Here are the most common terms you will see when looking at card payment providers, we break them down in simple terms and help you understand what they really mean.
Acquirer
An acquiring bank or acquirer is a bank or financial institution that processes credit or debit card payments on behalf of a merchant. The acquirer allows merchants to accept credit card payments from the card-issuing banks within an association.
Association
Otherwise known as a network or payment network, a card association is an organization that facilitates payment card transactions. It regulates who, where, and how cards are used. Examples of card associations include Visa®, Mastercard®, American Express®, Discover®, China UnionPay®, and JCB®.
MID
You will often hear salespeople or customer service reps asking about your MID or “mid” – this is an acronym for Merchant Identification number – In Lehman’s terms this is like a bank account number for your card processing account. Often you will hear people refer to the actual account as an MID.
PDQ
This stands for “process data quickly” but is often referred to as a PDQ terminal or PDQ machine- in the card payments industry this is the actual card payment terminal or machine that would be used to capture the card details from a customer at the point of sale. You may also hear or see terms such as POS (point of sale) machine, PED (Pin Entry Device) or simply terminal, which generally all relate to the card payment terminal used at the point of sale.
Ecommerce
This simply refers to web-based payments. Usually processed through either a website or App using a payment gateway.
EPOS
An ‘Electronic Point of Sale’ is a digital point of sale machine, often working alongside a card machine. Giving you a multitude of accounting, stock and management software taking care of historically manual tasks relating to your everyday business – generally seen in retail and hospitality settings.
PCI DSS
Stands for Payment Card Industry Data Security Standard – The Payment Card Industry Data Security Standard is an information security standard for organizations that handle branded credit cards from the major card schemes. The PCI Standard is mandated by the card brands but administered by the Payment Card Industry Security Standards Council. Any business wishing to take card payments has to be compliant with these regulations, and often the acquirer you work with will charge a fee as part of this.
CHP
Card Holder Present – This is the term used for standard chip & PIN or contactless transactions when you are actually facing the customer.
CNP
Customer Not Present – This refers to payments taken over the phone using the card terminal.
MOTO
Mail order / Telephone Order – This relates to a specific method of taking card payments, generally, this is a type of system that allows you to take payments over the phone from merchants, it is separate from a standard card terminal as it is specifically for payments over the phone and will most often use a web-based payment page for you to take the card transaction details from your customers.
MMSC
Minimum Monthly Service Charge – many acquirers will have a MMSC in place, the minimum amount of card transaction charges they will expect you to take in a month. If the MMSC is not met they will take the difference as a charge – for example you process £1000 of debit card charges in a month at a rate of 0.4% your total card charges are £40, if your MMSC is £45 they the merchant bank would add the addition £5 on as a ser-charge.
AML
Anti-Money Laundering – This often refers to the checks that are put in place when opening an account and on-going checks made when the account is open to ensure the account is not being used for money laundering purposes.
KYC
Know Your Customer – when setting up an account with an acquirer you will often be asked to provide KYC documents, there are documents to confirm that you as a potential customer, are who you say you are and live where you say you live. These will generally be Photo ID and address verification documents.
POB
Proof of Banking – Whilst setting up a merchant account you will be required to provide proof of the bank account that you would like the funds from the card processing deposited to – This will generally be a recent bank statement or account opening letter.
The card payments sector is full of technical terms and can be difficult to navigate without experience, if you would like some advice from our expert team to help you find the best option for your business check out our payment solutions page.
