A 3-D Secure is a security tool for online credit card purchases that prevent fraud. Every time a consumer makes an online transaction, it makes it easier for the acquirer and issuer to exchange customer information.
This allows merchants to verify customers’ identification, minimizing identity fraud and the number of chargebacks for unauthorized transactions.

An acquirer is a bank or other financial organization that manages payment processing for a merchant, including debit card and credit card transactions.

A technique for confirming a customer’s identity during an online purchase or other card-not-present transaction is the Address Verification Service (AVS). By requesting the user to provide their address and then comparing it to the address on record with the issuing bank, it confirms the customer’s identification.

The last step in an unresolved transaction dispute is arbitration. If the issuing and acquiring banks are unable to settle the disagreement amicably, they each offer their side of the story to the credit card company. The credit card company’s decision is final and carries fees that must be paid by the loser.

The process of requesting the issuing bank to release funds so that a transaction can be completed is known as authorization. It is the process of making sure that the credit card is able to cover the transaction’s cost. In response to an authorization request, the issuer may answer with a code designating one of the following outcomes: authorized, denied, referral/call, hold/pick up a card, invalid account number, or expired card.

It’s the first four to six-digit number on a payment card. They specify the type of card, the issuer’s name, and the name of the bank or other financial organization that issued the card.

For financial organizations that engage in international transactions, a business identifying code, or BIC, is a special identification number. The Society for Global Interbank Financial Telecommunication (SWIFT) assigned it.

A network of issuers and acquirers that process a particular brand of payment cards is known as a card association or card brand. Card brands are businesses that enable credit card and debit card payments by lending money to retailers and collecting repayment from cardholders. Examples of such businesses include Visa, Mastercard, and American Express.

Any transaction that doesn’t involve a real credit or debit card being swiped through a point-of-sale terminal is known as a CNP(Card-not-present) transaction. CNP transactions frequently take the form of online purchases where the customer inputs their credit card information or phone orders where the customer gives their credit card information over the phone.

The Card-Present transaction is a type of transaction where a credit or debit card is actually swiped.

Each credit or debit card has a card security code (CVC2, CVV2, CID), which is printed above the embossed digits on the card’s front or on the signature panel. It serves as a tool for card-not-present transactions to avoid fraud. It has either three or four digits.

A chargeback is a process of returning money back to a consumer after disputed credit or credit card charge. In contrast to a refund, a chargeback requires communication between the banks of the clients (issuer and acquirer) rather than the customer and merchant.

An acquirer charges a merchant a chargeback fee to cover the costs of handling a chargeback’s administrative requirements. The merchant account agreement between the acquirer and the merchant specifies the fees.

Compelling Evidence is a type of proof that a merchant must present in order to dispute a chargeback. It can contain written correspondence with a customer, delivery confirmations, data confirming biometric payments, and other written proof that the merchant complied with the terms of the client’s contract.

A credit card is a card used for making payments that are provided by a financial institution. It is linked to a line of credit that the cardholder can use to borrow money to make purchases. It differs from a debit card, which uses a bank account instead of a line of credit to make purchases.

CRM is software used by companies to store information on all types of customers whether they are previous, current, or potential.

A debit card is a form of payment issued by a financial institution that is linked to a bank account that the cardholder can use to withdraw funds to make purchases. It differs from a credit card in that the latter uses a line of credit as opposed to a bank account.

A merchant can object to a possibly fraudulent or other unlawful payment dispute by using a dispute response. In a successful dispute resolution, the merchant offers some proof proving the validity of the initial transaction and gets the money they lost in the initial dispute back. Responses to disputes may be sent automatically or manually.

One of Mastercard’s two systems for handling credit and debit card transactions is referred to as a dual messaging system. With a dual message system, the merchant sends two distinct messages for the requests for settlement and authorization. Transactions involving signature confirmation are required.

By using Dynamic Currency Conversion (DCC), cardholders who conduct business with foreign retailers can execute transactions in their own currency rather than the currency of the retailer.

Electronic Fund Transfer is the transfer of money from one bank account to another online with a bank employee’s involvement.EFTs include things like ATM transfers, credit and debit card transactions, direct deposit payments, automatic debit payments, cash transfers over the phone, and electronic bill payments.

Friendly fraud occurs when a customer asks for a chargeback for a seemingly innocent reason, such as when a family member makes a purchase without the customer’s knowledge, when the customer genuinely forgets that they had made a purchase, or when the customer makes a mistake related to their failure to understand a policy like a return policy. The customer is not knowingly or willfully committing fraud, which is a significant distinction between friendly fraud and other types of chargeback fraud.

To cover the transaction processing cost, the acquirer has to pay some amount to the issuer this is called an Interchange fee. The credit card networks determine these charges. Usually, the acquirers pass them to the merchants in the form of extra costs.

Acquirers and processors engage an independent sales organization, or ISO, to carry out tasks including sales and customer support.

The bank that issues cards is the issuer. It is part of a card association and pays the cardholder on the association’s behalf. Technically, not every issuer is a bank. Certain card organizations, like American Express, act as their own issuing banks, skipping the formality of using a separate issuing institution.

MATCH list stands for Member Alert to Control High-Risk Merchants. It is a list of merchants who are blacklisted. They are no longer allowed to process payments. A merchant may be placed on the MATCH list for a variety of reasons, such as having too many chargebacks, accepting an excessive number of unauthorized or counterfeit transactions, making changes to the company without the acquirer’s permission, breaking the terms of the merchant agreement in other ways, or even engaging in overt criminal activity like money laundering. The only currently available and frequently updated Terminated Merchant File (TMF) is the MATCH List.

The account that a merchant has with an acquirer that enables the processing of payment card transactions is known as a merchant account. Funds from issuers are deposited by the acquirer into the merchant account.

The acquirer establishes a merchant account reserve to keep back a percentage of the merchant’s cash as a security deposit in the event that the merchant is unable to meet its financial commitments for whatever reason.

A merchant’s type of business is identified by a four-digit number called a Merchant Category Code (MCC). When a company first begins accepting a particular credit card as payment, they are assigned by the credit card issuer.

The contract that establishes a merchant account and lists the terms and obligations related to the account is known as a merchant service agreement. It is made between the acquirer and the merchant. It’s also referred to as a merchant processing agreement occasionally.

A merchant account is given a merchant identification number (MID), which is a special alphanumeric identity. At several points of the transaction processing process, it is utilized to identify the account.

Negative Option Billing is a type of subscription billing where customers obtain free goods or services. Then they must explicitly choose not to receive additional goods or services or are enrolled automatically in a subscription plan.

It refers to peer-to-peer or person-to-person payments made via apps like Zelle, Venmo, and CashApp.

The Payment Card Industry Data Security Standard (PCI DSS) is a set of industry requirements for businesses, financial institutions, manufacturers of payment devices, software developers, and other parties involved in the transmission of payments. They are made to safeguard cardholder and account information.

A customer can use a payment dispute to challenge a credit or debit card transaction that they believe to be fraudulent. The circumstances leading to the merchant returning payment to the customer are discussed between the issuer and the acquirer. Both the customer and the issuer can start a dispute.

The platform that receives transactional data and enables its secure delivery to a payment processor is known as a payment gateway. It might be software- or hardware-based. Payment gateways are where certain crucial steps in the transaction process take place, including starting the authorization process, figuring taxes, converting currencies, starting fraud detection systems, and processing refunds.

A system called a payment processor handles transactions involving card associations, the acquirer, and the payment gateway. Processing authorization requests between a gateway and an issuer as well as chargebacks and representations between an issuer and an acquirer are two aspects of the transaction process that go via a payment processor.

The final stage before potential arbitration in a chargeback dispute is pre-arbitration. That is effectively the last chance for the disputing parties and their banks to come to an agreement before the card brand comes in and arbitrates the matter to a conclusion.

The formal act of a merchant requesting payment is called presentation. The data provided by the merchant to the issuer in a payment card transaction is what is used to make the payment request.

An alphanumeric code known as a chargeback reason code identifies the claimed reason for a chargeback. Each brand of the card has its own distinct set of reason codes.

Recurring billing, commonly referred to as subscription billing, is a business strategy in which customers are routinely and automatically charged in return for signing up for an ongoing good or service.

The process of responding to chargebacks is called Representment. It enables the merchant to recover income that was lost as a result of the chargeback and to present proof to support the validity of the chargeback.

A retrieval request is a process through which a cardholder or issuing bank asks a merchant for details about a specific transaction. Because it resembles the initial stage of a chargeback, it is frequently referred to as a “soft chargeback.”

MasterCard’s version of 3-D anti-fraud and identity verification protocols is known as SecureCode.

When the acquirer and issuer exchange data or money to complete a sales transaction, this is known as a settlement.

Terminated merchant files (TMFs) are blacklists of merchants who aren’t allowed to process payments anymore. Currently, the MATCH List is the industry standard TMF.

Transaction information documents (TIDs) are documents that are sent from the acquirer to the issuer regarding questionable transactions. It can include items such as sales receipts, invoices, shipping receipts, and tracking numbers.

A Value-Added Reseller (VAR) sheet consists of information about a merchant, such as a merchant account information, MID, processor information, and MCC. Also known as a parameter sheet or a tear sheet, it provides information about the product.

A virtual payment terminal is a tool that allows businesses to process payments online without using hardware at the point of sale.

VCMP (Visa Chargeback Monitoring Program) is a program that Visa uses to monitor merchant accounts at risk of chargebacks.

The Visa Claims Resolution (VCR) program simplifies and standardizes the chargeback and dispute resolution process associated with Visa cards.

Visa Secure is Visa’s version of 3D Secure anti-fraud and identity verification technology.

Win rate is a statistic that measures how many successfully disputed chargebacks there are compared to the total number of disputed chargebacks. In order to evaluate the relative success of a merchant’s chargeback management strategy, this metric is invaluable.