A
Acquiring Bank: See Merchant Account Provider
Address Verification Service (AVS): With AVS, the billing address provided by the buyer during checkout is validated against the billing address on file at the customer's card issuing bank or credit card association. The AVS response is added to the authorization response and appears in the Order review page.
Merchants can set Risk Tools to flag or accept orders based on the AVS response returned by the issuing bank and First Data. AVS allows merchants to reduce the risk associated with online or phone (card not present) transactions.
Annual Fee: A fee charged to merchants by some merchant account providers, which can be used to lower the discount rate. Some merchant account providers, such as Paymentech, charge a lower monthly fee instead of a higher annual fee.
Application Fee: This is a fee for processing the application paperwork and setting up a merchant account with some merchant account providers. Paymentech charges no application or setup fees.
Authorization: The process whereby a request is made by the merchant through First Data Merchant Services (FDMS), the Yahoo! Store Payment Processor, to the issuing bank (or credit card association) of the cardholder to ensure the cardholder has sufficient funds available for the transaction. If the authorization is approved, the issuing bank (or credit card association) replies with an authorization code and the amount of the authorization is set aside from the available credit of the cardholder. As this process happens during checkout, this is referred to as "real-time authorization". Authorization does not collect the funds but rather checks for sufficient funds to settle the order at the time of the authorization. Merchant later review the order and then capture the funds.
Merchants can disable real-time authorization in order to charge orders automatically or collect credit card information for processing offline (such as when FDMS is unavailable). Yahoo! does not recommend disabling real-time authorization as this can significantly increase the risk of processing fraudulent orders.
Authorization Code: A code sent by the issuing bank or credit card association containing AVS and CVV (if applicable) responses as well as the approval for the sale.
Authorization Floor: The amount at or below which sales do not require an authorization to complete the order. This amount is set in the settings for each payment processor linked from the Payment Center. By default, the amount is low ($10) and Yahoo! does not recommend raising the amount as this can increase your risk of processing fraudulent orders.
Authorization Headroom: The amount above an order total in an authorization request. You can adjust this amount in the settings for each payment processor linked from the Payment Center. Whenever you submit a transaction (click "Sale" or "Capture Funds" depending on your processor while viewing the order) and the amount you charge is larger than the originally authorized amount, the system must request a new, larger authorization to match the sale amount. This costs you several cents in transaction fees (depending on your merchant bank), and may fail if the customer is close to his credit limit. If you do not calculate tax & shipping costs in real time for most customers, you should add enough authorization headroom so that a second authorization is not required for most customers.
Because the amount authorized on a credit card is counted towards its credit limit, you shouldn't set the headroom any larger than necessary. Of course, any additional authorization amount is released when you finally submit the transaction.
Authorization Request: A message sent through FDMS to an issuing bank or credit card association to verify the cardholder has sufficient funds available for the transaction. If the transaction is approved, then a response is sent back to Yahoo! from the issuing bank or credit card association through FDMS.
Authorization Response: A message sent by the issuing bank or credit card association through FDMS to Yahoo! that contains an authorization code and other AVS and CVV (if applicable) response codes.
Automated Daily Batch Submission: The process whereby batches are submitted to FDMS for settlement. This process happens anywhere between 6-11 pm (PST) as Yahoo! attempts to balance the load on the payment processor by staggering the submission times. Merchants can turn off this option in the settings for each payment processor linked from the Payment Center. Merchants that turn off this option must submit batches manually by clicking the "Submit batch" link on the Transaction panel of an order.
Note: There are no batches associated with PayPal Website Payments Pro as transactions are settled immediately.
AVS: See "Address Verification Service"
B
Batch: A collection of transactions. Batches can be submitted manually by the merchant by clicking the "Submit batch" link in the transaction panel or the order, or set to submit automatically between 6-11 pm P.S.T. Batches which are pending (not submitted) cannot be reviewed prior to submitting. Only batches that have been submitted can be reviewed.
Note: There are no batches associated with PayPal Website Payments Pro as transactions are settled immediately.
Batch ID: After settlement, each batch is assigned an identification number by the payment processor. Merchants can click on the Batch ID links to review transactions in a particular batch. Merchants can access batches for review by clicking the "Review batches" link appearing in the transaction panel of individual order (Retrieve Orders > Order #) and then clicking the link for the batch to review.
Batch Processing: Batches are processed nightly by default (see automated daily batch submission). Merchants can also send batches manually. Batches are submitted to FDMS for settlement with the issuing bank or credit card association.
Note: There are no batches associated with PayPal Website Payments Pro as transactions are settled immediately.
Buyer: A customer that places an order on a merchant's site.
C
Capture: See settlement
Capture Funds (PayPal transactions only): Use this button to collect funds from an order. This settles the order and transfers the funds to your PayPal account.
Cardholder: A person with a credit card account with an issuing bank or credit card association. See also buyer.
Card Not Present: A transaction where the cardholder does not physically provide the card to the merchant for processing (online, phone, fax orders). These transactions are typically charged a higher discount rate due to the increased risk of fraud.
Card Present: A transaction where the cardholder presents the card to the merchant for payment as demonstrated by swiping the card through a point of sale (POS) terminal or imprinting the credit card. Lower fees are associated with card present transactions as these transactions have a lower incidence of fraud.
Card Verification Value (CVV): The three digit code printed in the signature panel on the back of Visa/MasterCard/Discover (a four digit code printed on the front for American Express).
Merchants can make CVV a required field to complete transactions in checkout. The CVV information is then sent to the issuing bank or credit card association to validate cardholder status. Merchants can select to flag or accept orders with invalid CVV information as a means of reducing the risk of fraudulent transactions.
Note: For PayPal Website Payments Pro, CVV will always be a required field.
Chargeback: The process initiated by a cardholder to dispute a credit card transaction through their issuing bank or credit card association. Merchants must provide proof of purchase or delivery. Merchants are advised to check with their merchant account provider for details concerning chargebacks.
Credit: A refund (full or partial) given to a buyer by a merchant. Credits are used most often to refund an order after the merchant has submitted and processed a batch. The credit button appears on the transaction panel of the order.
Note: For orders processed through PayPal Website Payments Pro, you can use the Refund Transaction button to refund a full or partial transaction. If refunding from the Manual Transactions page, you can use the Refund Sale button.
Credit Card Association: Visa, MasterCard International, American Express, Discover (Novus). Note: While Visa and MasterCard International are card associations, the payment processor works through them to the issuing bank to collect funds.
CVV: See Card Verification Value
D-E
Deposit: The amount credited to a merchant's bank account from the settled transactions in a batch minus any fees.
Discount Rate: The percentage of order totals merchant account providers charge merchants for settlement of transactions. The percentage is usually low (2-3%) but rates vary based on merchant account provider and the risk level associated with the transaction.
F
FDMS: See First Data Merchant Services
First Data Merchant Services (FDMS): Yahoo! Merchant Solutions uses FDMS as both the gateway and payment processor. Yahoo! Merchant Solutions is integrated to work only with FDMS Nashville Platform (formerly Envoy). All merchants must use merchant account provider that are compatible with FDMS Nashville Platform in order to process orders online. FDMS requests authorizations from issuing banks and credit card associations and passes the authorization response back to Yahoo! Merchant Solutions during checkout. FDMS also processes the batches with merchant transactions when submitted and facilitates the settlement whereby funds are transferred from the issuing bank/credit card association associated with the order to the merchant account provider where the merchant has an account.
G
Gateway: The system consisting of hardware and software which connects the merchant's shopping cart with the payment processor by translating the information from the shopping cart format into a format accepted by the payment processor to request an authorization or settlement from the issuing bank or credit card association. Yahoo! Store provides merchants a gateway to FDMS.
H
Hard goods: Material goods that are shipped to a buyer. Compare to Soft goods
I-L
Issuing Bank: Any Visa/MasterCard member bank which issues cards to cardholders. The issuing bank collects funds for purchases from the cardholder.
M-N
Merchant: A business that sells goods or services.
Merchant Account: A relationship between a merchant account provider and a merchant for the purpose of conducting online payment processing. A merchant account is not required to open for business with Yahoo! Store, however you will not be able to use Risk Tools for fraud screening without a merchant account. Merchants can sign up for or set up an existing PayPal Business account in lieu of a merchant account.
Learn more about PayPal Express Checkout
Merchant Account Number: The number assigned by the merchant account provider to the merchant's bank account (similar to the account number which appears imprinted along the bottom of checks). The merchant account number and merchant identification are two different numbers. This number is required to set up online processing through FDMS.
Merchant Account Provider: A merchant bank that facilitates authorizing and settling online credit card payments of buyers for merchants. Merchants can select PayPal Website Payments Pro, the Yahoo! Store preferred provider, Chase Paymentech, or sign up for or set up an existing merchant account as long as the merchant account provider is compatible with the FDMS Nashville platform.
Merchant Identification Number (MID): The unique number assigned by the merchant account provider to a merchant. FDMS uses this number to identify the merchant during authorization and settlement. Typically, the number is seven digits long not including any leading zeroes. This number is required to set up online processing through FDMS.
MID: See Merchant Identification Number
Monthly Service Fee: A fee charged to merchants by some merchant account providers, which can be used to lower the discount rate (similar to an annual fee).
O
Offline processing: Authorizing and settling orders with a swipe terminal, or credit card imprinter. Contrast with Online processing
Online processing: Authorizing and settling orders online through the use of an order system through a gateway to a payment processor and issuing bank or credit card association and a merchant account. Contrast with Offline processing
Order: The goods or services purchased by the buyer from the merchant.
P-Q
Payment Options: The choices buyers have for payment when placing on order on a merchant's site (for example Visa, MasterCard, Discover, PayPal). Merchants can add only those payment methods for which they are set up to receive through their merchant account provider. Adding unsupported payment methods on the Payment Center > Payment Options page of the Store Manager will result in errors. Merchant should contact their merchant account provider to resolve such errors.
Payment Processor: Responsible for contacting issuing banks or credit card associations on behalf of the merchant account provider to request authorization and settlement of credit card transactions.
Point of Sale (POS): The place where a sale occurs in a physical retail store. POS Sales are conducted most often through swipe terminals but also with credit card imprinters or phone approvals.
R
Reauthorize(PayPal transactions only): Use this button to reauthorize an order. Reauthorizing ensures that funds authorized for an order are still available for capture when the order is ready to be processed. It is not possible to reauthorize within the 3-day honor period of PayPal during which PayPal guarantees funds are available.
Refund Transaction(PayPal transactions only): Use this button to refund an order where you have captured funds.
Risk Tools: A feature that allow merchants to configure rules for marking transactions as approved or flagged based on AVS and CVV responses. Merchants can choose to enable or disable Risk Tools for their store. They can set an Order Minimum at which all orders will be processed according to AVS Rules and CVV Rules as set by the merchant.
S
Sale: Occurs when a merchant processes an order which is then stored in a batch for later processing and settlement. For Yahoo! Store merchants, a sale is processed by clicking the "Sale" button on the transaction panel.
Secure Server: All Yahoo! Store servers that handle credit cards use SSL (secure socket layer) encrypted communications. The information passed between the buyer and the merchant's site is encrypted so that data that may be intercepted is unreadable.
Settlement: A process in which a transaction is processed between a merchant account provider and the issuing bank or credit card association of the buyer. In the case of a sale, funds are transferred from the issuing bank/card association to the merchant's account. The details of each settlement can be reviewed by merchants by reviewing batches.
Setup Fee: This is a fee for processing the application paperwork and setting up a merchant account with some merchant account providers. Paymentech charges no setup fees.
Shopping Cart: The page or online basket in a merchant's site which displays the quantity and price of items selected for ordering by customers. Buyers enter the checkout process by clicking the "Check Out" button.
Soft goods: Goods which are downloaded from the merchant such as e-books or downloadable software. Compare to Hard goods
SSL: The industry standard encryption system that allows for secure transmission of data between buyers and merchant sites. SSL stands for secure socket layer.
Submission: The process whereby batches are sent to FDMS for settlement. This process happens anywhere between 6-11 pm (PST) by default (see automated daily batch submission). Merchant can elect to submit batches manually at any time.
Swipe Terminal: A terminal which reads the magnetic strip on a credit card and transmits the data for the purpose of conducting a sale.
T-U
Terminal Identification Number: The identification number of a specific terminal or workstation which is provided by the merchant account provider to the merchant. Typically, the number is seven digits long not including any leading zeroes. This number is required to set up online processing through FDMS.
TID: See Terminal Identification Number
Transaction: The action between buyer (cardholder) and merchant that affects the financial standing of the buyer and merchant. Transactions can include sales, credits, and voids. There is typically a fee associated with each transaction that is initiated by the merchant.
Transaction panel: The controls found in the Yahoo! Store Order Manager when viewing an order (individual or range). This panel appears at the bottom of the order page and only appears when the merchant has successfully set up their store for online payment processing. The panel displays the name of the payment processor, the amount of the sale, and links to submit and review batches (applicable only to FDMS compatible merchant accounts). The panel also contains buttons for processing the order. Merchants can only process an order by clicking the "Sale" or "Capture Funds" button (depending on which payment processor you have set up) which then stores the sale in the batch for later processing (for FDMS compatible merchant accounts) or settles the transaction immediately in the case of PayPal. After processing the sale, merchants will see another button—"Void Sale" (FDMS) or "Refund Transaction" (PayPal). For orders processed through Paymentech/FDMS, merchants can click the Void Sale button prior to the batch submitting (6-11 pm PST) to remove the sale from the batch. Merchant can click "Credit" to issue a credit to the cardholder for an order. For orders processed through PayPal, merchants can click Refund Transaction to issue a full or partial refund on the transaction.
Transaction Fee: The per-item cost associated with each transaction through a merchant account provider. For example, Paymentech charges a 20¢ transaction fee.
V-Z
Void: Removing a sale transaction from a batch prior to settlement. It is not possible to void a sale after the batch has been submitted. Merchants must issue a credit to offset a sale if the batch with the sale was submitted. It is possible to void a credit in the same way a sale is voided but again only before the batch with the credit is submitted for settlement.
Void Authorization: When a buyer places a credit card order, an authorization is placed on their credit card for the amount of the purchase. If you find that you need to cancel an order, use the Void Authorization button to remove the authorization on the buyer's credit card prior to canceling the order.
See Also