PLAIN PAYMENT LANGUAGE
Payment Terms, Explained in Plain English.
Use this guide when a statement, agreement, provider conversation, or system setting uses a word you do not recognize. Definitions are general; your documents and applicable rules control the exact meaning for your setup.
Standard definitions · No DATAONE-specific rates or partner terms
A–Z REFERENCE
Terms used across merchant payments.
The definitions distinguish commonly confused concepts without turning a general reference into a quote, compliance determination or contract interpretation.
- ACH
- The Automated Clearing House is the US electronic network used for bank-to-bank credit and debit entries. ACH payments follow network rules and move through financial institutions rather than card-payment rails.
- Card issuer
- The financial institution that issues a customer card and makes authorization decisions for that card.
- Card network
- The payment network that carries transaction messages and maintains operating rules between participants.
- Merchant ID (MID)
- An identifier associated with a merchant account or acceptance relationship. The exact label and use depend on the provider setup.
- Payment processor
- A merchant-side service participant that supports transaction processing and related settlement activities. Agreements define the exact role.
- Payment gateway
- A service that transfers payment data between a checkout or software system and the merchant-side payment acceptance path.
- Virtual terminal
- A software interface that can allow keyed payment entry when the configured acceptance relationship supports it.
- Funding
- The movement of settlement proceeds to the merchant account, subject to timing, adjustments, reserves and the applicable agreement.
- Reserve
- Funds held back under an agreement or risk policy before they may be released, if the setup includes a reserve.
- Refund
- A transaction credit sent back through the payment path after an original payment, subject to the configured system and applicable rules.
- Tokenization
- Replacing sensitive payment data with a token that can represent it in a configured system without exposing the original value.
- Card-on-file
- Payment credentials or a token retained for a later transaction when the customer and applicable rules permit it.
- Recurring billing
- A schedule of repeated charges authorized under the configured agreement and customer permission.
- Acquirer
- The merchant-side financial institution or acquiring participant that supports acceptance and routes card transactions into the payment system. Merchant contracts may use related terms differently, so check the document.
- Assessment or network fee
- A charge associated with a payment network. It is separate from interchange and from the processor or acquirer's own markup, although statements can group the categories.
- Authorization
- The request and response used to check whether a transaction may proceed. An approval is not the same as final settlement and does not eliminate later disputes.
- Basis point
- One one-hundredth of one percentage point. One hundred basis points equal one percentage point.
- Batch
- A group of authorized transactions submitted for clearing and settlement. The timing and method depend on the merchant's setup.
- Cash discount
- A reduction from the posted regular price when the customer pays with cash. It is not simply another name for a surcharge; the displayed pricing and applicable rules matter.
- Chargeback
- A reversal initiated through the card-dispute process after a cardholder or issuer challenges a transaction. A merchant may have a limited opportunity to respond with records.
- Dual pricing
- The practice of displaying a cash price and a card price for the same item or service. Clear presentation and applicable law and payment rules still matter.
- Effective rate
- A comparison ratio commonly calculated by dividing selected processing costs by selected processed sales. Its meaning depends on what was included in both figures.
- Interchange
- A transfer fee within the card-payment system, generally paid from the acquiring side to the card-issuing side. The applicable amount can depend on transaction and card characteristics.
- MCC
- A four-digit merchant category code used to classify the type of goods or services a merchant provides. The classification can affect reporting, rules and transaction treatment.
- ODFI and RDFI
- In ACH, the originating depository financial institution sends entries into the network; the receiving depository financial institution receives entries for the account being credited or debited.
- PCI DSS
- The Payment Card Industry Data Security Standard is a set of technical and operational requirements designed to protect payment-account data. The exact validation duties depend on the merchant environment and relationships.
- Processor markup
- Charges set by the processor or acquiring relationship for processing and related service. A statement may express them as percentages, per-item charges, periodic fees or other line items.
- Residual
- In payment-industry compensation, recurring compensation tied by contract to merchant processing activity. There is no universal split, calculation method, ownership rule or payout timing.
- Settlement
- The process by which transaction obligations are calculated and funds move between participating institutions, leading to merchant funding subject to adjustments and timing.
- Surcharge
- An additional charge imposed on a card transaction under applicable law and payment rules. It is distinct from a properly presented cash discount or dual-price display.
Verification status: Every definition on this page was checked against current primary industry, standards-body, regulatory or government material. Surcharge, cash-discount, dual-pricing, PCI and ACH obligations can change or depend on jurisdiction and configuration, so confirm the rules that apply to your exact use.
COMMON QUESTIONS
Six answers about using the glossary.
Are these DATAONE-specific definitions?
No. These are general payment-industry definitions. DATAONE-specific rates, economics and proprietary program details are not included.
Is a cash discount the same as a surcharge?
No. A cash discount reduces a posted regular price for cash, while a surcharge adds a charge to a card transaction. Presentation, applicable law and payment rules matter.
Is dual pricing the same as showing one price and adding a card fee later?
No. Dual pricing displays both the cash and card price. A later-added card charge is a different presentation and may be treated as a surcharge.
Does PCI DSS compliance mean a merchant cannot have a data incident?
No. PCI DSS provides payment-data security requirements; validation does not guarantee that an incident cannot occur.
Does residual have one standard commission percentage?
No. Residual is a generic industry term for recurring compensation tied by contract to merchant processing activity. The split, calculation, ownership and timing are agreement-specific.
What should I do if my agreement defines a term differently?
Use the definition in the controlling agreement for that relationship and ask the responsible provider or qualified adviser to explain any conflict.
PUT THE DEFINITION BESIDE THE DOCUMENT