Credit Card Glossary

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CreditLine Payment Processing Software Glossary. This site can also be reached at http://docs.911software.com

Not finding all the answers? Try Knowledge Base!

There are two ways to process a transaction: Auth & Sale

Auth

Auth transaction results in temporary reduction in credit limit. Unlike Sale, Auth will not be included in the batch and merchant will not recieve the funds unless finalized

Sale

Sale transaction is automatically finalized. All sales will be included in the batch unlike Auths.

Transaction Finalization

Finalization is the process of converting an Auth to a Sale. Adding tip (even zero tip) to an auth finalizes the transaction. Unlike Sale, Auth will not be included in the batch and merchant will not recieve the funds unless it is finalized.

→ if your POS does not handle finalization properly (for instance, for businesses that do not accept tips), you can use the following switch in the 911\data\911_ccv.ini file:

;Automatically finalize all outstanding auths before batching (by adding $0.00 tip)
;By default, unfinalized Auths (auths without tip added) will not be included in the batch.
;If you prefer to automatically include them in the batch, set the option below to YES
;Warning: only for merchants that settle current day's transactions immediately! 
;Do NOT use this flag for the hotel industry where the transactions would be left 
;for the next day to settle, as it will also convert check-outs into sales
;Default: NO
;FinalizeBeforeBatch=YES 

The switch must not be used unless the POS does not handle the process properly or this is the proper setup for this type of POS and client.

Auth Code

A code received from the processor from Auth, Sale or Force. Auth codes are later used by CreditLine in a batch to to tell the processor which transactions should proceed with the actual money transfer for the credit reserved. Auth codes expire at processor defined intervals (usually under a few weeks). CreditLine Batch Re-Authorization is required to batch transactions with expired Auth Codes


Check Card

Check Card is a Debit Card that can be used just like a credit card without entering a PIN. Check Card can also be used just like a Debit Card if a pin is entered.

Batch

Also known as End-Of-Day Batch, Journal or Settlement, Batch confirms, settles and clears all credit card transactions with the designated processors. After batch is complete merchant’s account receives the money from customer credit card accounts. At the end of each day a batch should be run to settle all purchases and prepare for the next day.

  1. Credit Card Processing Software contacts Processor designated for Settlement.
  2. Credit Card Processing Software transmits Account Numbers, Expiration Dates, Amounts and other relevant information of EVERY transaction to Processor.
  3. Processor transmits back Batch Completion Code.

BIN And IIN Ranges

The BIN and IIN Ranges determine the range for routing by credit card type. Usually comprised of four digits.

A Bank Identification Number (BIN) is the first six digits of a credit card, debit card, charge card, etc. These digits identify which network the card belongs to as well as which bank issued it.

Online merchants may use BIN lookups to help validate transactions. For example, if the credit card's BIN indicates a bank in one country, while the customer's billing address is in another, the transaction may call for extra scrutiny.

The term "Issuer Identification Number" (IIN) is replacing "Bank Identification Number". See ISO 7812 for more information

Tip Rate

Tip Rate is automatic gratuity that will be added to every authorization to make sure that the card has enough funds available for the tip to be added in the end. See CreditLine Automatic Gratuity for more info

Credit Cards

Credit cards are widely used as a method of payment at the point of sale systems. On the consumer side the payment process is rather simple: regardless of the credit card type one signs an authorization and the charge appears on the monthly bill. Merchants, however, are faced with many decisions and difficulties related to credit card authorization and settlement. Accounting, security, performance and value are of great concern. Credit Card Processing Software addresses those issues and hides the complexity from the end user, while offering a swarm of features, excellent flexibility and tough security.

Credit Card Processor

Processor is responsible for receiving credit card information, passing it on to the banks and returning any necessary information regarding the credit card. Processors charge various fees for their services. Credit Card Processing Software acts as a broker by allowing to switch between processors to minimize the impact of the processor fees on the customer. Credit Card Processing Software uses internet or the attached modems to communicate to credit card processors over phone lines. Credit Card Processing Software allows a different Processor to be associated with each card type available. Also see Supported Processor List


CVV

3 or 4 digit Code on the back or the front of the card used for validation We support the following processors for CVV validation:

  • FDC North(CES)
  • Global Payments(NDC)
  • NOVA
  • TSYS(VITAL)
  • Paymentech(GENSAR)
  • Merchant e-Solutions
  • Coming soon: HPS (Heartland)

Debit Card

A debit card is a plastic card which provides an alternative payment method to cash when making purchases. Physically the card looks like a credit card, however its functionality is more similar to writing a check as the funds are withdrawn directly from the cardholder's bank account. The debit card is swiped through a card reader or inserted into a chip reader and the merchant usually enters the amount of the transaction before the customer enters their PIN. A Pin Pad is required for processing debit cards.

End User

CreditLine End User is a the same as Point Of Sale End User. Generally, it is a restaurant, hotel, golf club or a store. The dealer for the End User is usually the Point Of Sale company.

Merchant Account

A merchant account is an account that is created so that a business or individual can accept credit cards, debit cards, gift cards and other forms of electronic payment. This is also widely known as payment processing.

Merchant Account is created by processors (such as TSYS, FDC, Global, etc). Merchant Accounts are bank independent. A given merchant account can connect to any bank account. Therefore, no matter which bank the merchant is using, they can change processors at will and they do not have to obtain their merchant account from their bank.

To process transactions, a merchant is charged a fee called a discount rate. The discount rate is a percentage of the dollar amount of the transaction. The discount rate varies, but is based on the business type, the method the transaction is taken (Swiped, Keyed, Internet), and other qualifying factors. An additional fee called a transaction fee, normally a flat fee, is also applied for each transaction that the merchant processes.


Network

Depending on your installation, an operational Windows network must be in place to allow communication between Server, Manager and Point Of Sale Application. In some cases file based transport serves as the network counterpart.

Modem

At least one modem has to be connected and set-up in Windows. [products.htm CreditLine] allows users to associate one modem per each card type to speed up processing (Multiple Modems). CreditLine automatically initializes modems with strings optimized for fastest connection and performance.


Setup Sheet

A setup sheet that you can fax to your processor or merchant account sales representative to be filled in with merchant account data.

Return, Credit

Return or Credit serves to credit the customer’s credit card account. If the Return is not included in Batch customer’s account does not receive any funds. Credit Card Processing Software does NOT contact Processor to get Authorization Code for Returns. Instead, the credit transaction is saved and is included in the next Batch. In this respect Return is similar to Forced Authorization. If Return is not included in Batch, the credit limit is restored and customer does not receive any funds.


Credit Card Transaction Types

Authorization, Sale

Also known as Sale, Authorization is a temporary reduction in the credit limit of the card. If Authorization is not included in Batch, the credit limit is restored and merchant does not receive any funds.

  • Credit Card Processing Software contacts Processor associated with the card to be authorized.
  • Credit Card Processing Software transmits Account Number, Expiration Date and Amount to Processor
  • Processor debits the credit limit of the card by Amount and transmits back Authorization Code.

Pre-Authorization

Pre-Authorization is used to make sure that the card is valid and has sufficient credit limit. There is NO temporary reduction in the credit limit of the card. Merchant does not receive any funds.

  • Credit Card Processing Software contacts Processor associated with the card to be authorized.
  • Credit Card Processing Software transmits Account Number, Expiration Date and Amount to Processor
  • Processor transmits back Authorization Code.

Forced Authorization (Force/Voice Authorization)

Forced Authorization is used when a connection to processor is not possible or desirable. To force a transaction, a user must call the processor to obtain an authorization or approval code.
This code needs to be entered into CreditLine for batch time processing.
Credit Card Processing Software does NOT contact Processor to get Authorization Code for Forced Authorizations. Instead, the Forced transaction is saved and is included in the next Batch. If Force is not included in Batch or Processor does not approve the transaction at Batch time, merchant does not receive funds.

Call-In Authorization

This is a type of Forced Authorization that is used when a connection to a processor is not possible or desirable. You have to call the processor to obtain an authorization code which will be supplied to a Force transaction. If Force is not included in Batch or Processor does not approve the transaction at Batch time, merchant does not receive any funds.