional
retail channels. By eliminating the middlemen, companies
can sell their products cheaper and faster. |
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Domain Name |
| An organization's Internet
address. For example, firstecom.com is the domain name
of First Ecom, the payment processor. The '.com' designation
indicates the site is for a company. Other popular suffixes
are '.org' for non-profit organizations and '.net' which
is used by organizations and businesses connected with
Internet services. Organizations may add two letter endings
to these addresses (e.g. www.microsoft.com.hk) to indicate
they are in a specific country. The '.edu', '.mil', and
'.gov' domains are traditionally reserved for government
organizations. |
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Electronic Banking (E-banking) |
| A form of banking that
allows individuals access to personal or business banking
services over a public network such as the Internet. E-banking
usually allows 24 hour access to basic banking services,
including the ability to transfer funds through personal
computers via telephone lines between financial institutions.
E-banking uses computer and electronic technology as a
substitute for paper transactions such as checks. |
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Electronic Commerce (E-Commerce) |
| The buying and selling
of goods and services on the Internet, especially the
World Wide Web. In practice, this term and a new term,
'e-business', are often used interchangeably. For online
retail selling, the term 'e-tailing' is sometimes used.
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Electronic Merchant (E-merchant) |
| A merchant that runs
his/her business electronically via the Internet. |
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Electronic Payment (E-payment) |
| The ability to effect
payment online without the physical transfer of cash or
documents, regardless of time or location. E-payment methods
include credit cards, debit cards, smart cards, e-checks,etc. |
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Encryption |
| A way of coding the
information in a file or e-mail message so that if a third
party intercepts it as it travels over a network it cannot
be read. Only the person or persons that have the right
type of decoding software (i.e. key) can decrypt the message.
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ESD |
| Electronic Software
Distribution, a system for selling software over a network.
ESD systems provide secure communications that customers
use to download and pay for software. These systems can
operate over the Internet or on a direct modem-to-modem
connection. ESD systems can also allow users to use software
for a trial period before purchasing. |
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Firewall |
| A system designed to
prevent unauthorized access to or from a private network,
usually unauthorized access from the Internet into a private
network. |
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Host(ing) |
| Web sites that are stored
on a server by an Internet Service Provider (ISP) |
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HTTP |
| Hyper Text Transfer
Protocol, the underlying protocol used by the World Wide
Web. HTTP defines how messages are formatted and transmitted,
and what actions Web servers and browsers should take
in response to various commands. For example, when you
enter a URL in your browser, this actually sends an HTTP
command to the Web server directing it to fetch and transmit
the requested Web page. |
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HTML |
| Hyper Text Markup Language,
the language used to create documents on the World Wide
Web and which governs how Web pages are formatted and
displayed. HTML defines the structure and layout of a
Web document by using a variety of tags and attributes.
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Internet Access Provider (IAP) |
| An organization that
provides access to the Internet, whether through dial-up,
cable modem or wireless. Often considered to be a subset
of Internet Service Providers. |
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Internet Point-of-Sale (IPOS) |
| Allows merchants to
safely channel and process traditional card-based transaction
data over the Internet in real-time. The transaction is
classified as a person present transaction, rather than
an Internet (i.e. person not present) sale. |
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Internet Service Provider (ISP) |
| An organization that
provides a range of Internet services such as access,
Web development, and/or Web site hosting. |
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IP Address |
| An identifier for a
computer or device on a TCP/IP network. Networks using
the TCP/IP protocol route messages according to the IP
address of the destination. The format of an IP address
is a 32-bit numeric address written as four numbers separated
by periods. Each number can be from zero to 255. For example,
1.160.10.240 could be an IP address. Within an isolated
network, IP addresses can be assigned at random as long
as each one is unique. However, connecting a private network
to the Internet requires using registered IP addresses
(called Internet addresses) to avoid duplicates. |
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Issuing Bank |
| The bank that extends
credit to customers through bankcard accounts. The bank
issues the credit card and receives the cardholder's payment
at the end of the billing period. Also called the issuer
or the cardholder bank. |
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Key |
| A password or table
needed to decipher encoded data. |
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Mail Order/Telephone Order (MO/TO) |
| A credit card transaction
where the order and payment information are transmitted
to the merchant via the mail or telephone. |
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Merchant |
| The party that offers
goods or services in exchange for payment. Merchants that
accept payment by card must have a relationship with an
Acquiring Bank. |
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Merchant Fraud |
| Fraud perpetrated against
other parties, usually the cardholder or the bank, typically
through the use of the card acceptor's payment system. |
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On-Us Transaction |
| Any electronic banking
transaction in which the acquiring member and the issuing
member are the same institution or are within the same
network facility. |
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Payment Gateway |
| An electronic application
that integrates with a merchant's Web site in order to
transmit transaction data to the payment card acquirer
for both authorization and settlement purposes. A payment
gateway accepts transactions from online merchant storefronts
and routes them to a financial institution's processing
system. |
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Payment Switch |
| The switch routes payment
card transaction data to the respective financial institution
for the purposes of approving, processing, and settling
electronic payment transactions. |
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Per Transaction Fee |
| A transaction is the
process that takes place when a cardholder makes a purchase
with a payment card. A fee is then charged on these authorized
transactions to cover necessary costs associated with
processing the transaction. |
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Personal Identification Number (PIN) |
| A number that must be
entered along with a payment card number for certain credit
or debit cards to make a transaction. The PIN functions
as a password in that it does not allow the holder to
use the card without first providing the PIN. |
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PKI |
| Public Key Infrastructure,
an entire system of digital certificates, Certificate
Authorities, and other registration authorities that verify
and authenticate the validity of each party involved in
an Internet transaction. PKIs are currently evolving and
there is no single PKI or even a single agreed-upon standard
for setting up a PKI. |
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Plug-in |
| A software module designed
to add functionality to an existing software application.
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Point-of-Sale (POS) |
| The location at of the
merchant's physical place of business where consumers
make face-to-face purchases. |
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Point-of-Sale (POS) Terminal |
| A server that is placed
in the merchant's location and connected to the banks'
systems, interfacing cardholder software and acquirer
payment systems. It is used to electronically read, authorize,
record, and transfer data to and from the merchant for
each sale. Also called a swipe box. |
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Public Key Cryptography |
| An encryption method
that uses two Keys: one key to encrypt the message and
another key to decrypt the message. The two keys are mathematically
related so that data encrypted with either key can only
be decrypted using the other. Each user has a public and
a private key, and only the public key is distributed
to parties with whom the user exchanges encrypted messages. |
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Recurring Payments |
| A type of transaction
that allows the merchant to process multiple authorizations
for the same buyer. Recurring payment can be either multiple
payments for a fixed amount or repeated billings. |
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Secure Server |
| A secure Web server
that encrypts and decrypts messages to protect them against
third party tampering. Purchases made from a secure Web
server ensure that a user's payment or personal information
is encrypted and not accessible to unauthorized persons |
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Settlement |
| As the sales transaction
value moves from the merchant to the acquiring bank to
the issuer, each party buys and sells the sales ticket.
Settlement is what occurs when the acquiring bank and
the issuing bank exchange data or funds during that function.
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Shopping Cart |
| Software that handles
an online store's catalog and ordering process. A shopping
cart is the interface between a business's Web site and
its internal infrastructure. Shopping carts allow consumers
to select merchandise from a Web page, review what they
have selected, make changes or additions, and purchase
the merchandise |
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Smart Card |
| A smart card is a credit
card with a built-in microprocessor and memory used for
identification and financial transactions. It allows electronic
money to be stored in a secure, but portable medium and
when inserted into a reader, it transfers data to and
from a central computer. |
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SSL |
| Secure Sockets Layer,
a standard that enables secure credit card transactions
on the Internet. SSL is the leading security protocol
developed by Netscape for transmitting private documents
via the Internet. SSL uses a private key to encrypt data
and then sends this over the SSL connection. Netscape
Navigator, Internet Explorer, and most commercially available
Web browsers support SSL. Many Web sites use the protocol
to obtain confidential user information. By convention,
Web pages that require an SSL connection start with https
instead of http. |
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Stored Value Card |
| A card that contains
either a computer chip of magnetic strip and is used to
store or debit money electronically. |
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TCP/IP |
| Transmission Control
Protocol/Internet Protocol, the suite of communications
protocols used to connect hosts on the Internet. TCP/IP
uses several protocols, principally TCP and IP. TCP/IP
is built into the UNIX operating system and is used by
the Internet, making it the de facto standard for transmitting
data over networks. |
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Third-party Fraud |
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Unauthorized use of payment card information by individuals,
such as hackers who have illegally obtained the card information.
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Third-party Processor |
| A company that contracts
with banks and financial institutions to perform some
or all of the tasks necessary to process payment cards,
including authorization and settlement. |
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URL |
| Uniform Resource Locator,
the global address of documents and other resources on
the World Wide Web. The first part of the address indicates
what protocol to use, and the second part specifies the
IP address or the domain name where the resource is located.
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Web or World Wide Web (WWW) |
| A system of inter-connected
Internet servers that supports specially formatted documents.
The documents are formatted in HTML, which supports links
to other documents, as well as graphics, audio, and video
files. Internet users can jump from one HTML document
to another simply by clicking on designated hot spots.
Not all Internet servers are part of the World Wide Web.
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5.0, 
4.7 & above versions.
