Glossary of Terms PDF

Glossary of Terms 1. Merchant service: Financial relationships needed for businesses to accept and process credit or debit card payments from their customers. 2. Merchant Account: Is a type of business bank account that allows a business to accept and proces...

Glossary of Terms 1. Merchant service: Financial relationships needed for businesses to accept and process credit or debit card payments from their customers. 2. Merchant Account: Is a type of business bank account that allows a business to accept and process electronic payment card transactions. Merchant accounts require a business to partner with a merchant acquiring bank who facilitates all communications in an electronic payment transaction. 3. CDP (Cash Discount Program): Is a type of credit card processing that passes the cost of acceptance back to customers who choose to pay with a credit card or debit card. Cash discount merchant services allow business owners to continue to accept all major credit cards, but without the loss of 3-4% in fees. 4. Fees charge: is a fixed price charged for a specific service. Fees are applied in a variety of ways such as costs, charges, commissions, and penalties. Fees are most commonly found in heavily transactional services. 5. Monthly volume: A merchant's average monthly transaction volume is calculated as the total number of transactions processed in a year divided by 12 months.Average monthly transaction volume is a metric that processors may consider when evaluating merchant risk. 6. Effective rate (AER): Is the interest rate on a loan or financial product restated from the nominal interest rate and expressed as the equivalent interest rate if compound interest was payable annually in arrears. 7. Surcharge downgrade: Is a blanket term used to signify surcharges added to the “Qualified Discount Rate” of the processing fee. In particular, the “Mid-Qualified” and “Non-Qualified” surcharges are the most common Downgrade Fees. However, there is no standard on what a Downgrade Fee must be called, or how it can be applied, and the terminology can vary from provider to provider. Downgrade Fees are often the fees that merchants report as “hidden fees” because they are rarely disclosed before the merchant account activation. Downgrade Fees generally cost merchants an additional 1%-3% per transaction on top of the Qualified processing rate. The fee may be assessed for a variety of reasons including a customer’s card type, issuing bank, how the transaction is entered and other merchant actions. On average, more than 50% of a  merchant’s credit card transactions experience Downgrade Fees when set up under the tier/bucket rate pricing model – which is the pricing model that most merchants receive. 8. Qualified Discount Rate: Is often the only rate that is advertised or quoted to merchants because it is the lowest and most attractive fee. The quotes often look something like “1.59% + $0.10 per transaction,” but fail to mention that 50%, or less, of a merchant’s transactions will experience this low rate. The other 50+% will be charged at the higher Mid- and Non-Qualified tiers. Merchant account providers primarily determine which rate tier a merchant will incur based on a customer’s card type. Generally, the only cards that fall into the Qualified tier are credit cards that do not have an attached reward program such as miles or points, and signature debit transactions where the debit card does not have an attached rewards program. 9. Mid Qualified: This fee is actually a surcharge that is added on top of the base tier (Qualified Rate) for certain card types. Generally, the Mid-Qualified surcharge costs merchants an additional 1% and is applied because of cards that have a rewards program such as miles or points. However, merchant account providers can define the fee tiers however they choose because there are no industry standards dictating how fees must be defined. One provider may define Mid-Qualified transactions very differently than another, which makes comparing provider costs nearly impossible. 10. Non Qualified: This fee is actually a surcharge that is added on top of the base tier (Qualified Rate) for certain card types, transaction methods, and merchant mistakes. The Non-Qualified surcharge is the most expensive of the tiers and can cost merchants an average of 1.5% -2.5% on top of the Qualified rate. Generally, merchant account providers apply Non-Qualified fees because the customer used a corporate card, foreign credit card or a certain rewards card. The Non-Qualified is also often used as a “catch all” tier for card types that cannot be identified correctly during the transaction processing. Additionally, the Non-Qualified surcharge may be applied to retail merchants that type in a transaction instead of swiping it, and/or to all transactions if a merchant fails to “batch out” at the end of the business day. 11. Tiered pricing: Is a pricing strategy businesses use to present customers with several product or service options, with corresponding pricing levels. Tiered pricing sets price points that reflect the total volume of items in a purchase or subsets of features within more complex products or services. 12. BIF form: Basic Information form that collects basic information about both the applicant business and its principals, including address (business and personal). 13. Merchant Statement: Is a monthly report that credit card companies issue to credit card holders showing their recent transactions, monthly minimum payment due, and other vital information. Billing statements are issued monthly at the end of each billing cycle 14. Interchange fee: The fee paid to the bank. The fee is calculated by applying an "Interchange Rate" or percentage to the amount of the sale. 15. Interchange Rate: Is a fee that a merchant is required to pay with every credit card and debit card transaction. Also known as "swipe fees," financial companies charge this fee in return for accepting the credit risk and handling charges inherent in credit card transactions. 16. Discount rate: Is the interest rate that the Federal Reserve charges banks for short-term loans. The term is also used in future cash flow analysis. 17. NACHA: (National Automated Clearing House Association) manages the administration, development, and governance of the ACH network, which is the electronic system that facilitates the movement of money in the United States. 18. ACH payment: Is a kind of electronic bank-to-bank transfer made via the ACH network, rather than card networks like Mastercard or American Express. There are two main types of ACH payment: Direct Deposits (deposit payments from businesses or governments to employees or consumers) and Direct Payments (the use of funds for making payments either by organizations or individuals). 19. Pin debit: It's initiated when the customer presents a bank-issued payment card linked to his or her checking account (the debit card) and enters a password (the PIN) at the point of sale. PIN debit cards look like credit cards, but function like electronic checks. 20. Debit Network: An electronic network that permits several types of financial transactions including ATM cash withdrawals, debit card transactions, and online bill pay Examples of Debit Network logos are MAESTRO, NTCE, and STAR. 21. PCI DSS: Security Standards Council (SSC) “For the purposes of the PCI DSS, a merchant is defined as any entity that accepts payment cards bearing the logos of any of the five members of PCI SSC (American Express, Discover, JCB, MasterCard or Visa)  as payment for goods and/or services.” Payment Card Industry Data Security Standard) merchant levels are rankings of merchant transactions per year broken down into four levels. The payment card industry (PCI) uses merchant levels to determine risk from fraud and to ascertain the appropriate level of security for their businesses. Merchant levels determine the amount of assessment and security validation required for the merchant to pass PCI DSS assessment. The PCI DSS itself specifies steps that all merchants who process card payments and store or transmit credit, debit or prepaid card information must follow to provide secure transactions. To ensure that any payment or customer data they transmit, process or store is secure, all merchants are required to adhere to one of the four levels of PCI compliance established by the PCI SSC (PCI Security Standards Council). 22. Payment Gateway: Is a technology used by merchants to accept debit or credit card purchases from customers. The term includes not only the physical card-reading devices found in brick-and-mortar retail stores but also the payment processing portals found in online stores. Connects the merchant's e-commerce website shopping cart to the merchant's credit card processor. Credit and debit card transactions are sent for authorization from the merchant's gateway to the processor and are approved or declined. 23. Payment Terminal: (POS) terminal, Is a device which interfaces with payment cards to make electronic funds transfers. The terminal typically consists of a secure keypad (called a PINpad) for entering PIN, a screen, a means of capturing information from payment cards and a network connection to access the payment network for authorization. A payment terminal allows a merchant to capture required credit and debit card information and to transmit this data to the merchant services provider or bank for authorization and finally, to transfer funds to the merchant. The terminal allows the merchant or their client to swipe, insert or hold a card near the device to capture the information. 24. Risk Monitoring: Is the process which tracks and evaluates the levels of risk in a business. The findings which are produced by risk monitoring processes can be used to help to create new strategies and update older strategies which may have proved to be ineffective. 25. LLC: Is a business structure in the U.S. that protects its owners from personal responsibility for its debts or liabilities. Limited liability companies are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship. 26. DBA Name: (doing business as).” It's also referred to as your business's assumed, trade or fictitious name. Filing for a DBA allows you to conduct business under a name other than your own; your DBA is different from your name as the business owner, or your business's legal, registered name. 27. Sole Proprietor: Also known as individual entrepreneurship, sole trader, or simply proprietorship) is a type of an unincorporated entity that is owned by one individual only. It is the simplest legal form of a business entity. A sole proprietorship does not create a separate legal entity from the owner. In other words, the identity of the owner or the sole proprietor coincides with the business entity. Because of this fact, the owner of the entity is fully liable for any and all the liabilities incurred by the business. 28. Corporation: Is a single entity which may be comprised of individuals or a company, but is separate from its owners. Along with limited liability, corporations possess the ability to own assets, enter contracts, sue or be sued, and borrow money. (Inc) is an abbreviation of "incorporated" and both the abbreviation and the full word mean that a company's business structure is a legal corporation. A corporation or "Inc." is an entirely separate entity from its owners and shareholders. 29. Partnership: A legal form of business operation between two or more individuals who share management and profits. The federal government recognizes several types of partnerships. The two most common are general and limited partnerships. In a general partnership, the partners manage the company and assume responsibility for the partnership's debts and other obligations. A limited partnership has both general and limited partners. The general partners own and operate the business and assume liability for the partnership, while the limited partners serve as investors only; they have no control over the company and are not subject to the same liabilities as the general partners. 30. LLP: (limited liability partnership) Is a business structure that provides some liability protection for its owners, along with some potential tax breaks and other advantages. It's a structure most commonly used by professionals such as doctors, attorneys, and accountants who go into practice together. 31. Non Profit/Tax Exempt: Nonprofit organizations are exempt from federal income taxes under subsection 501(c) of the Internal Revenue Service (IRS) tax code. Collect income and turnover the entire amount (minus expenses) to organizations or individuals who are lawfully recognized as legitimate charities. 32. Average ticket: Is a measurement that looks at the dollar amount of sales per customer. Computing average ticket size is computing the mean, which is calculated as the total sales divided by the number of customers. Brokerage firms, credit card vendors, and retailers often track the average ticket size measurement 33. Brick & Mortar: The term "brick-and-mortar" refers to a traditional street-side business that offers products and services to its customers face-to-face in an office or store that the business owns or rents. The local grocery store and the corner bank are examples of brick-and-mortar companies. Brick-and-mortar businesses have found it difficult to compete with mostly web-based businesses like Amazon.com Inc. because the latter usually have lower operating costs and greater flexibility. 34. Trade show: Trade fair, or exposition is an exhibition in which companies promote their products and services. Most trade shows focus on a particular industry, such as aviation, computers, tourism, smartphones, automobiles 35. EBT: The Electronic Benefits Transfer card looks like a debit card is an electronic system that allows a Supplemental Nutrition Assistance Program (SNAP) participant to pay for food using SNAP benefits. The EBT card allows you to buy groceries and other items with your cash benefits at participating stores and other locations. 36. Payment Processor: A payment processor transmits information to and from customer and merchant banks. Payment processors may also provide access to payment gateways and/or merchant accounts along with other essential financial services and tools. 37. B2B: A type of electronic commerce (e-commerce), is the exchange of products, services or information between businesses, rather than between businesses and consumers (B2C). A B2B transaction is between two companies, such as wholesalers and online retailers. In most B2B business models, each organization benefits in some way and usually has similar bargaining power. 38. Blog: A blog (a shortened version of “weblog”) is an online journal or informational website displaying information in reverse chronological order, with the latest posts appearing first, at the top. It is a platform where a writer or a group of writers share their views on an individual subject. 39. Post: A message published in an online forum or newsgroup. 40. Brainstorming: Is a group creativity technique by which efforts are made to find a conclusion for a specific problem by gathering a list of ideas spontaneously contributed by its members. People are able to think more freely and they suggest as many spontaneous new ideas as possible. 41. Branding: Are actions aligned to the positioning, purpose and values of a brand. Their objective is to awaken sensations and create conscious and unconscious connections, which will be crucial for the customer to choose your brand at the moment of purchase decision. 42. Insight Community: Is a tool for conducting research with a group of people interested in a brand or company for a defined or indefinite period of time. In them, participants express their opinions and ideas through different tools, such as surveys, forums and polls, among others. 43. Valuable content: Is the one that helps to attract users. It must be planned, organized and unique. To achieve good content the company must define and know your market niche, know your audience and have a good Blogger who knows how to communicate and convey the message of your brand. 44. CRM: Is a technology for managing all your company’s relationships and interactions with customers and potential customers. The goal is simple: Improve business relationships to grow your business. A CRM system helps companies stay connected to customers, streamline processes, and improve profitability. When people talk about CRM, they are usually referring to a CRM system, a tool that helps with contact management, sales management, agent productivity, and more. CRM tools can now be used to manage customer relationships across the entire customer lifecycle, spanning marketing, sales, digital commerce, and customer service interactions. A CRM solution helps you focus on your organization’s relationships with individual people — including customers, service users, colleagues, or suppliers — throughout your lifecycle with them, including finding new customers, winning their business, and providing support and additional services throughout the relationship. 45. E-mail marketing: The messages you send are sent directly to your recipients' mailboxes, allowing you to be present in the daily life of each of them. Therefore, email is involved in every stage of the customer relationship: lead nurturing, prospecting, conversion, but also in the generation of loyalty.  Email marketing can help to achieve 3 categories of objectives: Notoriety (making your business known). Image (positioning yourself as an expert) Action (selling your products and services) One of the main benefits of email marketing is its scalability. This refers to the fact that emails can be deployed on a large scale to a large number of recipients. 46. Engagement: 'Community engagement' is therefore a strategic process with the specific purpose of working with identified groups of people, whether they are connected by geographic location, special interest, or affiliation to identify and address issues affecting their well-being. 47. Fan page: is a page created especially to be a communication channel with fans on Facebook (fan page = page for fans, in literal translation). Unlike profiles, fanpages are spaces that bring together people interested in an issue, company, cause or character in common. 48. Feed: Files generated by certain websites that are used to distribute their content towards other services or pages, i.e. they are used to supply up-to-the-minute information to the subscribers of the said feed. By using a feed-reader, anyone can keep abreast of new publications without having to access each digital publication because information of interest can be channeled towards one single repository. 49. Hashtag: is a term associated with topics or discussions that want to be indexed in social networks, by inserting the pound sign (#) before the word, phrase or expression. When the combination is published, it becomes a hyperlink that leads to a page with other posts related to the same topic. 50. Keywords: Are search terms that a website owner or SEO professional will use to optimize a website in the hopes of ranking at the top of Google’s results for specific keywords. Anything searched on a search engine, whether a single word or a phrase 51. SEO: It means the process of improving your site to increase its visibility when people search for products or services related to your business in Google, Bing, and other search engines. The better visibility your pages have in search results, the more likely you are to garner attention and attract prospective and existing customers to your business. 52. SEM: Search engine marketing, is often considered the part of search marketing that uses PAID tactics to gain visibility in SERPs. A paid SEM strategy includes both the  activities involved with setting up and optimizing ads as well as setting a budget that pays for the placement of ads. 53. Landing page: Is a standalone web page, created specifically for the purposes of a marketing or advertising campaign.” Unbounce also mentions landing pages are designed with a single objective in mind, known as a Call to Action or CTA. Landing pages are used at various stages throughout the inbound marketing cycle. From introducing a user in your target market to your brand to converting a lead into a paying customer, landing pages can help accomplish your goal at each stage of the purchase process. 54. Retargeting: Remind your website visitors of your products and services after they leave your website without buying. After visiting specific pages, it allows you to retarget them and show your visitors relevant visual or text ads when they visit other websites. 55. Storytelling: Is the interactive art of using words and actions to reveal the elements and images of a story while encouraging the listener’s imagination. Involves a two-way interaction between a storyteller and one or more listeners. The responses of the listeners influence the telling of the story. In fact, storytelling emerges from the interaction and cooperative, coordinated efforts of teller and audience. 56. ​Merchant Acceptance: A process that allows a merchant to accept card payments. 57. ​Restricted Industry Addendum: Refers to an additional document used to establish restrictions or special conditions related to certain industries or types of businesses when processing credit or debit card payments. This type of addendum usually contains detailed information on specific regulations, restrictions or requirements that apply to certain industries considered high risk or subject to special regulations in payment processing. 58. ​Bank Disclosure: Refers to the disclosure of information by the bank or financial institution that provides payment processing services to merchants. This disclosure may include details about fees, policies, terms and conditions, and other aspects related to payment processing. Bank disclosure is important for merchants to fully understand the costs and terms associated with the payment processing services they are using. 59. Personal Guarantee: Refers to a personal guarantee that an individual provides on behalf of a company or business when requesting payment processing or financial services. By signing a "Personal Guarantee," the individual agrees to assume personal liability in the event that the company is unable to meet its financial obligations, such as payment of payment processing fees or service-related debts. It is a way of assuring the service provider that, in the event of default by the company, the individual will guarantee payment.