Glossary

Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Acceleration

Making demand for payment in full for a debt that has not yet matured. Usually a remedy provided in a loan document for the lender to use in the event of default by the borrower.

 

Account Status Inquiry Service Fee (Mastercard)– Interregional

The account status inquiry fee is charged for transactions where a merchant does actually authorize an amount on a cardholder’s account, but instead, validates aspects of her account. The interregional assessment is charged when the cardholder and merchant are not in the same region.

Account status inquiry transactions may include requests for address verification service (AVS), card validation code (CVC2), or both. MasterCard implemented the account status inquiry service on June, 14 2011 in place of support for AVS-only transactions.

 

Account Status Inquiry Service Fee (Mastercard)– Intraregional

The account status inquiry fee is charged for transactions where a merchant does actually authorize an amount on a cardholder’s account, but instead, validates aspects of her account. The intraregional assessment is charged when the cardholder and merchant are in the same region.

Account status inquiry transactions may include requests for address verification service (AVS), card validation code (CVC2), or both. MasterCard implemented the account status inquiry service on June, 14 2011 in place of support for AVS-only transactions.

 

 

Acquirer License Fee- Mastercard

This fee is assessed on a business’s gross MasterCard processing volume. This fee varies per acquirer based on MasterCard’s assessed charge as it’s distributed across the acquirer’s portfolio of merchants. Generally, the ALF fee is a fraction of a basis point. For example, 0.0045%, 0.0075%, etc. are examples of a likely ALF fee. This fee is also referred to by several processors as a License Volume Fee.

 

Acquirer or Acquiring Bank

Financial institution which provides the facilities and services for a business to accept credit cards as a means of customer payment.

 

Acquirer Processing Fee (APF) – Visa

  • Credit – Also called Visa Authorization Processing Fee – Variable Credit
  • Debit – Also called Visa Authorization Processing Fee – Variable Debit

 

Address Verification System (AVS)

A method of reducing fraud in mail order, telephone order, and Internet transactions by using cardholder billing address information in the authorization request.

 

Address Verification Fee – Mastercard

  • Card-Not-Present –  MasterCard charges a fee each time a merchant access the address verification service when processing a transaction. MasterCard’s AVS fee is a little higher for card-not-present merchants than it is for card-present merchants.
  • Card-Present – MasterCard charges a fee each time a merchant access the address verification service when processing a transaction.

Authentication

The process of verifying that the user of a credit card in a particular transaction is entitled to conduct payment transactions. Eg. Signature, Verified by Visa or MasterCard SecureCode PIN or password.

Average Ticket

The average dollar amount of merchant credit transactions for a given time period.

Bankcard

A payment card issued by a bank and accepted by merchants. The credit card is the most common form of a bank card.

Basis Point

Discount rates are expressed as basis points. For instance, 1 basis point is expressed as .0001 or .01%

Base II Credit Voucher Fee – Visa

  • Credit – The Base II Credit Voucher Fee applies to all U.S.-based refund transactions involving a credit card.
  • Debit – The Base II Credit Voucher Fee applies to all U.S.-based refund transactions involving a debit card.

Batch

Is a collection of credit card transactions that are saved for submitting at the end of the business day.

Card Fees

Fees and charges above interchange

Card Brand and Network Fees

Card Brand Fees (also known as Card Association Fees) are the fees that are actually paid back to Visa/MasterCard/Discover. These are also commonly referred to as NABU fees (Network Access and Brand Fees). Keep in mind that these are not charged by Payment Pilot.  These are fees collected by Payment Pilot and immediately passed through to the Corporate brand of card your customer used. In the interest of full disclosure we post all potential assessment fees, although many merchants may never be subject to many of these specific fees. Visa- 0.13% Mastercard <$1000 monthly volume 0.12% Mastercard >$1000 monthly volume 0.14% Discover 0.13%

Card Issuer

Any association member financial institution, bank, credit union, or company that issues, or causes to be issued, plastic cards to cardholders

Card-Not-Present (CNP) Surcharge – American Express

The American Express card-not-present surcharge applies to gross card-not-present volume, such as keyed and e-commerce transactions. The CNP surcharge is charged in addition to to the sponsorship fee of 0.15%, making Amex’s total assessment on card-not-present volume 0.45%.

Chargeback

The act of taking back funds that have been paid to a merchant for a disputed or improper credit card transaction.

Credit Voucher Fee – Visa

  • Debit – This fee applies to refund transactions involving a debit card.
  • Credit – This fee applies to refund transactions involving a credit card.

Cross Border Fee – Mastercard

The fee applies to transactions where the merchant’s home country is different than the country where the card was used. This fee may be combined with the Global Acquirer Program Support Fee.

Digital Enablement Fee – Mastercard

This fee applies to all Mastercard card-not-present sale transactions.

Data Usage Fee – Discover

The Data Usage Fee applies to all U.S.-based authorization transactions.

Earnings Credit Rate

An interest rate applied to investable account balances to determine how much expense for bank services used by a depositor is offset by the deposits maintained by that depositor. The same calculation can work in the opposite way by applying the earnings credit rate to the actual service charges to determine how much deposit balance is needed to pay for the charges. The earnings credit rate is always expressed as an annual rate even though the calculations are usually done monthly. Also called earnings allowance rate.

Final Distribution Date

The latest possible date on which an MBS holder receives payment. Because mortgage loans tend to be repaid sooner than their contractual maturity dates, the actual final payment is likely to occur earlier than the final distribution date.

Fixed Acquirer Network Fee (FANF) -Visa

FANF is a monthly fee that varies based on processing method, number of locations and volume.

Guarantor

A party who agrees to be responsible for the payment of another party’s debts should that party default.

Global Acquirer Program Support Fee – Mastercard

This fee applies to transactions for U.S. merchants by cards issued outside the U.S. This fee may be combined with the Cross Border Fee.

Hold

Used to indicate that a certain amount of a customer’s balance may not be withdrawn until an item has been collected, or until a specific check or debit is posted.

Interchange

The wholesale base rates set by the card brand associations.

International Assessment – American Express

The American Express international assessment applies to gross sales volume involving a card issued outside of the United States.

International Service Assessment Fee (ISA) – Visa

The International Service Assessment Fee applies to U.S. acquired transactions paid for with a card issued outside of the U.S.

International Acquirer Fee – Visa

The International Acquirer Fee applies under the same circumstances as the International Service Assessment Fee noted above.Note: The International Service Assessment Fee and International Acquirer Fee often both apply to the same transaction bringing the total charge to 0.85%.

International Processing Fee- Discover

The International Service Fee applies to U.S. acquired transactions paid for with a card issued outside of the U.S.

International Service Fee- Discover

The International Service Fee applies under the same circumstances as the International Processing Fee noted above.
Note: The International Processing Fee and the International Service Fee often both apply to the same transaction bringing the total charge to 0.95%. This total will be 1.35% on and after April 15, 2016.

Kilobyte (KB) Access Fee – Visa

Visa’s kilobyte fee is charged on each authorization transaction submitted to Visa’s network for settlement.

Kilobyte (KB) Access Fee- Mastercard

The kilobyte access fee is a data transmission charge assessed per byte of clearing and collection only data (where/if applicable).

Late Charge

The fee charged for delinquent payment on an installment loan, usually expressed as a percentage of the loan balance or payment. Also, a penalty imposed by a card issuer against a cardholder’s account for failing to make minimum payments.

Merchant Location Fee – Mastercard

 The Merchant Location Fee is billed annually at a rate of $15 per location. Payment facilitators will incur a Merchant Location Fee of $3 per merchant location.

Minimum Payment

The minimum dollar amount that must be paid each month on a loan, line of credit, or other debt.

Misuse of Authorization Fee – Visa

The Misuse of Authorization Fee applies to Visa authorizations that are not followed by a matching clearing transaction (or in the case of a cancelled or timed out authorization, not properly reversed).

Not Automatically Protected

There are several types of Federal benefits that are not automatically protected under 31CFR 212: Federal benefits received by check rather than direct deposit; Federal benefits received more than two months before the bank received the garnishment order or Federal benefits that were transferred to another bank account. The benefits may be exempt from garnishment but you will have to alert the court or creditor.

Network Access Brand Usage Fee (NABU) – Mastercard

 This fee is assessed on each authorization record for U.S. merchants for U.S. cardholders.

Network Authorization Fee – Discover

This fee will applies to all Discover network authorizations and will replace the previously assessed Data Transmission Fee, which applied only to settled Discover transactions. The amount of the Network Authorization Fee and the Data Transmission Fee are the same, but the Network Authorization Fee will apply to a greater number of transactions.

Processing Fees

Includes Payment Pilot’s rates above interchange, credit card transaction fees, monthly fees, and any fees associated with software, gateways or processing equipment.

Processing Integrity Fee: Card Present, Card-Not-Present, No Reversal – Mastercard

The Processing Integrity Fee will apply in the following instances:

  • Card-present: Transactions are not settled, cleared, or reversed within 24 hours of the original authorization transaction/request
  • Card-not-present: Transactions are not settled, cleared, or reversed within 72 hours of the original authorization transaction/request
  • No reversal: An authorization transaction cannot be matched to a corresponding settlement record after a period of 120 days
  • Exempt merchants: Travel and entertainment merchants classified as MCC 3351-3441, 3501-3999, 4411, 7011 and 7512 are exempt from the Processing Integrity Fee

 

Processing Integrity Fee: Pre-Authorization and Undefined Authorization – Mastercard

MasterCard has updated its definition of an authorization from a single type to three separate types that are pre-auth, undefined-auth, and final auth. As of May 28, 2017, a pre-auth or undefined auth that is not properly cleared or reversed will incur a fee of $0.045.

A pre-authorization is an authorization that is not fully reversed or cleared within 30 calendar days of the authorization date.

An undefined authorization is one that is not fully reversed or cleared within 7 calendar days of the authorization date.

 

 

Processing Integrity Fee: Final Authorization – Mastercard

Transactions that do not meet final authorization standards will be assessed this penalty fee.

The final authorization integrity fee applies to authorizations that are not fully reversed or cleared within 7 calendar days of the authorization date, or to authorizations where the authorized amount does not equal the final clearing amount, or to authorizations where the authorized currency code does not match the clearing currency code.

 

 

 

Qualified Opinion

Term used to describe the opinion letter accompanying audited financial statements in which the CPA reports the same information as in the unqualified opinion with one or more additions. The additional information describes either (1) one or more material aspects of the scope of the audit that may be deviations from necessary practice or (2) uncertainty about the future that either cannot be resolved or the effect of which cannot be estimated.

Rate Risk

The risk that the entity’s earnings and/or its capital may be reduced by an adverse change in prevailing interest rates.

Seasoned Loans

Loans for which a year or more has passed since periodic payments began. GNMA requires that mortgages within a given pool be originated within two years of the issue date. FNMA and FHLMC pools may contain older mortgages called seasoned loans.

System File Transmission Fee – Visa

Also called Visa Base II System File Transmission Fee System File Transmission Fee applies to all Visa transactions and is charged in addition to other transaction-based assessments, such as the Acquirer Processing Fee.

Takedown Period

A time period during which a borrower is permitted to draw down (i.e., request and receive advances from) the proceeds of a loan.

Transaction Integrity Fee (TIF) – Visa

Also called Visa Debit Integrity Fee This fee applies to transactions involving Visa non-PIN debit and prepaid cards that do not meet CPS requirements.

Vested Accumulated Benefit Obligation

The portion of the accumulated benefit obligation under a defined benefit plan to which the employees have a legal right even if their employment is terminated before retirement.

Whole Loans

A phrase used to describe mortgage loans when the owner of the debt also owns the servicing rights. In other words, mortgage loans that have not had the servicing separated.

Zero Floor Limit Fee – Visa

Visa’s Zero Floor Limit applies to cleared transactions that can’t be matched to a previously approved or partially-approved authorization. In short, it applies to settlement transactions submitted without a proper authorization.

Zero Dollar Verification Fee – Visa

The Zero Dollar Verification fee applies to Zero Dollar Verification messages (approved and declined). Zero Dollar Verification messages include the verification of the card account number, address verification (through AVS), Card Verification Value 2 (CVV2) and Single Message System (SMS) acquired Account Verification authorizations. The Visa Misuse of Authorization Fee does not apply to these requests. The fee applies when you want to verify a cardholder’s information without actually authorizing an amount of their card.

Glossary. Ecommerce mobile payment processing & invoicing. Online Shop, electronic commerce, purchasing, spending, browsing. Glossary. Payment Pilot is a payment processing and lending company for businesses and their customers.

Glossary. Our strategy is simple: Come to market with a quality product, at a fair price, and with no long term commitments. We are headquartered in Charlotte, North Carolina and provide service to merchants in all 50 states. Our company was founded on three core principles: Earn It. Own It. Be Grateful For It.

Glossary. These principles, as well as our commitment to low prices and outstanding service, have been the cornerstone of our success, present, past, and future. Our commitment to servicing our customers goes above and beyond what most merchants are used to: No auto attendants. 24/7 live person answering phones. No long-term commitments. We stand behind our products and pricing. Wholesale pricing on all equipment. Unparallelled access to our service and tech department. Call/email/text/chat to be connected instantly during normal working hours.