A Payment Industry Learning Center | Midigator University

Midigator University

The payment industry is constantly changing. It can be overwhelming to keep up with different terms, regulations, and processes. At Midigator, we strive to remove this complexity and simplify the challenge of payment risk management. That’s why we created Midigator University, a resource for everything you wanted to know about the payment industry.

Payment Industry Terms

Use Midigator’s simplified explanations and definitions to understand complex payment industry terminology.

Industry Terms

3D Secure

3D Secure is a fraud prevention tool used by online merchants. It helps verify that…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Acquirer

An acquirer is a bank or financial institution that operates on the merchant’s behalf to…

Jennifer MeredithSeptember 26, 2018

Industry Terms

Address Verification Service (AVS)

Address Verification Service (AVS) is an identity verification tool used by eCommerce merchants to reduce…

adminSeptember 13, 2018

Industry Terms

Allocation

Visa manages disputes with two workflows: allocation and collaboration. The reason code the issuer assigns…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Arbitration

If a transaction dispute can’t be resolved with the standard chargeback process, the issue can…

adminSeptember 13, 2018

Industry Terms

Authorization Request and Authorization Code

Before finalizing a transaction, the merchant must submit an authorization request to the customer’s issuer.…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Average Monthly Sales Volume

The average monthly sales volume is calculated as the total value of sales processed in…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Average Monthly Transaction Volume

The average monthly transaction volume is calculated as the total number of transactions processed in…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Average Ticket Amount

The average ticket amount is calculated as the net value of sales divided by the…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Bank Identification Number (BIN)

A bank identification number (BIN) is used to uniquely identify each bank or financial institution…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Billing Descriptor

A billing descriptor is the short explanation of the transaction that appears on the cardholder’s…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Card Associations or Card Networks

Some card brands, like Visa and Mastercard, are part of a card network or association.…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Card Brands

Card brands facilitate credit and debit card payments. They essentially lend funds to merchants and…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Card Security Code (CVC2, CVV2, CID)

Every debit and credit card has a card security code (sometimes referred to as CVC2,…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Card-Not-Present (CNP) or Card Absent Environment

A card-not-present (CNP) transaction happens when the physical card is not read with a point-of-sales…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Card-Present

A card-present transaction happens when the physical card is read with a point-of-sales (POS) terminal.…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Chargeback

A chargeback is a consumer protection mechanism. It ensures cardholders don’t have to pay for…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Chargeback Fee

Most chargebacks come with a fee. The chargeback fee is used to pay for the…

Jennifer MeredithSeptember 21, 2018

Industry Terms

Chargeback Prevention Alerts

Chargeback prevention alerts are a dispute resolution tool. If the issuer is a member of…

Jennifer MeredithSeptember 21, 2018

Industry Terms

Chargeback Reason Code

The issuer assigns a reason code to each chargeback to help the merchant understand why…

Jennifer MeredithSeptember 18, 2018

Industry Terms

Chargeback-to-Transaction Ratio

Each card brand carefully monitors the risk that individual merchants pose. One way the card…

Jennifer MeredithSeptember 21, 2018

Industry Terms

Collaboration

Visa manages disputes with two workflows: collaboration and allocation. The reason code the issuer assigns…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Compelling Evidence

Compelling evidence is certain documents that a merchant can submit with a chargeback response to…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Credit Card

Credit cards provide a line of credit to cardholders to purchase goods or services. Credit…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Customer Relationship Management (CRM)

Businesses use a customer relationship management (CRM) system to store information about their various contacts…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Debit Card

Debit cards withdraw funds directly from a checking or savings account so the cardholder can…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Dispute Condition

Visa disputes are managed with one of two workflows: allocation or collaboration. Within those two…

Jennifer MeredithSeptember 18, 2018

Industry Terms

Dispute or Payment Dispute

A payment dispute is a consumer protection mechanism. Cardholders have the right to dispute a…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Dispute Response

Dispute responses allow merchants to challenge illegitimate disputes. The purpose of a dispute response is…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Dual Message System

Mastercard offers merchants two ways to process payment card transactions. With the dual message system,…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Dynamic Currency Conversion (DCC)

Dynamic Currency Conversion (DCC) is a service provided to cardholders when they shop with international…

Jennifer MeredithSeptember 17, 2018

Industry Terms

False Positive

In regards to risk management, a false positive is a transaction that has been incorrectly…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Friendly Fraud

Friendly fraud happens when a shopper makes a legitimate purchase but later requests a chargeback…

Jennifer MeredithSeptember 17, 2018

Industry Terms

High-Risk Merchant and High-Risk Merchant Accounts

Some merchants are considered high-risk because they have the potential to be a financial liability…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Independent Sales Organization (ISO)

Rather than maintain their own in-house teams for sales, customer support, etc., many acquirers and…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Interchange Fee

Each credit or debit card transaction a merchant processes is accompanied by an interchange fee,…

Jennifer MeredithSeptember 17, 2018

Industry Terms

ISO Agent

An ISO agent is essentially a salesperson, an individual contracted to sell services provided by…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Issuer or Issuing Bank

An issuing bank is the cardholder’s bank. As a member of the card associations, issuing…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Mastercard Excessive Chargeback Program

Mastercard’s Excessive Chargeback Program (ECP) is used as both a penalty for excessive chargebacks and…

Jennifer MeredithOctober 25, 2018

Industry Terms

Mastercard SecureCode

Mastercard SecureCode is a fraud prevention tool used by online merchants. It helps verify that…

Jennifer MeredithSeptember 17, 2018

Industry Terms

MATCH List

The Member Alert to Control High-Risk Merchants (MATCH) List is a database of merchants who…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Member

Card associations have two different types of members. Members can be licensed to issue cards…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Merchant Account

An acquirer provides a merchant account so a business can accept and process payment card…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Merchant Account Reserve

The merchant’s acquirer will create a merchant account reserve to withhold a portion of the…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Merchant Category Codes (MCC)

A merchant category code (MCC) is a four-digit classification code use to describe a merchant’s…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Merchant Identification Number (MID)

The merchant identification number (MID) is a unique alphanumeric identifier assigned to a merchant account.…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Merchant Service Agreement

A merchant service agreement is a contract between a merchant and acquirer. Service agreements establish…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Negative Option Billing

Negative option billing is a sales method that is popular with eCommerce and MO/TO merchants.…

Jessica VelascoOctober 24, 2018

Industry Terms

Payment Gateway

A payment gateway is a software or device-based service that receives, protects, and shares transaction…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Payment Processor

A payment processor shares and receives data from the card associations, acquirer, and gateway in…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Pre-Arbitration Chargeback

The chargeback process consists of several different stages that allow for back-and-forth communication between the…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Recurring Billing or Recurring Transactions

If a cardholder agrees to pay recurring transactions, the merchant is authorized to charge the…

Jennifer MeredithSeptember 26, 2018

Industry Terms

Representment

The representment process allows merchants to respond to chargebacks. The purpose of representment is to…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Retrieval Request and Copy Request

An issuer may send a retrieval request to the acquirer to obtain additional information about…

Jennifer MeredithSeptember 17, 2018

Industry Terms

Single Message System

Mastercard offers merchants two ways to process payment card transactions. With the single message system,…

Jennifer MeredithSeptember 18, 2018

Industry Terms

Transaction Settlement

Transaction settlement is the process of moving funds from the cardholder’s account to the merchant’s…

Jennifer MeredithSeptember 18, 2018

Industry Terms

VAR Sheet

A Value-Added Reseller (VAR) sheet is a file that contains important payment processing information, such…

Jennifer MeredithSeptember 24, 2018

Industry Terms

Verified by Visa

Verified by Visa is a fraud prevention tool used by online merchants. It helps verify…

Jennifer MeredithSeptember 18, 2018

Industry Terms

Visa Chargeback Monitoring Program (VCMP)

Visa Chargeback Monitoring Program (VCMP) is used as both a penalty for excessive disputes and…

Jennifer MeredithOctober 25, 2018

Industry Terms

Visa Claims Resolution (VCR)

Visa Claims Resolution (VCR) is an initiative to streamline workflows and standardize rules for chargeback…

Jennifer MeredithSeptember 18, 2018

Industry Terms

Visa Merchant Purchase Inquiry (VMPI)

Visa Merchant Purchase Inquiry (VMPI) is a payment dispute resolution tool. VMPI allows issuers to…

Jennifer MeredithSeptember 26, 2018

Industry Terms

Win Rate

Win rate is a calculation that compares the number of successful chargeback responses against the…

Jennifer MeredithSeptember 18, 2018

Mastercard Reason Codes

Customers dispute transactions for numerous reasons. Each card network has a set of unique codes to categorize those reasons. Learn more about chargeback reason codes and dispute conditions below.

Mastercard Reason Code

Visa Reason Codes

Customers dispute transactions for numerous reasons. Each card network has a set of unique codes to categorize those reasons. Learn more about chargeback reason codes and dispute conditions below.

Reason Code Visa

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Mastercard Reason Codes

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