Glossary of Terms

The following definitions should help you further understand the terms used in the merchant services industry.

Term	Description
ACH	Automated Clearing House is a payment network for inter-bank clearing and settlement. The ACH system is governed by the National Automated Clearing House Association (NACHA).
ACH Credit	An ACH transaction in which an agency's customer initiates the transfer of funds through their financial institution. The customer provides their financial institution with the amount to be transferred and the agency’s depository bank account information. The customer’s financial institution then initiates an electronic transaction through the ACH network which debits the customer’s bank account and credits the agency’s bank account.
ACH Debit	An ACH transaction in which an agency's customer provides their bank account information and the amount owed to the agency to which they owe money. The agency then instructs its financial services provider to initiate an electronic transaction through the ACH network which debits the customer’s bank account and credits the agency's account.
ACH Network	A nationwide electronic funds transfer system governed by the ACH Operating Rules and Guidelines, which processes electronically originated credit and debit transfers for participating financial institutions.
ACH Transaction	Automated Clearing House transactions include both ACH Credit and ACH Debit which utilize the ACH network for the electronic payments of funds.
Address Verification	A service associated with credit card authorization which verifies the cardholder's address. Primarily used for non-face-to-face transactions.
Association Rules	The rules, regulations, releases, interpretations and other requirements imposed or adopted by the Visa or MasterCard associations.
Authorization	The process which verifies that a cardholder account is valid, that they are not above any credit limit, and which reserves the credit amount on the account.
Authorization Approval Code	A number provided to the agency by their financial services provider confirming the authorization for a credit or debit card transaction.
Authorization Request	An electronic message sent from the agency to their financial services provider to request an authorization code for a credit or debit card transaction. This message is forwarded by the financial services provider to the appropriate card issuing entity.