Welcome to the Merchant Warehouse Glossary. This section has been designed to provide easy to understand and meaningful definitions to common phrases and terms used in the payment and credit card processing industry.
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ABA Routing Number
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The ABA Routing Number is the 9-digit number assigned to individual banks to identify them. It is assigned by the American Banker’s Association, and is used to facilitate the electronic routing of funds from one bank account to another during an ACH transfer. The ABA...
ACH Process
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In accordance with the rules and regulations of ACH, no financial institution may simply issue an ACH transaction (whether it be debit or credit) towards an account without prior authorization from the account holder (known as the Receiver in ACH terminology). An ACH entry...
Acquiring Bank
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An acquiring bank or merchant bank performs many functions in the world of electronic commerce and internet transactions. A true acquiring bank does not have a building or an office where you can walk in and open an account. They perform vital functions without requiring a...
Address Verification Service (AVS)
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The Address Verification Service (AVS) validates a credit card transaction when neither the card nor the cardholder is present by verifying the cardholder’s address against the records of the card issuing bank. The AVS was created in response to a need to deter fraud and...
American Express
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American Express, also referred to as “AmEx” or “Amex,” is a diversified international financial services company headquartered in New York City. American Express was founded in 1850 and has major branch offices in locations throughout the world. The company is best known...
Annual Fee
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An annual fee is any fixed charge that banks or other financial institutions charge for the use of merchant accounts, credit cards or other financial instruments. Faced with rising costs and increased competition, banks have removed the annual fees for some instruments...
Apple Passbook
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Apple Passbook, an application designed to integrate bar codes with iPhones and iPod Touch, enables consumers to make payments with their mobile devices, leverage credit and debit cards to pay for goods and services and provide digital coupon information at checkout stations....
Application Fee
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An application fee is any charge paid by a potential customer who is asking to be granted permission, access, credit or other services from any institution, financial or otherwise. Application fees for merchant accounts are fairly standard. The application fee pays for the...
Arbitration
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Arbitration is a conflict resolution process outside of the court system between two entities that agree to be bound by the arbitrator’s decision. Whether arbitration goes on between individuals, companies, unions or nations, it is essentially the same process. Arbitration...
Authorization
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An Authorization is a request made by a customer through a merchant to a credit card payment processor in order to approve the reservation of funds in a customer’s account. An authorization essentially reduces the customer cardholder’s credit limit, however, it does not...
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