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Cancellation Code

A cancellation code is a code issued by a merchant to confirm a cardholder’s cancellation of a hotel or car rental reservation. Cancellation codes provide a unique reference to that cancellation request that can be referred to later in case the cardholder is charged in error for the canceled reservation.

Capture Only

A capture only transaction is a request to capture funds for a credit card transaction that was authorized outside of the payment gateway. Merchants typically use a telephone authorization to submit a previously assigned authorization code from an issuing bank. Note that this differs from a prior authorization capture, which is used following an authorization only transaction.

Card Association

A card association is a group of banks or other financial institutions that licenses credit cards and processes their transactions. Card associations are more commonly referred to as card networks. The two largest of these are Visa and Mastercard. These networks facilitate all transactions conducted with their cards.

Card Imprint

A card imprint is a record of a customer's credit card maintained by a merchant. The term comes from the days before computer payment terminals, when merchants would use a mechanical device to take an imprint of the raised card number on a sheet of paper. Modern point of sale terminals instead take a digital imprint of the card.

Card Network

Card networks are the organizations that create and manage credit card networks. These networks may also be referred to as card brands or card associations. The major credit card networks in the United States are Visa, Mastercard, American Express, and Discover. American Express and Discover also act as issuing banks in addition to card networks.

Card Not Present (CNP)

A card-not-present (CNP) transaction is one in which credit or debit card information is being used to make a purchase without the presence of the physical card. Online purchases are the most common form of CNP transaction, but the term also covers phone and mail orders. The opposite of a CNP transaction is a card-present (CP) transaction. Read more >>>

Card Present (CP)

A card-present (CP) transaction is one that's made with a physical credit or debit card rather than by conveying the card information. Card-present transactions include those made by inserting the card into a payment terminal to scan the EMV chip as well as those made using contactless cards. Due to the added security of these payment methods, card-present transactions don't expose merchants to liability for fraud as much as card-not-present (CNP) transactions do.

Card Reader

A card reader is a terminal that permits the payment information stored on a card’s magnetic stripe or EMV chip to be read and used to process a payment. Card readers may be built into point-0f-sale terminals or may be standalone devices. The card reader typically sends the card information to the merchant's payment gateway, which then transmits that information to a payment processor.

Card Testing Fraud

Card testing fraud occurs when a fraudster with access to multiple stolen credit card numbers attempts small transactions with each to determine which are still valid. This is often done through the use of automated software made for this purpose and sold or otherwise distributed on the dark web. Read more >>>

Card Verification Value (CVV2)

A card verification value or CVV2 is a three or four-digit security code found on credit cards that is separate from the card number itself. It may also be referred to as a card security code or CSC. This number can be used in online payments to verify that the card number wasn't obtained from a compromised database of customer information, since merchants are prohibited from storing CVV2 numbers. Read more >>>

Cardholder

The cardholder is the person to whom a bank issued a particular credit or debit card. For most purchases, the cardholder and the customer will be one and the same. When fraud occurs, however, the customer is the perpetrator of the fraud while the cardholder is the victim. In these cases, the cardholder will file a chargeback to recover the stolen funds. Read more >>>

Cardholder Authentication Programs

Cardholder authentication programs are security processes that protect merchants by verifying a customer’s identity. The two largest cardholder authentication programs are Visa Secure and Mastercard Identity Check, which are both implementations of 3-D Secure 2.0. These programs ask the issuing bank to verify the legitimacy of a transaction or, if unable to do so, confirm the customer's identity through a one-time-password. Read more >>>

Cardholder Dispute

A cardholder dispute is the process by which a cardholder claims a charge on their account is illegitimate and requests a chargeback, which may be granted by their issuing bank. Cardholder disputes should only be filed in cases of true fraud or when a merchant has failed to uphold their end of the sales agreement and refuses to provide a refund. Unfortunately, many cardholder disputes are filed based on false claims. Read more >>>

Card-On-File Transactions

Card-on-file transactions are debit or credit card payments made using payment credentials stored by the merchant. The most common use of card-on-file transactions is for the recurring charges associated with a subscription. However, customers who make frequent purchases from a merchant may wish to have that merchant store their payment credentials for the sake of convenience, eliminating the need to scan their card or enter their payment information for each transaction. Read more >>>

Cart Abandonment

Cart abandonment refers to situations where an e-commerce customer places one or more items in their cart for purchase, then leaves the site without completing the checkout process. Cart abandonment often occurs when a customer reconsiders their purchase due to the price of the items, the cost of shipping, or the estimated shipping time. Some customers may also leave out of annoyance with a lengthy or complicated checkout process. Read more >>>

Cash Back Debit Transaction

A cash back debit transaction is a purchase made with a debit card that includes an additional charge for an equivalent amount of cash that will be disbursed by the merchant. Cash back is provided as a voluntary service by merchants, so availability and limits may vary. The cash back amount is recorded separately from the purchase amount in case of a chargeback on the purchase. Read more >>>

Cash Disbursement

A cash disbursement is a payout of funds in cash. In the payments industry, the term typically refers to a withdrawal made from an ATM or a cash back transaction. These transactions can typically only be made with debit cards, not credit, and are often subject to different rules than ordinary purchases. Read more >>>

Chargeback

A chargeback is a process through which an issuing bank debits funds from a merchant's account in order to return them to the cardholder. Chargebacks typically occur when the cardholder has claimed that the charge was unauthorized or that the merchant failed to deliver the product or service that was purchased. Merchants can fight chargebacks using evidence that the reason for the dispute is false or invalid. Read more >>>

Chargeback Accounting

Chargeback accounting is the task of recording and reconciling the various transactions involved with chargebacks. In addition to the chargebacks themselves, this includes chargeback fees, chargeback reversals, and various hidden costs. The variety of ways in which chargebacks can impact a merchant's bottom line can make fully accounting for their true cost a difficult task, and the fact that a single dispute can stretch out for months can sometimes create issues. Read more >>>

Chargeback Alerts

Chargeback alerts are a system designed to notify merchants of potential chargebacks before they occur, allowing the merchant to prevent a chargeback by issuing a refund instead. The two major chargeback alert networks are Verifi and Ethoca. Each network includes a large number of issuing banks, with some banks included on both networks. Read more >>>

Chargeback Arbitration

Chargeback arbitration occurs when the merchant and the issuer are unable to resolve a chargeback dispute. In arbitration, the card network steps in to review the evidence and make a final decision on the case. The losing party will be charged hundreds of dollars in arbitration fees, which means escalating a case to arbitration is rarely the correct choice for merchants. Read more >>>

Chargeback Automation

Chargeback automation is a system that responds to chargebacks automatically based on rules set up in advance by the merchant. This reduces the need for merchants to review and respond to straightforward cases, but can cause problems if tasked with responding to more complex situations. Chargeback automation typically works best when used in combination with human expertise. Read more >>>

Chargeback Fees

Chargeback fees are the fees merchants must pay to their payment processors whenever they receive a chargeback. The amount of a chargeback fee will vary widely based on the merchant and the processor involved. Unlike the funds for the transaction itself, chargeback fees are not refunded if the merchant successfully reverses a chargeback. Read more >>>

Chargeback Fraud

Chargeback fraud occurs when a customer disputes a charge on their account under false pretenses. These illegitimate chargebacks may result from confusion, ignorance, or a deliberate attempt at deception. Merchants can fight chargeback fraud through the representment process by providing evidence proving the charge was legitimate. Chargeback fraud may also be referred to as friendly fraud. Read more >>>

Chargeback Insurance

Chargeback insurance is a product that reimburses merchants for the cost of a chargeback if certain conditions are met. These policies are usually paid for through a percentage fee on each transaction. Chargeback insurance is often tied to a fraud prevention tool that automatically rejects transaction attempts it deems to be potentially fraudulent. Read more >>>

Chargeback Notifications

Chargeback notifications are messages a merchant receives informing them that a chargeback has occurred or will soon occur. Standard notifications are sent by the issuing bank when it initiates a chargeback, informing the merchant's acquirer of the situation. Merchants who use chargeback alerts can be notified of impending chargebacks before they occur, giving the merchant time to preempt them with refunds. Read more >>>

Chargeback Period

The chargeback period is the length of time during which a cardholder can dispute a charge on their account. Each card network sets its own time limits, and these limits may also vary depending on the reason for the chargeback. However, the most common chargeback period is 120 days, measured from the date of the transaction.

Chargeback Ratio

A chargeback ratio is the number of chargebacks a merchant received divided by the number of total transactions. A merchant's chargeback ratio is usually calculated on a monthly basis. Card networks and acquirers impose penalties for merchants who have high chargeback ratios, so merchants are generally advised to keep their chargeback ratios below 0.9%. Read more >>>

Chargeback Reason Code

Chargeback reason codes are alphanumeric codes established by the major card networks that indicate the reason a chargeback was filed. When filing a chargeback, the issuing bank chooses a reason code from the list for the applicable card network. Reason codes give merchants information about the cause of a chargeback and what evidence would be needed to reverse it. Read more >>>

Chargeback Rebuttal Letter

A chargeback rebuttal letter is the cover letter of a chargeback representment package. It summarizes the merchant's case for why the bank should reverse the chargeback and the supporting evidence included in the package. Rebuttal letters should be concise and convincing, ideally confined to a single page if the content allows. Read more >>>

Chargeback Reconciliation

Chargeback reconciliation is the process of balancing the books when chargebacks are involved. In accounting, two sets of records are kept and periodically compared with one another through reconciliation in order to check for errors. The often complex and lengthy series of debits and credits involved in a chargeback dispute presents unique challenges that require consideration. Read more >>>

Chargeback Threshold

A chargeback threshold is an upper limit to a merchant's chargeback ratio that, if exceeded, will lead to consequences from the card network, processor, or acquirer. Chargeback thresholds usually include a chargeback ratio and an overall number of chargebacks to account for situations where a small merchant might exceed the ratio based on just one or two chargebacks. Read more >>>

Check 21

Check 21 is a shortened term for the Check Clearing for the 21st Century Act, which allows banks to create images of customer checks that can be submitted electronically. These images are known as substitute checks. This eliminates the need to physically transport paper checks between banks.

Check Verification

Check verification is a process that compares an electronic check against a high-risk or bad check database. This is usually done through a third-party check verification service. A more specific form of check verification can be done manually by calling the bank and giving them the routing number account number, and amount on the check to confirm that the funds are available.

Clean Fraud

Clean fraud refers to fraud that can't be detected by the most common methods of fraud prevention. Tools like AVS and CVV matching can spot transaction attempts that don't have the appropriate supplemental information: the billing address and the security code, respectively. However, there are a number of ways fraudsters can get their hands on the complete card information, allowing them to pass these checks. Read more >>>

Clearing

Clearing is the process that acquirers and issuers use to settle a transaction. Often taking place long after a transaction has been authorized and submitted, clearing is the part of the process where the funds are actually transferred from one account to another. For most ordinary purchases, the funds are transferred through either an automated clearing house (ACH) or a credit card network.

Co-Branded Card

A co-branded card is a credit card that's jointly issued by a merchant and a credit card network. These cards often allow cardholders to make purchases anywhere cards from that network are accepted, but offer special rewards and incentives for making purchases from the applicable merchant. Co-branded cards were originally developed by airlines to reward frequent flyers for brand loyalty.

Code 10 Authorization

A code 10 authorization is a phone call merchants can make to an issuing bank to alert them of suspected fraud without tipping off the customer. When a merchant makes a code 10 call, the bank representative will ask a number of yes or no questions in order to gain an understanding of the situation. They will then instruct the merchant on how to proceed. Read more >>>

Commerce Server

A commerce server is a server with software designed to operate an e-commerce store. The services it provides may include credit card processing, inventory management, a shopping cart system for customers, and a checkout page, among others. A number of technology companies provide commerce servers, with the most well-known provider being Microsoft.

Consumer Clarity

Consumer Clarity is a system allowing issuing banks to access detailed transaction information when a cardholder is questioning or disputing a charge on their account. The information is sent automatically from the merchant's CRM to the bank in order to clarify the nature of the transaction for the customer. Consumer Clarity is offered by Mastercard through their subsidiary Ethoca. Read more >>>

Corporate Card

A corporate card is a credit card issued to an employee of a company to allow them to pay for certain work-related expenses without needing to file for reimbursement. Employees who travel frequently are often issued these cards to pay for meals, transportation, and other expenses. Corporate cards may also be referred to as commercial cards.

Credential Stuffing

Credential stuffing is a brute force attack that uses an automated system to make a large number of login attempts in an effort to compromise one or more accounts. The traditional form of this attack involves trying different passwords for an account with a known username. A more modern method involves taking a known username and password stolen from a low-security website and entering it into a large number of higher-security websites. Read more >>>

Credit Card

A credit card is a payment card used to make purchases on credit, repaying them at later date or spreading out the repayment over time, with interest. Some credit cards must be paid in full each month. Other credit cards require installment payments or minimum monthly payments. Issuing banks charge monthly interest on unpaid credit card balances and may also charge annual fees.

Credit Card Authorization Code

A credit card authorization code is an alphanumeric code sent by the issuer in response to an authorization request from a merchant. The authorization code tells the merchant whether the transaction has been approved or declined. If the transaction was declined, the code will also indicate the reason for the decline. Authorization codes may also be referred to as response codes. Read more >>>

Credit Card Number

A credit card number is an account number that's assigned to a particular credit card upon issuing it. Credit card numbers, often along with other information to prevent fraud, are used to make online purchases. These numbers are also encoded in the magnetic stripe on the card for in-person purchases, although most transactions now use the more secure EMV chip.

Credit Card Response Codes

Credit card response codes are alphanumeric codes sent in response to an attempt to process a credit card transaction. The most common response code is 0, indicating the transaction was approved. Other codes indicate that the transaction failed, providing information about the specific reason it didn't go through. Response codes may also include instructions for the merchant about how to proceed. Read more >>>

Currency Conversion

Currency conversion is the process that facilitates transactions where the issuer and acquirer use different currencies by exchanging one type of currency for another. Currency conversion typically results in some added costs for the customer. Dynamic currency conversion allows the customer to see the transaction amount in their own currency, with additional costs included, but also results in a higher total cost than traditional currency conversion. Read more >>>

Customer IP Address

A customer IP address is a numerical identifier assigned to a device connected to the internet. Each device has its own IP address, and these addresses may be permanent or may change periodically. A customer's IP address can be used to identify the approximate location of that customer, typically giving the nearest city. Read more >>>

Customer Service Automation

Customer service automation is the practice of using systems like chatbots, interactive voice response, and self-service help centers to reduce the demands placed on customer service employees. While implementing automation to handle common customer inquiries can limit the need for additional staff, customers should still have an easy way to contact a representative for more complex issues. Read more >>>