ABA routing number   Unique bank identifying number that directs electronic ACH deposits to the proper bank. This number precedes the account number at the bottom of a check.

ACH (automated clearing house)   A method of transferring money between banks via the Federal Reserve System.

AMEX   American Express.

acquiring bank  Credit card processing bank.

approval   1. A code issued by the card issuing bank allowing a sale to be placed against the cardholder's account. Approval means that the amount of the sale is within the cardholder's credit limit and the card has not been reported lost or stolen. An approval code will freeze cardholder funds for 10 to 21 days depending on the card issuing bank and will guarantee funds to merchant for 30 days provided the merchant has followed all Visa and MC regulations regarding the sale. An approval may be obtained electronically (terminal) or by phone (voice ).   2. Also known as an authorization.

authorization   See approval.

autho log   Bank file of all authorizations obtained for a specific merchant number showing card number, dollar amount and how (electronically or voice) and where (network or in our case, FDR for voice) they were obtained.

average ticket   Average dollar amount of a merchant credit card transaction.

basis point   One one-hundredth of a percent. Merchant discount rates are billed in basis points.

batch   A group of credit card transactions settled at the same time, usually transactions for the same calendar date.

bundled rate   A discount rate which includes communications costs instead of being billed separately as transaction fees. A bundled rate may also be referred to as a flat rate.

call center   Terminal message received when communications network is "down" or card issuing bank wants additional information to complete the sale-also used by card issuing banks to spot check sales.

capture   Processing technology for electronic deposit of credit card transactions. Unlike a transaction that is authorized only, a captured transaction resides in the terminal memory under terminal capture and in the host computer memory under host capture until settlement.

card limit   Credit limit established for a credit card by the card issuing bank that may not be exceeded except with their permission. A "decline" message usually results when a transaction will put the cardholder over his credit limit.

card reader   Device on a POS terminal which electronically reads the information contained in the magnetic stripe on a credit card.

center   Processing slang for voice authorization center.

chargeback   Processing bank is forced to reverse a merchant sale because card issuing bank (cardholder) disputes the sale. Merchant has the opportunity to appeal and prove the sale is valid.

communication cost   Cost incurred each time a terminal dials out to computer network.

communication network   Telecommunications network accessed by the terminal to communicate with host computer.

credit   Processing technology for credit to cardholder account (money debited from merchant account and paid back to cardholder). Credit may be issued outside of original batch.

CVV value   Computer value picked up from card magnetic stripe identifying transaction as mag-stripe read.

DDA (demand deposit account)   A bank account.

debit card   A type of account ( e.g. Visa Debit Card MasterCard Debit Card) where the amount of any transaction is debited directly from cardholder checking account immediately instead of standard 30 day billing. May also be a regional debit card issued by the local bank ( e.g. Pulse, Honor, Explore) allowing cardholder electronic access to their checking account funds. Regional debit card requires PIN number.

decline   Response to transaction authorization attempt that means card issuing bank will not accept the charge-merchant must accept another form of payment.

discount rate   The percentage of each sale the merchant pays to processing bank to turn Visa and MasterCard funds into cash. The percentage may be billed on gross or net sales, depending on processing bank. Retriever bills on gross sales.

draft   Processing slang for sales draft. A sales draft can be a receipt produced by an electronic printer or a manually imprinted multipart sales receipt.

DTC (depository transfer check)   DDA checks preprinted with business account name and number in the "Pay to the order of" portion of the check and no signature required above the signature line. Money may only be deposited to the account that matches the information printed on the DTC.

EDC (electronic draft capture)   Electronic authorization and deposit of credit card transactions without submission of paper drafts to bank for payment. May also be referred to as a capture.

Fed Bank   A Federal Reserve bank capable of receiving ACH deposits directly. Some smaller banks that are not part of the Federal Reserve system receive ACH deposits via a Fed Bank, sometimes delaying merchant deposits an additional day.

force   Processing terminology for a previously authorized transaction that is entered into terminal/host memory for capture/deposit. Voice authorized transactions are entered for payment via this transaction which may also be known as a post-authorization.

floor limit   This was a preset limit established by a processing bank that allowed the merchant to accept a Visa and MasterCard sale without authorization provided he checked the Warning Bulletin (eliminated 4-2-94) for lost or stolen cards.

Global Payment Systems   Terminal capture telecommunications network owned by National Data Corporation.

host capture   Type of draft capture where each transaction approved and captured at the network host computer and a duplicate file (shadow file) is kept in the terminal so merchant has a record of the batch. Settlement occurs at the host computer only and is "automatic" requiring no additional function at the terminal level. Several batches may remain stored in the terminal memory at all times.

issuing bank   Credit card issuing bank.

interchange   This is the portion of the merchant discount rate that is paid to the card issuing bank.

MATCH   A file maintained by MasterCard listing merchants whose processing accounts have been terminated by a processing bank for cause (fraud, high percentage of chargebacks, failure to pay processing fees, etc.)

mag stripe   Magnetic strip located on the back of credit cards that contains cardholder information such as the account number, expiration date, (track 11) and name of cardholder (track 1).

MCC (merchant category code)   Four digit codes established by Visa and MasterCard that are transmitted by network to describe the merchant's type of business. May also be know as SIC (Standard Industry Code).

member bank   Bank that is a member of Visa or MasterCard. Visa and MasterCard are associations.

MICR encoding   Special encoding of the account and routing number at the bottom of a check.

MID (merchant identification number)   Unique number identifying a merchant.

NACHA (National Automated Clearing House Association)   Banking association (part of the Federal Reserve system) that governs the ACH system.

negative file   Computer file of lost or stolen credit cards. Terminal will respond with "pic up" or "PU" asking merchant to return the credit card to their processing bank for reward ($50).

node   Telecommunication line (phone number) that a terminal dials to access network. Nodes may be local, WATS or 950 phone numbers.

POS   Point of sale.

post authorization   Processing terminology for a previously authorized transaction that is entered into terminal/ host memory for capture/deposit. Voice authorized transactions are entered for payment via this transaction which may also be known as a force.

pre-note   Period of communication between ACH sending and receiving banks as required by NACHA. First National Bank of Omaha holds funds during pre-note transmitting all held funds upon successful completion of pre-note. Pre-note may be waived with written confirmation of ABA routing number and merchant account number of local bank.

processor   Large computer center that processes data from Visa and MasterCard sales and settles funds to merchants. A processor may be owned and operated by a single bank such as First of Omaha, or may be run by an association of banks.

PS2000 (Payment Service 2000)   Program initiated by Visa on April 1, 1993 requiring additional information with each credit card transaction. This program also increased Interchange fees on some types of transactions, increasing discount fees for most merchants.

reference number   Eight digit number assigned to each transaction in a batch under host capture system. First three digits are the Julian date, second two digits are the batch number (01, 02, etc.) and last three are the transaction number (001,002, etc.)

rejects   Processing slang for transactions rejected by processing bank. Transactions may be rejected when merchant ill is not active at processing bank but is active at the network, or network information does not match bank information. These transactions must be reentered for merchant to receive funding.

residual   Term for a basis point commission on a merchant's Visa and MasterCard business.

retrieval request   Written request to merchant (via First National Bank of Omaha) from card issuing bank/ cardholder for a copy of a particular sales draft-proof of sale.

routing number   Unique bank identifying number directing electronic ACH deposits to a particular bank. This number precedes account number at the bottom of a check-also know as the ABA Routing Number.

sale   Processing slang for a credit card sale (money debited from cardholder account and paid to merchant).

settlement   Process of transmitting authorized transactions for capture by host computer in terminal capture system. Settlement requires a particular procedure on the part of the merchant, so transactions are merely stored in terminal memory until settlement occurs. Upon settlement, terminal memory is cleared, and unique nine digit "OK" number appears on terminal screen (terminal only) or is printed on settlement report (terminal with printer). First three digits of "OK" number are the Julian calendar date of settlement.

SIC code (standard industry code)    Four digit codes established by Visa and MasterCard that are transmitted by network to describe the merchant's type of business. May also be know as MCC (merchant category code).

T & E cards (travel & entertainment cards)   American Express, Carte Blanche, and Diners Club cards.

T & E merchants (travel & entertainment merchants)   Car rental agencies, lodging merchants, and restaurants.

terminal based capture   Type of EDC where each transaction is approved and resides in the terminal memory only until settlement (transmission to host computer). Also see settlement.

terminal memory   Memory capacity for an EDC terminal-number of transactions it will hold before batch is full and must be settled.

test card   Network credit card manufactured specifically to test terminal operation. Some networks (e.g. NDC) drop batches which include a test card transaction upon settlement.

test mode   Special function which allows the terminal to emulate live operation. Transactions authorized and settled in this mode are completely bogus and merchant will receive no funds!

transaction billing (unbundled rate)   Merchant discount rate billed as a percentage plus a fee for each transaction which usually includes the communications and supply (paper, drafts, etc. ) charges.

VisaNet   Terminal capture communications network owned by Visa.

void   Processing terminology for a transaction deleting a previous sale. This transaction can only be completed within the same batch as the original sale and the authorization or approval code is not deleted so cardholder funds are still frozen. Another transaction may be forced or post-authorized using the same auth code, or merchant may phone center or card issuing bank to request funds be released.

volume   Processing slang for a merchant's annual Visa and MasterCard processing volume.

wire transfer   Fastest method of transferring funds through the Federal Reserve system (usually same day). There is almost always a fee attached to this service, either from the transferring or receiving bank, and sometimes from both. This is not to be confused with the ACH transfer.