Glossary


ABA (American Banker’s Association) Routing Number
This 9-digit ABA-assigned number identifies individual banks. This number is used to facilitate the electronic routing of funds (ACH transfer) from one bank account to another.

Access Number
This is the telephone number dialed by the modem that lets a computer communicate with an online service or Internet Service Provider (ISP).

ACH (Automated Clearing House)
A processing organization networked with others to exchange (clear and settle) electronic debit/credit transactions (no physical checks).

Acquiring Bank
This is the status of a Visa/Master Card member bank that establishes and maintains the merchant relationship and processes all merchant transactions. Humboldt Bank is an acquiring bank. Contrast with "Issuing Bank."

Address Verification Service (AVS)
AVS is a tool for merchants to reduce the risk associated with non-face-to-face transactions, such as mail order or telephone order. A merchant using AVS (must have equipment that is AVS-compatible).

Articles of Incorporation
This legal document identifies the terms under which a corporation was created and identifies the principals.

Auth/Batch Fee
This is the amount of money we charge the merchant each time we issue an authorization for a transaction, and each time they "close" a batch of transactions.

Authorization
The process whereby a transaction is approved by an issuing bank, authorized agent, or Visa/MasterCard on behalf of that issuer, before the transaction is completed by the merchant via telephone or terminal.

Authorize.Net, Inc.
Authorize.Net, Inc. is the Utah-based vendor of Authorize.Net, a popular Internet protocol. They also sell eCheck.Net, an Internet-based protocol used to ACH consumer checking ac-counts.

Average Ticket Size (AVT)
The average Visa/MasterCard dollar amount of each transaction the merchant anticipates processing.

Bank Identification Number (BIN)
Visa/MasterCard assigns unique, identifying numbers to each member acquiring or issuing bank. These numbers identify parts of both credit card and merchant account numbers.

Basis Points
A "basis point" is 1/100 th of a percentage point. With regard to merchant processing, there are 50 basis points separating the Qualified and Mid-Qualified discount rates and 140 basis points separating the Qualified and Non-Qualified discount rates. Example: a merchant with a Qualified Discount Rate of 2.35% would have Mid-Qualified and Non-Qualified Discount Rates of 2.85% and 3.75% respectively.

Batch Processing
This occurs when a merchant transmits the "batch" of daily sales stored in the terminal for processing. An "open" Batch is one that is not yet "closed." To "close" a batch is to transmit the information from the merchant’s location (terminal or software) to our processor.

Browser
This is the program used by a computer to navigate the Internet. Two of the largest browsers in this country are Microsoft’s Internet Explorer and Netscape’s Netscape Navigator.

Business Financials
The three forms that are known collectively as "business financials" are: Profit and Loss Statement, Balance Statement, and Statement of Cash Flow. For the purposes of Humboldt Bank merchant processing, we are only concerned with a given merchant’s Profit and Loss Statement and Balance Statement. (Refer to Exhibit "K" in this manual.)

Business Type
Business type is determined by the way in which a business processes transactions:
Retail ­ Merchants selling tangible goods in a face-to-face environment who normally use conventional terminals and swipe transactions.

Service ­ Merchants selling services like plumbing or auto repair in a face-to-face environment, who normally use conventional terminals and may key or swipe trans-actions.
Restaurant ­ Merchants selling prepared foods in a face-to-face environment, who normally use conventional terminals and swipe their transactions.
Hotel ­ Merchants selling lodging and hospitality services in a face-to-face environment, who normally use conventional terminals and key or swipe their transactions.
MOTO ­ Merchants selling tangible goods or services in a non-face-to-face mail order, Internet or telephone order environment, who normally use software or conventional terminals and always key their transactions.
Internet ­ An Internet Merchant is one who processes transactions via the Internet. Processing transactions via the Internet means that the cardholder types their credit card information online and the transaction is processed seconds later. Buy Rate
The amount of money we charge an IC/ISO for services or transactions that are paid by the merchant. If an IC/ISO is able to sell a merchant at an amount higher than their respective buy rate, we remit a portion (referred to as "residuals) to the IC/ISO each month. The Buy Rate does not give the IC/ISO free reign to charge whatever they want over their Buy Rate; allowable amounts for fees and rates are reflected in their contract and in the User Grid.

Chargeback
A dispute process initiated by the card issuer (usually in response to the cardholder) after receipt of the initial charge or presentment from the merchant via the acquirer.

Checklister
The Checklister is the "gatekeeper" of Merchant Processing; all applications enter the system here, are reviewed for completeness, and summarized so the rest of the department can quickly figure out the status of a file.

Contingent Liability
This is the term used by underwriters and sales people to identify a situation that is created when merchants process transactions in advance of the date cardholders can expect to receive the goods or services they purchased. Travel agencies pose a contingent liability risk. Similarly, all MOTO merchants pose contingent liability risks to the bank. We limit this liability to a maximum of 90 days.

Corporate Resolution
This form is used by a corporation to designate an individual(s) as a signer(s) on behalf of the company.

Credit Report
A credit report is ordered for every signing principal on the application, and is used by under-writers to make approval decisions. Humboldt Bank purchases Experian Reports.

CVV2
CVV2 is a three-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 a transaction.

CyberCash
CyberCash, Inc., is the creator and vendor of CyberCash, a popular Internet protocol.

Cyberspace
This is a term used to describe the Internet, originally coined by science-fiction novelist William Gibson in his 1984 book, Neuromancer.

Debit Networks
The host of companies that honor card transactions and at the same time debit the card-holder’s checking account for the amount of the purchase. They are smaller, more numerous, and more likely to be only regionally accepted than their credit-based counterparts.

Direct Marketing
The method by which a merchant solicits business to a population that did not ask to be solicited (i.e. "junk mail"). It is often mistakenly confused with terms like, "mail order" and "telephone order." A merchant that sends catalogs or brochures to a mailing list of past customers is not a direct marketer, but a merchant who sends catalogs or brochures to everyone in a geographic area is a direct marketer.

Discount Rate
This is percentage fee a merchant pays Humboldt Bank Merchant Services to process a trans-action (See "Qualified Discount Rate.").

Doing Business As (DBA)
The DBA is the name the public sees, whether on a physical storefront or on the web. If the merchant has another business, then we would need a separate application for both.

Downloading
The process of transferring software or data (pictures, text, or sound) from the Internet to a computer. When you retrieve e-mail from the Internet, you are downloading it.

e-Commerce
This is a generic term denoting business done over the web and/or processed electronically.
Electronic Ticket Capture (ETC)
An ETC system reaches out and "grabs" sales ticket information electronically. Buyer information is contained on the magnetic strip on the back of the credit card. The merchant "swipes" the card through a terminal, and the buyer information is "read" by the computer system and merged with the sales information. It then processes the ticket just as if the merchant was making a manual deposit at a bank. This action is normally done in "batches" of tickets, such as at the end of the day.

Face-To-Face
A face-to-face transaction is one at which the cardholder was present. This is usually evidenced by the action of swiping a card through a terminal but may also be evidenced with a signed, imprinted draft. (See "Imprinter.")

Federal Tax ID Number
This 9-digit number is assigned by the IRS for tracking business taxes. We absolutely require a Federal Tax ID number from all applicants. Some smaller merchants that are sole-proprietors may use their personal Social Security Number in place of a
Federal Tax ID number.

First Data Corporation (FDC)
This Omaha, Nebraska-based company processes all of our merchant’s credit card transactions. This company used to be called FDR (First Data Resources) and the two names are now sometimes, if mistakenly, used interchangeably.

Frequently Asked Questions (FAQ)
This acronym is used extensively online to identify lists of questions and corresponding answers. Clicking on a link/icon labeled FAQ is a great source for problem solving.

Full Business Name
A merchant may only apply for credit card processing under a business name that corresponds to the tax ID number written on the application.

Gateway
Just as a customer must walk through a door or gate to enter a business establishment, so must customers enter electronic "gateways" before they can do business electronically.

Guarantor
We require that a personal guarantor sign almost every merchant application. By signing, this person agrees to personally guarantee (make good on) any processing losses Humboldt Bank incurs as a result of our business relationship with this merchant. This is the person or per-sons for whom we order a personal credit report for review by our underwriters. It is appropriate to think of a personal guarantor as akin to a co-signer.

Host
This is the computer on which a web site is physically located, normally the Internet Service Provider (ISP).

Hypercom
This company manufactures conventional processing terminals. Models include the T77 and T7P terminal/printer combinations and the S8 PinPad.

Hypertext Mark-up Language (HTML)
Hypertext Mark-up Language, commonly referred to as HTML is a behind-the-scenes method of formatting text that is used in most web pages.

Hypertext Transfer Protocol (http)
Hypertext Transfer Protocol tells computers how to communicate with one another.

Hypertext Transfer Protocol, Secure Connection (https)
This allows for secure communication between computers. One must have the proper pass-word (s) to get into a secure site.
IC Verify This an ETC type 7 software that is marketed by CyberCash. It is widely used.

Imprinter
The now old-fashioned manual, slide-type device used to produce an image of the raised (embossed) characters on a credit card, to a transaction slip. All merchants should have a manual imprinter for cases that demand a physical imprint.

Independent Contractor/Independent Sales Organization (IC/ISO)
These acronyms are usually attached to refer collectively to all of our registered sales representatives. These are the people we’ve contracted to sell our merchant processing services nationwide.

Integrated Point of Sale (IPOS)
This acronym refers to conventional terminals that are "smarter" and more sophisticated in that they may be set-up to communicate with like terminals owned by the same merchant ­even if they are located at different locations and with different merchant numbers.

Internet
This is a large computer network that links smaller computer networks on a world-wide basis.

Internet Service Provider (ISP)
Companies that charge a monthly fee for internet access.

Issuing Bank
An Issuing Bank is any Visa/MasterCard member bank that enters into contractual relation-ships with cardholders for the issuance of cards.

Java
Java is an object-oriented, cross platform programming language, similar to C++, that is de-signed for building applications for the Internet.

Keyed
A transaction is "keyed" when the information from a credit card is manually typed into a terminal or computer (utilizing credit card processing software like Tellan). A transaction is keyed because either the card is not present at the time the transaction is entered or the equipment being used to process the transaction can’t read the card.

Lighthouse Club
The Lighthouse Club is a Humboldt Bank membership program that terminal-using merchants may join. Membership is available for a monthly fee and entitles the merchant to discounts on supplies as well as a repair warranty on their equipment.

Link
On the internet and intranets, links may be either text or graphic/icons. Clicking on a link enables transition from one Internet site to another by clicking on the "link" with your mouse

Member Alert To Control High-Risk Merchants (MATCH)
MATCH is an electronic bulletin board used to track people and businesses whose merchant processing accounts are reported "terminated" by acquiring banks

Merchant Identification Number (MID)
Do not confuse the MID with the Humboldt Bank merchant processing account number (the 16-digit number prefixed by "419404"). This acronym refers to the FDC-assigned number that identifies the merchant to the equipment they use to process transactions. A merchant with a Humboldt Bank merchant processing account number who uses several terminals at his location would have one MID and several TID’s (See "Terminal Identification Number").

Monthly Volume (MV)
The maximum monthly dollar volume a merchant is approved to process in Visa and Master-Card transactions. The MV is important for underwriter consideration of the file and also helps to determine what type of documentation will be required with the file. (American Ex-press, Discover or any other card processing volume is never included in the calculated monthly volume.)

Modem
A modem is a device used by computers to transmit information to one another via an ordinary telephone line. Modems are rated by their respective data-transfer speed capabilities, referred to as "baud rates." A common problem/limitation that computers face is modem in-compatibility.

Online
This word is used to associate things with having a presence on the Internet or with having access to the Internet. "Going Online" means sitting before a computer and signing on to the Internet.

Personal Identification Number (PIN)
For identification purposes, PIN numbers are assigned by banks to cardholders. In this way, ATM transactions and debit card transactions may take place without a cardholder’s signa-ture.

Pinpads
Pinpads are small boxes with a 10-key pad on them. Connected to a processing terminal, they are used by cardholders to enter PIN numbers and debit card transactions.

Point of Sale (POS)
The physical location where a sale is completed. Usually used as "POS terminal" to refer to the credit card terminal (equipment).

Protocol
Protocol, in "computerspeak," is a set of conventions for formatting data in an electronic system. Quite literally, it is the "language" that allows one computer to speak with another.

Purchase Cards
Purchase Cards are credit cards for use by employees of government agencies or corporations. What makes Purchase Cards different from ordinary credit cards is that they may only be used at certain types of merchant locations.

Qualified Discount Rate
Discount rates are tiered. Following is a breakdown of these tiers and examples of corresponding situations. A Qualified Discount Rate is the rate a merchant is charged when all conditions are optimum ­ that is, when a retail transaction is card-swiped and the merchant batches-out electronically at the end of the day. (Keyed/Internet merchants can still archive Qualified rates by obtaining an AVS response plus order number, plus batching out.) A Mid-Qualified Discount Rate is charged when a retail merchant keys a transaction or does not batch-out at the end of the day. A Non-Qualified Discount Rate is charged when a merchant keys a transaction and does not batch-out at the end of the day.

Refund Policy
This is straightforward: how will the merchant ­ and to what extent will the merchant ­ guarantee products or services sold to a cardholder? We require a refund policy of each applicant, as a liberal refund/return policy may go a long ways towards reducing the number of charge-backs that a merchant receives. A separate field on the Humboldt Bank Bankcard Application/ Agreement is labeled, "Refund Policy." When filled in, this requirement is satisfied.

Scroll
Scrolling is the action of moving the computer mouse to click on arrows along side and at the bottom of the computer screen in such a fashion as to view different portions of a document on a computer monitor. It is possible to scroll up, down, and sideways.

Search Engine
Internet browsers feature several Search Engines to choose from. These are programs (Such as Yahoo and Northern Light) that "search" the Internet for web pages that contain information similar to that which you used to define the search parameter. In other words, typing, "blue dogs," will prompt the Search Engine to find and display a list of all of the web sites that contain information about, or references to, "blue dogs."

Shopping Cart
As used on the internet, a shopping cart is analogous to choosing items in a grocery store and placing them in a shopping cart for eventual purchase. Chosen items are grouped into a single purchase (Shopping Cart) so that only one electronic purchase need be completed.

Standard Industry Code/Merchant Category Code (SIC/MCC Code)
The SIC code is a four-digit, numeric identifier of merchant business types. There are thou-sands of these codes, all of them defined by VISA International in the VISA USA Merchant Data Manual.

Swipe
This is the action of physically sliding a credit card through a terminal or magnetic stripe reader that "reads" the magnetic strip on the back of all credit and debit cards. The alternate method of getting this information into the terminal is by manually keying it in. The value of swiping cannot be overstated in that it documents the physical presence of the card at the point-of-sale. By definition, all swiped transactions are face-to-face transactions.

Tellan Software
This is a non-Internet software that works exactly like a "regular" terminal in terms of how it processes (via land-phone lines). It is a versatile program that works with any PC or MacIntosh computer via PCAuthorize and MacAuthorize, their two respective products.

Terminal Identification Number (TID)
A Terminal Identification Number is used to identify a specific serial-numbered piece of equipment.

Test Transaction
A test transaction is a means for the merchant to test a terminal that has been freshly down-loaded or changed in some way. When asking a merchant to complete a test transaction, re-member the following points: •The amount of a test transaction should never exceed $0.10. •The transaction should be voided (as opposed to credited) immediately after it is completed (or at the very latest, before the merchant batches out). •The merchant should be advised that this is the only condition/time in which they are permitted to use their own credit card in their terminal.

Trade Reference
A trade reference is a business that extends credit or otherwise has a business relationship with the applicant. Put bluntly, we need to know that the applicant pays bills on time and does indeed purchase goods or services from an outside source. A trade reference is re-quested of all applicants.

Travel and Entertainment (T&E)
Properly used, this phrase refers to American Express (Amex) and Diners Club cards where a cardholder normally pays off the card each month. This is to differentiate these programs from pure credit cards. Discover is commonly lumped-in with the other T&E card types, al-though it is not technically a T&E card type.

Upload
This is the process of transferring data from one computer to another via the Internet. By definition, every time you send e-mail to someone, you are uploading it. By contrast, each time e-mail is received and read it, it has been downloaded.

URL
Uniform Resource Locator; this term describes the location and access method of a resource on the Internet. All web sites have URL’s and are commonly thought of as Internet "addresses." Most begin with, "http."

VeriFone
This company manufactures conventional processing terminals. Model names include: Tranz 380, Tranz 330, Tranz 460, the P250 Printer and the PinPad 1000.

World Wide Web (www)
The World Wide Web is a collection of electronic documents loosely knit by a concept called "hypertext." Documents connect to each other by clickable "hyperlinks." It is necessary to run a browser program to access the web.