Payment processing terms glossary: 40 words to know

Payments people talk in code, and nobody hands you the dictionary. This payment processing terms glossary defines 40 words store owners actually meet, in plain English, in alphabetical order. Skim it now, then keep it for statement day.

Which terms should you learn first?

If you only learn five, make them authorization, batch, interchange, chargeback, and PCI DSS. Those five cover most of what happens between the tap and the deposit. The rest are here for the day a contract, a fee line, or a terminal screen uses them.

A to E

ACH. The bank-to-bank transfer network that moves your card sales into your business account.

Acquirer. The bank or company that holds your merchant account and receives card funds on your behalf.

Authorization. The instant yes-or-no on a sale, confirming the card is valid and the funds exist.

Batch. A group of card transactions your terminal submits together for settlement, usually once a day.

Card network. The system that routes transactions between banks; the logos on the front of the card.

Card-not-present. A sale where the physical card isn't there, like a phone or online order.

Card-present. A sale rung with the card at the terminal, by chip, tap, or swipe.

Cash discount program. A pricing plan where posted prices include a small offset and customers who pay cash receive a discount at the register.

Chargeback. A disputed sale reversed through the cardholder's bank. The store can respond with evidence.

Contactless payment. Tap-to-pay with a card or a phone. No insert, no swipe.

CVV. The short security code printed on a card, used to verify card-not-present sales.

Debit card. A card that pulls money straight from the customer's bank account rather than from a credit line.

Decline. The card issuer's refusal of a transaction.

Dual pricing. Displaying a cash price and a card price for the same item; rules vary by state.

EBT. Electronic Benefit Transfer, the card system for government food assistance benefits.

EMV. The chip-card standard; each sale gets a unique code, which makes counterfeiting harder.

Encryption. Scrambling card data so it can't be read in transit.

eWIC. The card version of WIC nutrition benefits, restricted to approved items for enrolled families.

F to M

Funding time. The gap between closing a batch and the money landing in your bank account.

Gateway. The service that carries transaction data from your reader or website to the processor.

Hold. A temporary freeze on funds while the processor reviews unusual activity on the account.

Interchange. The base fee card-issuing banks collect on each transaction; a large share of processing cost.

Issuer. The bank that gave the customer their card and rules on each sale.

Merchant account. The account that receives your card sales before the money moves to your bank.

Merchant category code (MCC). The four-digit code that classifies what your business sells.

Merchant ID (MID). The number that identifies your business in the card system, printed on your statement.

Monthly minimum. A floor some processors set: if your fees don't reach it, you pay the difference.

N to Z

NFC. Near-field communication, the short-range wireless behind tap-to-pay and phone wallets.

PCI DSS. The Payment Card Industry Data Security Standard, the security rules every card-accepting business follows.

PIN. The personal identification number a customer keys in for debit and EBT sales.

Point of sale (POS). The register system that rings items, tracks inventory, and reports your sales.

Processor. The company that moves transactions between your terminal, the card networks, and the banks.

Refund. Returning money to a customer's card after the sale has settled.

Reserve. Funds a processor holds back as a cushion against disputes.

Settlement. The step where batched transactions are finalized and the money starts moving toward your account.

SKU. Stock-keeping unit, the code your register uses to track each distinct product.

Surcharge. An extra fee added to a credit card sale, restricted in some states; check your state and local requirements.

Terminal. The hardware that reads cards, from countertop units to mobile readers.

Tokenization. Replacing a card number with a code that's useless to anyone who steals it.

Void. Canceling a transaction before the batch closes, so it never settles.

What if a term isn't on this list?

Ask. Every mystery line on a statement has an explanation, and getting it for you is what support is for. NRS Pay staffs live support seven days a week. For hardware vocabulary, the equipment page shows what current readers actually do.