Glossary of Terms

a b c d e f g h i j k l m n o p q r s t u v w x y z

Acquirer (merchant acquirer)
The bank which handles/processes a retailer's debit and credit card transactions and reimburses the merchant for the value of the sale. The bank or other financial institution will have a contractual agreement with the merchant and will charge a fee/commission for the service it provides.

APACS – Association for Payment Clearing Services
APACS is the industry body for the UK's major banks and building societies. It oversees money transmission and has responsibility for the co-operative aspects of the UK payments industry, including plastic cards. Visit their website.

Authorisation
The process whereby a merchant requests permission for the card to be used for a particular transaction.

ATM - Automated Teller Machine
A computerised self-service device permitting the holder of an appropriate card and PIN to withdraw cash from their account and access other banking services. Also known as a cash machine, cash dispenser or hole-in-the-wall machine.

AVS – Address Verification System
An automated system that allows merchants who accept card-not-present transactions via the phone, mail order or the Internet to verify the billing address of cardholders.

Biometrics
Biometrics is the name given to fraud prevention techniques which record a unique characteristic of the cardholder, like a fingerprint or how you sign your name, so that it can be read by a computer. The computer can then compare the stored characteristic with that of the person presenting the card to make sure that the right person has the right card.

CAM - Card Authentication Method
The means by which a plastic card is determined genuine and not counterfeit. The chip card provides the best CAM available.

Card Issuer
The bank, building society or other financial institution which issued the card and which has a contractual relationship with the cardholder.

Card Schemes
Organisations which manage and control the operation and clearing of transactions. Banks and building societies must be members of the appropriate schemes to issue cards and acquire card transactions. Examples of schemes are: Laser Card Services, Visa, MasterCard, Switch, American Express, Diners Club International.

Card Security Code
The last three or four digits of a number printed on or just below the signature panel on payment cards.

Cardholder Verification Method (CVM)
The means by which the presenter of the card may be identified as genuine, for example a signature or PIN.

Chargeback
A chargeback is a credit or debit card transaction, which has been returned unpaid by the cardholder's bank. This occurs when a cardholder informs their credit card issuer that a particular charge was not authorised or that goods or services were not delivered or provided as promised.

Chip & PIN
Chip & Pin is a more secure card payment method or system which is currently being introduced in the UK and will shortly be in use in Ireland and will dramatically reduce card fraud. A microchip (Chip) is embedded into the credit or debit card, which has highly secure memory and sophisticated processing capabilities. The information it holds ensures that the card is authentic and makes it difficult and expensive for a criminal to counterfeit. A Personal Identification Number (PIN) is a four-digit code, which is entered at the point of sale to prove that the person using the card is the genuine cardholder. The PIN is used instead of signing a paper receipt. Visit the Chip & PIN Ireland website.

Chip card
A plastic card containing a microchip which has highly secure memory and processing capabilities, which can be recognised by the gold, or silver, coloured contact plate on the front of the card. Chip cards are also known as integrated circuit cards (ICCs) or smart cards.

CIFAS - UK Fraud Prevention Service
CIFAS is an information exchange that helps its wide range of member organisations identify different types of fraud, including that on plastic cards.

CNP - card not present
A transaction where the customer is not present to sign for the purchase e.g. Internet, telephone and mail order

Counterfeit card
A card which has been printed, embossed or encoded so as to appear to be a legitimate card OR a card which has been validly issued but subsequently altered or re-encoded.

Cross-border fraud
Fraud perpetrated on a plastic card, or using a card number, in a country other than the country of issue.

Electronic commerce
These are CNP or Card Not Present transactions which are conducted over an electronic network where the buyer and merchant are not at the same physical location e.g. plastic card transactions via the Internet.

Electronic purse
Also known as e-purse, this is a pre-paid card which contains electronic value exchanged for goods and services. It can be disposable or re-loadable.

EMV definition
Europay, MasterCard and VISA International created a new standard called EMV, which ensures that, all Europay, MasterCard, and VISA branded smart cards and all smart card reading terminals work together to deliver global interoperability and enhanced security.

Encryption
A method of making information secret, so that only a person who knows the necessary key or password can understand or decrypt the information.

Floor limit
A limit on the value of each transaction, agreed between the merchant and acquiring bank, above which authorisation must be obtained by the merchant.

HCF - Hot Card File
An electronic file that distributes data about lost or stolen cards to retailers who subscribe to it. When a card is swiped as part of a normal transaction, it is automatically checked against the file and an alert is given if the card's details match those on file.

ICC - Integrated Circuit Card
See chip card

Intelligent detection systems
Computer systems used by the banking industry to help identify fraudulent card use before the loss is reported. Also known as knowledge-based systems and neural networks.

IPSO
The Irish Payment Services Organisation Ltd. (IPSO) is the umbrella body for payment services for financial institutions in Ireland. The company provides strategic and technical support to the payments industry in Ireland, a forum for consultation among participants, and represents the payments industry at national and international levels. Visit their website.

Laser Card

Laser is Ireland's only debit card which is linked to the cardholder's current account. It allows customers to pay for goods and services with a plastic payment card without having to go to the ATM or using a credit card. Laser Cardholders can also ask at the point of sale for Laser Cashback up to €100, the value of which is added on to the purchase price. The same terminal is used for credit cards as for Laser Cards.

Magnetic stripe/strip
The stripe that currently appears on the back of payment cards issued by financial institutions. It contains essential customer and account information, most of which is usually also embossed on the card.

PIN
PIN stands for Personal Identification Number. PINs allow you to use your cards in cash machines. Without the PIN, it is impossible to take out money from a machine. No-one else knows your PIN - not even bank staff or the police - and you should never tell anyone what your PIN is - it's your own secret code! Customers will soon be asked to enter a PIN at the point of sale instead of providing a signature. This method of authentication is much more secure and will dramatically reduce lost and stolen fraud.

POS (Point of Sale)

The location at which a sale is effected.

Pre-Authorisation
A pre-authorisation usually occurs at a hotel or similar (e.g. Bed & Breakfast, hostel, etc). It describes the process whereby the hotel staff request your payment card upon arrival. They swipe or dip the card and in most cases will request either a signature or your PIN.

For many years, hotels have had a practice of taking a deposit upon customer arrival. This deposit is to cover costs to the hotel in the event the customer leaves without paying the full bill. Before payment cards were used, hotels would haven taken this deposit either in the form of cash or cheque. Since payment cards were introduced, hotels now take what is referred to as a ‘pre-authorisation' on the payment card. This pre-authorisation earmarks a specific amount of funds to cover the hotel bill and incidentals such as catering, etc. Funds are earmarked until the bill for the hotel is settled in full. An account is not debited when a pre-authorisation is processed.

You are entitled to refuse a pre-authorisation when booking into a hotel, but if a hotel in which you are staying wishes to take an advance deposit then they are entitled to request one and if you do not have cash or a cheque to hand, then the payment card is the obvious next option. Keying in your PIN during a pre-authorisation simply verifies that you are the owner of the card. It is a security measure for the hotel and is normal practice.

Pre-authorisation is not permitted on Laser Cards.

Safecard
SafeCard was established by IPSO (Irish Payment Services Organisation Ltd.) Card Services to increase card fraud awareness in order to enable merchants and retailers to protect against it.

Skimming
The most prevalent form of counterfeit fraud whereby a card's magnetic stripe details are electronically copied and put onto another card.

Smart Card
See Chip Card