CheckGateway.com’s Glossary of Financial Terms (C-D)

Use CheckGateway.com as your information resource. Look through our glossary to get the details you need about merchant services, fraud protection and ACH processing.

Capture Only

A credit card transaction request to capture funds that were previously authorized, but NOT via the payment gateway. For this type of transaction, the merchant will submit the authorization code previously received from the issuing bank through some other means than a payment gateway request, e.g., by telephone.

Card Associations

Credit card issuing companies like American Express, Visa and MasterCard that govern the use of credit cards for payment transactions.

Card Code

A Card Code is a three- or four-digit number that appears on the back of a credit card (on the front for American Express). This code may be used to validate customer information on file with the credit card association.

Card Code Status

A value returned to a merchant by the processor indicating whether billing information provided by customer matches information on file at the credit card association for the cardholder associated with the credit card number and Card Code.

Card Not Present

Means a cardholder’s credit card is not physically presented to a merchant at the time of a transaction. This term is used in the payments industry to distinguish e-commerce merchants, such as those that operate via Web sites or from mail order/telephone order locations, from "brick and mortar," or retail merchants.

Card Present

Means a credit card is physically presented to a merchant by a cardholder at the time of a transaction. This term is used in the payments industry to distinguish "brick and mortar," or retail merchants from those that operate from mail order/telephone order locations or via Web sites.

Card Reader

A device that reads and transmits information stored in the magnetic stripe on a card.

Cardholder

An individual or business that establishes an account with a credit or debit card issuer. A cardholder is eligible to initiate a payment card transaction.

Cardholder Authentication Programs

Security programs created by Visa and MasterCard to provide identity authentication for Visa and MasterCard cardholders, and transaction protection for merchants. By registering for these programs, merchants minimize the risk of chargebacks and returns while providing optimal security for their Visa and MasterCard customers

Chargeback

A credit card transaction billed back to the merchant after a sale has been settled. Chargebacks are initiated by the card issuer on behalf of the cardholder. Typical cardholder disputes involve product delivery failure or product/service dissatisfaction.

Chargeback Code

A code provided to a merchant by the card issuing bank indicating the reason for the chargeback transaction.

Check 21

The Check Truncation Act of the 21st Century, a Federal Reserve Bank law allowing financial institutions the option to clear checks electronically rather than having to forward the original paper check. Also called: CTA and Check 21

Check Verification

A risk management process that verifies the trustworthiness of an electronic check transaction against an extensive high risk or bad check database.

Customer ID

A unique identification code assigned to a customer by a merchant, who may be associated with the invoicing or billing for a transaction.

Cut-Off Time

The time a merchant’s payment transactions are batched and electronically picked up by a payment gateway for processing.

Depository Financial Institution (DFI)

An Originating Depository Financial Institution (ODFI) or Receiving Depository Financial Institution (RDFI) that participates in an ACH network. Click here to link to our ACH flowchart.

Digital Certificate

Online identification that authenticates a consumer, merchant and a financial institution. Digital certificates are used to encrypt information exchanged in SET transactions. A certificate is a public key that has been digitally signed by a trusted authority (the financial institution) to identify the user of the public key.

Digital Signatures

Electronic signatures which cannot be forged. Instead it is generated from a computed digest of the text that is encrypted and sent with the text message. The recipient decrypts the signature and retrieves the digest from the received text. If the digests match, the message is authenticated and proved to be from the sender.