Credit card industry terminology

These terms have been defined to help you understand the concepts and procedures surrounding the credit card industry.

Acquiring bank
The financial institution where the merchant’s bank account is set up for receiving credit card payments. The “Merchant” receives a merchant ID from the bank. You may have separate merchant IDs for various locations, warehouses, or divisions.
Acquiring network
The network used to transfer electronic payments between the acquiring bank and the payment processor. The bank determines which network(s) the bank will support. Acquiring networks are also known as clearing houses.
Card ID
The Card ID code is a three- or four-digit code that is typically displayed on the back of the credit card. This code helps determine that the customer placing the order possesses the credit card and that the card account is legitimate. This is one way to help prevent fraud. Each credit card company has its own name for the Card ID, but the ID functions the same for all major card types: VISA refers to the code as CVV2, MasterCard refers to the code as CVC2, and American Express refers to the code as CID.
Card Not Present
Any type of transaction where the credit card cannot be physically swiped. Card Not Present transactions are also referred to as MOTO (mail order/telephone order). Internet transactions, phone transactions, or credit card numbers keyed manually are in this category.
Card Present
The credit card is physically swiped at the time of the sale. Card Present transactions are typically used in retail environments
Electronic payments (EP)
Electronic transfer of funds and systems that support EP transactions.
Merchant
Your Distribution SX.e company.
Payment processor
A company, often a third party, appointed by a merchant to handle credit card transactions for merchant acquiring banks.
Purchase card
A credit card issued to a corporate or government entity for the purpose of authorizing an employee to purchase low-ticket items on behalf of the entity without the need to go through a formalized procurement process. Used primarily in business-to-business or business-to-government purchase transactions.
Tokenization
A process of, “...substituting a sensitive data element with an easily reversible benign substitute. Tokenization can be used to safeguard sensitive data involving, for example, bank accounts, financial statements, medical records, criminal records, driver's licenses, loan applications, stock trades, voter registrations, and other types of personally identifiable information.” [Wikipedia]