Glossary of Terms

AVS (Address Verification Service) A service used to verify that the billing address and zip code supplied by the customer match the address where credit card statements are sent that is on record at the card-issuing bank. AVS is supported in the US only. The purpose of AVS is to reduce the likelihood of fraud, and so the discount rate is usually lower.   Authorization A request to the payment processor, in our case, First Data Merchant Services (FDMS) , to approve the reservation of funds in a customer's account. The request can involve several transaction types, including Auth, Pre-Auth, Post-Auth, Re-Auth, and RePre-Auth. Auth A transaction type in which a transaction is preauthorized and postauthorized in one step. Auth is used only to process purchases of goods or servicesthat do not require physical shipment, e.g., donations, registrations, or "soft" goods that are delivered electronically. An Auth is sometimes referred to as a Sale. Batch A group of transactions that have been captured and are waiting for settlement. Billing Address The address to which a Customer's credit card billing statement is mailed. It is used to help verify that the Customer is the actual owner of the credit card he/she is using. (see AVS) Captured The status of a transaction that has gone through Auth or PostAuth and is waiting for settlement. Card-Not-Present Pertaining to a credit card transaction that does not require the cardholder and card to be physically present. All Internet transactions are card-not-present transactions. Card-Present Pertaining to a credit card transaction in which the cardholder and the card are physically present. Typically, the credit card passes through a card reader and the cardholder signs a receipt. Typically, the Discount Rate for Card-Present transactions is lower than the Discount Rate for Card-Not-Present transactions. CVM (Card Verification Method) A method used to ensure that a credit card being used in a purchase is in the possession of its owner. The CVM security code is a 3 or 4 digit code imprinted on the physical credit card, but not embedded or encrypted in the magnetic stripe. The code is a 3-digit number located on the signature strip on the back of Visa and MasterCard cards, after the card number. It is on the front of American Express cards, and it is 4 digits long. Chargeback The reversal of a previously Settled transaction in which the merchant bank debits the amount of the sale from the merchant's account because the cardholder has disputed the charge. ClearCommerce Hosting Engine The name of the software that MIT uses to process credit card transactions through FDMS. Credit A transaction type that transfers funds to the cardholder's account, rather than from the account. This transaction type is typically used to refund a customer's money for an order that was previously settled, e.g., returns or overcharges. Customer The individual who is purchasing the goods or services from the Merchant and using a credit card to pay. Digital Receipt An electronic (email) acknowledgement of an order placed from a commerce-enabled web site sent to the customer placing the order. It is merely for the convenience and assurance of the customer. It has no legal standing since email can be lost or forged. Discount Rate (or Fee) The fee a merchant pays to FDMS for acquiring the merchant's transactions. The fee is a small percentage of each purchase. These rates are negotiated between CAO and FDMS. The actual rate varies depending on several factors, including the type of card, how the order is placed, and whether CVM and AVS are used. Entity ClearCommerce refers to many things, such as Stores, by their entity number. FDMS (First Data Merchant Services) The bank that MIT contracts with to enable merchants to accept and process credit card payments. Merchant The organization (such as an MIT department) accepting credit card payments for the goods or services they provide. Merchant ID (MID) A number issued to a merchant by FDMS. FDMS uses the Merchant ID to identify a specific merchant in credit card transactions. Each store in ClearCommerce must have its own Merchant ID. Order A record of a request for goods or services initiated by a customer. Order ID A unique identifier assigned to a customer order in ClearCommerce. Partial Shipment A process in which a store ships/provides only some of the goods/services in a single order. Therefore, the PostAuth amount would be less than the amount of the approved PreAuth for the order. The configuration for each ClearCommerce store determines how partial shipments and their associated PreAuths are handled. Point-of-Sale A facility, such as a web form, for the merchant to enter a new customer order in ClearCommerce. It is used by a merchant on behalf of the customer, who may initiate the order in person, by phone, fax, or other method. PostAuth A transaction that puts a PreAuth transaction into a Captured state for settlement. In the case of partial shipments, the PostAuth amount may be less than the PreAuth amount. By law, PostAuths can be initiated only after the purchased goods have been shipped. PreAuth A transaction type in which a cardholder's account is verified to be in good standing, that is, the card is valid and has not reached its limit. Any applicable Address Verification Service checks have been performed and approved. If the verifications are approved, the total amount of the order is reserved against the cardholder's account balance. PreAuths are used if goods are to be physically shipped or in other cases for which the merchant must first verify whether the order can be fulfilled. An approved PreAuth is followed by a PostAuth, which prepares it for settlement. Refund See Credit. Return See Credit. Sale See Auth. SSL (Secure Socket Layer) A piece of computer software that encrypts messages sent over the Internet to prevent criminals from eavesdropping on them. All of the ECommerce team's applications use SSL to keep credit card numbers confidential when they are transmitted over computer networks. When a web page URL starts with "https:", it is using SSL to encrypt both the web request and the response you see on your browser. Never enter credit card numbers into a web form that is not on an https URL or send them by unencrypted email. Settlement A process in which money is transferred between a merchant and a cardholder. MIT settles all captured transactions in ClearCommerce automatically once a day at midnight. Store The entity in ClearCommerce that accepts and processes credit card payments. It represents a Merchant's organization. Terminal ID (TID) A number assigned by FDMS to identify a specific point-of-sale terminal. For Internet transactions, one TID is typically assigned to each merchant web site or business unit. See also Merchant ID (MID). Transaction A record of each action that is taken on an order. An order may have multiple transactions, e.g., a Sale and a Credit. Transaction Type A label identfying the nature of the transaction and determines how the transaction will be handled. For example, a PreAuth transaction reserves funds. The most common Transaction Types are Auth, PreAuth, PostAuth, Credit, and Void. Void A transaction type that cancels a transaction that has not yet been Settled.

merchantservices@mit.edu