Download Key Terms and Definitions

Key Terms and Definitions
This glossary was prepared for the Canadian EMV Migration but the terms are applicable for the US.
Term
Acquirer
Payment Processor
Card Reader
Certificate
Certification
Authority
Chip Card
ECR
EMV
EMV Co
ICC
Integrated
Merchant
Issuer
Merchant Stand In
Processing
Offline Transaction
Online Transaction
Definition
An Acquirer is an organization authorized by the payment schemes to enable
merchants to process debit and (or) credit transactions. The acquirer establishes
a contractual relationship with the merchant and assigns the relevant
fees/discount rates for the merchant and ensures the merchant complies with all
regulations stipulated by the card schemes.
A Payment Processor is contracted by an Acquirer and can provide the
technology to enable a merchant to accept credit and debit card transactions
and processes these transactions on behalf of the merchant and the acquirer.
A secure device used to read card information (via magnetic stripe and/or chip)
required for payment transaction processing. The Card Reader may or may not
be integrated with a PIN pad.
The public key and identity of an entity, together with some other information,
that is rendered non-forgeable through the use of a private key by the
certification authority issuing that certificate
A trusted third party that establishes the public key for use by merchant and
links it to the owner.
A card that utilizes a chip technology to process some applications such as,
payment, loyalty and/or related transactions.
An Electronic Cash Register (ECR) processes specific retail functions which may
include card payments. Some ECR’s may have a card reader and PIN pad
integrated with the register.
Set of technical specifications jointly developed by Europay, MasterCard and Visa
(E, M, V) to provide standards for processing chip payment transactions. Use of
these standards ensures global interoperability of chip cards and devices. These
specifications are maintained by EMV Co, an organization owned and managed
by MasterCard, Visa and JCB.
Maintains EMV technical specifications and is responsible for type approval
process for terminal compliance testing (EMV Level 1 - terminal hardware
components; EMV Level 2 - EMV Kernel , Software.
Integrated Circuit(s) Card – refers to a chip card.
Merchants who have their register systems and card payment processing unified
into a single POS solution. The payment software application is often provided
by a third party vendor or VAR and is integrated within the merchant’s Electronic
Cash Register (ECR) to provide an interface to an Acquirer.
The financial institution who issues the credit or debit card to the customer or
consumer.
When a transaction is set to go online, however there is no communication to
the Issuer host. The merchant approves the transaction up to the POS floor limit
set by the acquirer.
Transaction is completed between the card and the terminal with no
involvement from the Issuer Host.
Transaction is completed by sending an online message from the POS all the way
up to the Issuer host – transaction is approved by the Issuer host
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Term
Online/Offline PIN
Payment
Application
Software
Payment Schemes
PIN
PIN Pad
POS
Register
Script
Stand Alone
Merchant
Terminal
Type Approval
Type Approval
Certificate
VAR
Definition
Online PIN is encrypted by the PIN pad and sent online to the issuer host for
validation.
Offline PIN is sent directly to the chip card and is validated by the chip. Offline
PIN is never sent to the host – only the result is passed.
Online or Offline PIN, as well as no cardholder verification, are all supported by
EMV standards.
An Acquirer or Merchant’s proprietary software that resides on the POS terminal
or PIN pad. This software handles the card payments and forwards the financial
transaction to the Acquirer for processing.
Are the payment brands including: Visa, MasterCard, Interac Association and
American Express. The payment brands establish industry operating regulations
for Acquirers and Issuers to facilitate coordination with merchants and
cardholders. Payment Brands in Canada also manage their proprietary networks:
Visa – VisaNet, Plus
THE EXCHANGE ATM network
MasterCard – BankNet, Maestro and Cirrus
Interac Association – Interac Network
American Express -American Express Network
Personal Identification Number – a numeric code used to validate the individual
who initiated the transaction via a payment card. The number is entered into a
keypad and is encrypted to travel along with the authorization.
A secure device where cardholders enter their PIN. The PIN pad may also have
card reading capabilities.
Point of Sale – Refers to a payment terminal or the device used at point of
purchases within the merchant retail location.
Please see ECR, Electronic Cash Register.
A command or string of instructions transmitted electronically by the Issuer via
the Terminal to update specific information on the chip card.
Merchants who have a POS terminal for handling card payments which operate
independently from the ECR.
An electronic device that accepts and processes payment transactions.
A process that tests and confirms compliance with EMV and/or other
specifications. Type Approval provides a level of confidence that interoperability
between compliant applications has been achieved prior to the device being
deployed.
Certificates required by the payment brands that demonstrate that devices and
PIN pads are EMV-compliant.
Value Added Reseller – A third party vendor who develops, certifies, maintains
and/or sells debit and credit software solutions created by themselves or other
companies to be used on a processor’s system.
For More Information:
Please contact your Acquirer/Payment Service Provider.
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