Before you can walk the walk –– or make a sale –– you need to talk the talk
For new merchant account Agents, getting started in the payments industry can feel like landing in a foreign country. Learning the most commonly used words in this new language is a good first step toward helping you become acclimated to the space and a true value-added partner for your customers.
Payment terms merchant account Agents must know.
Card present and card not present.
Let’s start with an easy one. When a customer presents a card and makes a payment face-to-face with a merchant, that’s an example of a “card present” transaction. When a customer makes a payment online or over the phone, it’s considered “card not present.” As the two worlds converge, there’s some gray area, such as a consumer scanning a QR code in person at a restaurant but paying online, which in most cases is card not present. Check with your payments partner if there’s any doubt on the type of payment or the fees your clients will pay.
Payment terminal or credit card reader.
Also, sometimes called a credit card terminal, these are the hardware devices that customers use to dip or tap their cards to initiate a payment transaction. Payment terminals can be non-integrated, which means the merchant has to manually upload payment data to the point of sale (POS) system or semi- or fully integrated.
Smart payment terminal.
These terminals are stand-alone and do not need to be connected to an additional POS system. They can support some of the reporting and management features of payments software.
EMV.
Short for Europay, Mastercard, Visa, EMV is a security technology that helps reduce credit card fraud at payment terminals. Cards equipped with EMV can be identified by the chip embedded in the card. These chips hold authentication certificates that are checked by the payment terminal when a purchase is made to confirm that the card is authentic and that the terminal has not been tampered with.
P2PE.
Certified, point-to-point encryption protects credit card data from the payment terminal to where the transaction is processed. It ensures that if a hacker steals data, it would be useless to them.
Tokenization.
Unlike encryption, which uses a code, tokenization replaces card numbers with randomly generated alphanumeric characters. Merchants can store tokens and use them if customers make additional purchases. Like encrypted data, tokens prevent hackers from ever seeing actual card numbers if they gain access to a POS system.
NFC (Near-Field Communication).
NFC allows two devices to communicate over short distances, about 4 centimeters (1.57 inches) or less, with other similarly equipped devices. Customers making payments with mobile wallets or contactless payment cards can simply tap them or hold them next to contactless terminals to complete a payment transaction.
What should merchant Agents call the players in a payments ecosystem?
It’s also important to unravel which participant handles different parts of a payment transaction:
Payment processor.
This company handles transactions for merchants, banks, and card brands.
Issuer.
The issuer is the credit union, bank, or other financial institution that issues the customer’s credit or debit card. After the cardholder makes a purchase, the issuer will pay the merchant.
Payment gateway.
This solution allows merchants to process ecommerce payments from an online storefront or hosted payments page. Payment gateways can also manage other types of payments, such as unattended payments at a kiosk, mobile app payments, or card-present payments.
Acquirer.
This is the bank or company (sometimes the payment processor) that deposits payments to merchant accounts.
Billing terms merchant Agents need to know.
You also need to be able to explain payment processing fees to your clients. Familiarize yourself with terms including:
Interchange.
Issuers charge interchange fees to merchants. These fees vary depending on the card network and what industry your merchant is in as identified by their Merchant Category Code (MCC).
Average ticket size.
This is the average size of a merchant’s card sales. This is one of the first questions a merchant must answer in the application process.
Monthly processing volume.
This is the total volume of payment card sales your merchant does in a month.
Chargeback.
A chargeback occurs when a cardholder disputes a charge. The amount of the charge in question is withdrawn from the merchant’s account while the charge is disputed. When this happens, the merchant has the opportunity to dispute it. A chargeback fee is typically charged to the merchant, and excessive chargebacks can mean the merchant is considered high-risk.
Acronyms for key regulatory standards.
PCI SSC (Payment Card Industry Security Standards Council).
The PCI SSC describes itself as a “global forum that brings together payments industry stakeholders to develop and drive adoption of data security standards and resources for safe payments worldwide.”
PCI DSS (Payment Card Industry Data Security Standard).
The common set of standards set by Mastercard, Visa, and other card associations aimed at protecting payment card data that merchants and third parties must adhere to in order to accept payments with those cards.
Speak the language.
Merchant account Agents have an important role in helping other stakeholders in the payment processing arena. Knowing what the key terms mean is vital in offering help and support to merchants and third parties that may know all the inside jargon. With these terms now in your lexicon, it will be easier to learn more about a career in the payments space.
Contact North American Bancard for next steps.
