Merchant Account Glossary

ABA Routing Number:

Also referred to as Transit Routing Number. Directs electronic ACH deposits to the proper bank institution.

ACH:

Automated Clearing House. A regional organization used by member banks to electronically transfer funds between members.

ACH Network:

A central distribution and settlement point for electronic items exchanged among depository financial institutions.

ACH Operator:

A central clearing facility, operated by a Federal Reserve Bank or a private sector organization on behalf of depository financial institutions, in which participating financial institutions transmit or receive ACH entries.

AMEX:

Abbreviation for American Express, an organization that issues travel and entertainment cards and acquires transactions.

AVS:

See Address Verification.

Acceptable Indorsement:

With regard to checks made payable to an individual, a “blank”, “restrictive”, or “special” indorsement (as defined in UCC Part 3 Sections 3-204, 3-205, and 3-206). With regard to checks made payable to a business, a “blank”, “restrictive”, or “special” indorsement (as defined in UCC Part 3 Sections 3-204, 3-205, and 3-206) OR a business stamp in lieu of an indorsement. (Effective June 1, 2003)

Access Account:

Those Accounts maintained with a Member. An Account may be a checking, saving, NOW, share draft, other customer depository account, or Credit Account. An Access Account may also include a pooled account, owned by the Member and accessed by one or more Stored Value Cards.

Access Fees:

Those fees associated with a Member’s use of STAR Network services including STAR Card royalty fees, switch and Interchange Fees for ATM, POB and POS Transactions, and other fees as may be established from time to time.

Account:

An Account as defined in Section 229.2(a) of Regulation CC of the Board of Governors of the Federal Reserve System.

Account Authorization System:

See “Issuer Authorization System”.

Account Holding Member:

A STAR Member that holds the Access Account against which a STAR Internet Transaction or Interbank Debit is performed; and which may use an Authentication Token.

Account Number:

A unique sequence of numbers assigned to a cardholder account that identifies the issuer and type of financial transaction card.

Acquirer:

A licensed member of MasterCard and/or VISA (or its agent) which maintains merchant relationships, receives all bankcard transactions from the merchant, and initiates that data into an interchange system.

Acquirer Member:

A Member that owns, operates, or controls STAR Terminals and/or that sponsors STAR Terminal(s) and/or STAR Internet Merchant(s) and who is liable and responsible under these Rules for the operation of said STAR Terminal(s)/STAR Internet Merchant(s). Except as otherwise specifically provided herein, each Interbank Sending Member shall also be treated as an Acquirer Member.

Acquirer Zone:

All processing points between and including the STAR Terminal and the STAR Switch.

Acquiring Bank/Merchant Bank:

The bank that does business with merchants enabling them to accept credit cards. A merchant has an account with this bank and each day deposits the value of the day’s credit card sales. Acquirers buy (acquire) the merchant’s sales slips and credit the tickets’ value to the merchant’s account.

Acquiring Processor:

The processor provides credit card processing, billing, reporting and settlement, and operational services to the acquirer. Many financial institutions hire a third party for more cost-effective bankcard processing.

Address Verification (AVS):

A service provided through merchant services in which the merchant verifies the cardholder’s address. Primarily used by mail/telephone order merchants to combat fraud. Not a guarantee that a transaction is valid.

Adjustment

An Exception Item initiated in accordance with these Rules by an Acquirer Member or Acquirer Processor to correct an error in the processing of a STAR Transaction.

Affiliate:

Any person or entity which directly or indirectly controls, is controlled by, or is under common control with another entity.

Affiliated Retailer:

Any natural person or organization (including a corporation, partnership, proprietorship, association or cooperative) which is franchised by, or which is controlled by or is under common control with, a STAR Merchant. For purposes of this definition, the terms “controlled by” and “under common control with,” as used with respect to any person or organization, shall mean the possession of the power to direct or cause the direction of the management and policies of such person or organization, whether through the ownership of assets or voting securities.

Affinity Card:

A credit card issued in conjunction with an organization or collective group; for example, profession, alumni, retired persons association. The card issuer often pays the organization a royalty.

Altered Card:

A card on which the original embossed or encoded information has been altered for fraudulent purposes.

ANSI:

American National Standards Institute.

ANSI Prefix:

See “PAN Prefix.”

Approval or Approved:

The Authorization or the positive completion of an Authorization Request by, or on behalf of, an Issuer Member.

Approved Auditor:

An internal or external auditor that STAR has approved as being qualified to complete a Security Compliance Review. The qualifications must include experience and education pertaining to electronic data processing (EDP) and auditing. Generally, the experience requirement is evidenced by a professional certification, such as a Certified Public Accountant (CPA), Certified Information Systems Auditor (CISA), Certified Bank Auditor (CBA) or Certified Internal Auditor (CIA). The education requirement is satisfied by successfully completing auditor-training pertaining to STAR Network security and ANS X9.8 and X9.24. This education requirement must have been completed within the current calendar year or no more than twenty-four months before completing any Security Compliance Review.

Arbitration:

The procedure used to determine responsibility for a chargeback-related dispute between two members.

Assessments:

Fees paid quarterly by members to VISA and MasterCard to support marketing and operating activities.

Association:

An organization owned by members, which services and obtains processing services for members and functions as a principal/proprietary member of VISA or MasterCard.

ATM Interchange Fee:

The fee paid to the Acquirer Member by the Issuer Member for a STAR ATM Transaction as established from time to time by the STAR Network.

ATM System:

The telecommunications and processing system operated by or on behalf of an Acquirer Member to process STAR Transactions initiated through the Acquirer Member’s STAR ATMs or STAR POB Terminals. The ATM System includes all elements of the processing system from the ATM or POB Terminal to the interface with the STAR Switch.

Authentication:

The process by which Authentication Tokens are verified to establish the identity of a STAR Account Holder.

Authentication Programs:

Authentication Programs by which a STAR Account Holder is authenticated when performing STAR Internet Transaction(s) using the Authentication Tokens appropriate to the program. In the Card Swipe Authentication Program, the Account Holding Member authenticates the Track 2 information and a PIN (this program is not currently supported by the STAR Network). In the eSign Authentication Program, the Account Holding Member authenticates a Secret and other Authentication Tokens. In the Retail ID Authentication Program, a third party authenticates a Secret and other Authentication Tokens on behalf of the Acquirer Member. In the Bill Payment Authentication Program, a third party authenticates non-secret data known by the STAR Account Holder and the bill payor but not commonly known information. (Effective June 1, 2003)

Authentication Token:

A Secret issued to or chosen by a STAR Account Holder, and other data, which is used to verify the identity of the STAR Account Holder. In the eSign Authentication Program, the Authentication Token is an Authenticator-issued Secret and additional data that must include a PAN or ePAN. In the Retail ID Authentication Program, the Authentication Token is a Secret and additional data issued by a STAR Network-approved third party. For the Bill Payment Authentication Program, the Authentication Token may be non-secret data known to the STAR Account Holder and the bill payor but not commonly known information (e.g., bill payor account number or information present on the bill payor’s hard copy bill). The method for creating, distributing and authenticating Authentication Tokens in the Retail and Bill Payment Authentication Programs must be approved for use by the STAR Network.

Authenticator:

The entity that issues and authenticates Authentication Tokens. An eSign Authentication Program Authenticator is the Account Holding Member. A Retail ID Authentication Program Authenticator is a STAR Network-approved third party that authenticates Authentication Tokens on behalf of an Acquirer Member. A Bill Payment Authentication Program Authenticator is the bill payor or its agent that authenticates Authentication Tokens on behalf of an Acquirer Member. (Effective June 1, 2003)

Authorization:

The act of ensuring the cardholder has adequate funds available against his or her line of credit. A positive authorization results in an authorization code being generated, and those funds being set aside. The cardholder’s available credit limit is reduced by the authorized amount.

Authorization Approval Card:

The numerical code designated by the issuer, given to a sales transaction as verification that the sale has been authorized. The authorization code is always included on the merchant sales draft.

Authorization Center:

A department within Merchant Processors that electronically communicates a merchant’s request for authorization on credit card transactions to the cardholder’s bank and transmits such authorization to the merchant via electronic equipment or by voice authorization.

Authorization Request:

A transaction request sent from an Acquirer Member, Processor, Merchant or Internet Merchant to an Issuer Member for Approval.

Auto Representment:

Chargebacks (credit not issued, transaction not authorized, etc.) that were automatically resolved by FDC on the merchant’s behalf without their knowledge or intervention.

Automated Bill Payment:

The crediting of funds from a consumer’s account to a company’s account for the payment of a consumer’s bill or obligation.

Available Balance:

The amount of funds that may be accessed by a Cardholder for a Transaction from an Access Account.

Available Credit:

The difference between a cardholder’s credit limit and the present balance on the account, including outstanding transactions not yet received through interchange.

Average Ticket:

The average size of a merchant bankcard transaction. Generally used in pricing decisions and calculations.