Glossary

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E-commerce is a general concept covering any business transaction executed electronically between parties such as companies (business-to-business), companies and consumers (business-to-consumer), consumers and consumers, business and the public sector, and between consumers and the public sector. Electronic commerce comprises electronic trading of goods and services and falls into two categories:

Indirect e-commerce: electronic ordering of tangible goods; the actual goods are delivered in a traditional form (ie: USPS, etc.)


Direct e-commerce: electronic ordering and delivery of intangible goods (electronic material ie: memberhsips, games, softwares, etc.)

Even though e-commerce predates the Web for some time, it is the Web technology and its general access towards open network standards that today are the driving forces of e-commerce and that have put it on the global agenda. Historically, before e-commerce existed on the Internet, it was used mainly for business-to-business transactions in different forms of closed networks.

For the consumer, it is easy to appreciate the importance of e-commerce. Why waste time fighting the very real crowds in supermarkets, when, from the comfort of home, one can shop on-line at any time in virtual Internet shopping malls, and have the goods delivered home directly.

For business, e-commerce offers enormous opportunities. It allows to trade at a low cost world-wide and it offers enterprises the chance to enter a global market right from start-up.

Acquirer or acquiring bank
The institution/organization where a merchant has an account to process transactions and credit payments.

ACH
ACH (Automated Clearing House) is an electronic funds transfer system between financial institutions.

Address Verification Service (AVS)
A system built into the authorization process that enables a merchant to verify a United States billing address of a customer to be the same billing address the Issuing bank currently has on file.

Average Ticket Size
The total dollar amount of a single transaction approved to be processed through a merchant account.

aggregator
This is a e-commerce business model in which the website sells products or services which it does not produce or warehouse. Rather, an Aggregator creates an environment where multiple providers (sellers) must compete on terms determined by the use.

AT&T Mondex
Unlike most e-cash systems, AT&T Mondex was developed not for the Internet but for the traditional, "offline" world, and is backed by MasterCard and AT&T. Customers get a smart card (a credit card sized device that contains a computer chip) which keeps track of how much money it contains. Smart cards use a reader much like traditional credit and ATM cards. When you swipe the smart card through the reader the value is directly transferred to the merchant's reader, almost as if you were taking the money from your wallet and handing it over. One disadvantage is the requirement for a reader.

authenticated
Established as being a genuine user or verifying the identity of a user.

authorization
The process where permission is granted by the card issuer (the financial institution) allowing the payment transaction to proceed. During this process the issuing bank checks that the card's available credit hasn't been exceeded.

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batch
A collection of captures and credits accumulated over a particular period (usually a day or less), which are waiting to be settled with the merchant's acquiring financial institution. "Batch close" is the process of sending the batch to the financial institution for settlement. "Batching" or organizing many files into a single group for transmitting tends to increase the efficiency of the data transmission.

Business Cash Advance
A Business Cash Advance provides small business owners with the ability to raise needed capital. We advance Cash by purchasing a pre-determined amount of the business's sales volume sold through your credit cards merchant account.

browser
The software or "interface" through which users view the Web. A Web browser retrieves, displays and prints webpages and their contents.

business-to-business communications
The marketing of products from one business to another. These products are needed to make other goods and/or provide services.

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cache
An area of your computer memory or directory on your hard disk. This is the place where your browser stores webpages you have already viewed. Then when you return to a page, the browser can grab this page from the cache, which is far quicker than downloading its elements from the Web again. This can save a lot of time, but remember that if you return to a page that changes a lot, you might need to click the "Reload" button on your browser to get the latest version instead of the cached one.

Card Association
MasterCard International, Visa U.S.A., Visa International and any other association and/or network assigned to the Merchant Bankcard Services Agreement.

Cardholder Information Security Program (CISP)

Card Verification Value - Visa (CVV 2) Card Validation Code - MasterCard (CVC 2)
A three-digit value printed in the signature panel on the back of a MasterCard or Visa card. This value is a security feature designed to crosscheck the information embossed on the card.

Cash Reserve Amount Percentage
The percentage of settled transactions set aside in the merchant Reserve Account.

Chargeback
A chargeback is the return of funds to the consumer. The transaction is charged back by the cardholder's bank. This occurs at the request of the cardholder or their bank. Chargebacks can occur if:

• the cardholder disputes a transaction.
• the authorization process was not followed properly.
• the authorized owner of the account number used claims that he/she did not engage in or authorize the transaction.
• the cardholder claims that the merchandise or services for which they are being charged have not been received.
• the cardholder claims that the merchandise or services received were not as initially described or were received in defective condition.
• the cardholder claims that the transaction was cancelled and/or the merchandise was returned.
• a valid authorization number was not obtained for the transaction in question.

Chargeback Ratio
The amount of sale transactions divided by the amount of chargebacks received in any given month. This is calculated using either the item count of both or the dollar amount of both.

capture
The procedure for a previously authorized transaction once the merchant has shipped goods or services to the customer. The transaction triggers the movement of funds from the issuer to the acquirer and then to the merchant's account.

catalog
An online store usually needs to display individual products. So a catalog refers to how the products are classified and displayed online, often in searchable databases - and sometimes echoing the traditional printed catalogs for the same products.

certificate
A document designed to address security issues such as authentication and non-repudiation when executing e-commerce transactions. The certificate contains information about the issuer, the certificate's owners, a public key, the period for which the certificate is valid, and the host to whom the certificate was issued. The token is designed in such a way that none of its details can be changed without invalidating the digital signature.

cookies
Cookies are text files that are stored at the client's hard drive. When a browser requests a document, the web server creates a fragment of data, which is sent to the browser and stored at the client's computer. Afterward, when the browser solicits another document, the cookie is sent with the request. Cookies are very similar to the caller id boxes that have become so popular in that they provide telemarketers with such relevant information as: the consumers name, address, and previous purchase payment record.

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Demand Deposit Account (DDA)
A checking account, which must be linked to a merchant processing account to deposit funds to and debit funds from as needed.

Digital Certificate
An authentication that confirms a website is registered to the correct individual(s) through a thorough validation process.

Discount Rate
The percentage of the total transaction amount, debit and credit, that is deducted from the amount deposited to the merchant account.

database
A sort of electronic filing system - a collection of information organized in such a way that a computer program can quickly select desired pieces of data.

data warehousing
Systems for storing, managing and retrieving large amounts of data, such as recent snapshots of corporate data. Data warehousing software often includes advanced compression, filtering and "hashing" techniques for fast searches.

decryption
The process of making a secure, encrypted file readable as plain text.

digital receipt infrastructure (DRI)
This enables customers and organisations to prove that electronic transactions and events actually took place, by providing a "digital trail", a sort of online equivalent of a paper trail.

digital signature
Digital signatures, like written signatures, are a method of authenticating the source of a document and/or its author. A common form of digital signatures are digital certificates, whereby the issuing company vouches for you and gives you a unique identification that can be verified by a merchant prior to accepting an order.


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Electronic Commerce Transaction
A transaction conducted over the Internet or other network where a cardholder enters card data and transmits the data. This includes email, electronic order forms, and interactive websites.

ETC Type
Electronic Ticket Capture code that identifies the method that a merchant settles transactions.

Electronic Data Interchange (EDI)
The automated, electronic flow of business information between organizations without human intervention. This information is integrated with and flows into and out of the organizations' respective business management systems.

EDI management software
Software that translates business data between internal formats and standard formats (such as ANSI X12 and UN/EDIFACT).

Electronic Funds Transfer (EFT)
Systems and technologies that processes financial transactions and transfers funds (money) electronically between two financial institutions. Includes Fedwire, Bankwire, automated clearinghouses (ACHs), and other automated systems.

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Federal Trade Commission (FTC)
Federal agency empowered to prevent persons or corporations from using unfair methods of competition in commerce. They are now involved with monitoring commerce on the Internet, especially with regard to its growth, content, and potential for fraudulent activity.

file transfer protocol (FTP)
This allows you to transfer files between computers via the Internet. For example, after you have been using your own PC to work on files for your website, you would use FTP to move the finished files from your (local) machine to the (remote) web server.

Frequently Asked Questions (FAQ)
Documents that list and give answers to the most common questions on a particular subject (this could be anything from a particular software product to an email mailing list, a company, etc). A very handy and much-used format for giving information to website visitors.

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gigabyte
A gigabyte (or 1 Gb) is equivalent to about a billion bytes of data.
1 Kb = 1,024 bytes

1 Mb = 1,024 Kb (= 1,048,576 bytes)
1 Gb = 1,024 Mb (= 1,073,741,824 bytes)

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HTML
Hypertext Markup Language (HTML) is used to create documents for the World Wide Web. These documents are referred to as hypertext documents. They are marked with special tags that give commands that direct the size, shape, colouring, and placement of text, graphics and sound on the web page, as well as integrating the static page with dynamic content such as Java applets.

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Inquiry Fee
A fee imposed for all card types (MasterCard, Visa, American Express, Diners Club, JCB, etc.) each time an authorization is requested and/or a batch is closed.

Issuing Bank The financial institution that issues a card to a consumer.

ISO (Independent Sales Organization) An ISO (also known as Merchant Service Provider (MSP)) is a third-party organization that offers financial transaction processing services through partnerships with acquiring banks to find, open, and manage merchant accounts on behalf of such businesses.

Internet service provider
Or access provider. A company which provides its customers with access to the Internet. The user normally connects to the access provider's computer via a modem, using a "dial-up connection".

IP (Internet Protocol) address
A unique number which is used to represent every single computer in a network. All the computers on the Internet have a unique IP address. To the Internet, a given server's IP address is given in terms of numbers and dots, in the format, 000.000.000.0. IP numeric addresses also have a more easy-to-use textual representation (e.g. www.ecx.com or www.qc123.com).

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Kbps
Kilobits per second, a measure of data throughput - very important when you are considering how fast one of your webpages will download on a medium to fast modem. For example, a 28.8 Kbps modem will transfer data at about 3.6K (or kilobytes) per second.

kiosk
A small standalone stall and PC (or PCs) set up in a public place for disseminating information (e.g. tourist info). The data may be stored locally (e.g. on a CD-Rom) or accessed via the Web.

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Monthly Bankcard Volume
The total dollar amount of MasterCard and Visa transactions approved to be processed through a merchant account in any given month.

megabit

A data measurement, approximately one million bits - but thanks to binary arithmetic (the mathematics that computers understand) it is really worth exactly 1,048,576 bits.

megabyte
A common measurement of digital storage capacity. Your web team will need to keep an eye on the megabytes, in terms of the sizes of your webpage graphics and other files, the storage space of the server (the computer which holds your website), and the speed of the Internet connection between your customer and your site. One megabyte (or 1 MB) is equal to approximately 1 million bytes (1,048,576 bytes). A typical floppy disk holds about 1.44 MB of data, while a CD-ROM can hold over 600 MB of data.
The basic unit of measurement is a bit. If you are offering visitors to your site a 1 MB file to download, for a customer using a modem with a speed of 28,880 bps (or bits per second) this can take about 10 minutes to download.

merchants
Online retailers.

meta tags
meta tags are another html tag which give "behind the scenes" information. The most common use of the meta tag is to define keywords for search engines by which the author of the webpage suggests their website to be indexed. Another meta tag allows for the webpage author to offer a description of the webpage for the search engines to use.

micro payments
Micropayments consist of digital coins, currency, and coupons that assist merchants and consumers in their attempt to conduct secure transactions on the web. Digital payments contain encrypted information about the customer that allows the corporation to track that customer's spending patterns, as well as provide a safe platform for business transactions.

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online shopping
Browsing and buying on the Internet from the comfort of your home.

OS
The OS (operating system) is the overall software for running your personal computer or server (e.g. Windows, DOS, UNIX).

online shopping mall
Online stores that are grouped together much like a physical "mall" or shopping center, where a person can go to many stores and browse for different types of products in the same website.

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PCI Compliance
Payment Card Industry (PCI) compliance applies to anyone and any business that collects, transmits or stores cardholder data. iPayment is dedicated to maintaining the highest standards of security.

Payment Gateway The transaction processing vehicle that receives encrypted transactions from the merchant server, authenticates the merchant, decrypts the payment information, and transmits the data to the authorization and settlement networks.

password
A secret word or phrase used to identify oneself when permitted to enter a place or have access to gain information.

proxy
A form of security on the Internet. When you use a proxy or "proxy server", your computer sends a request to a server on the Internet via this proxy. For the server it looks as though the request is coming from the proxy, not from your machine.

point of sale
In the physical world, the specific point at which a product is paid for and delivered. Online, this often refers to the software that enables the merchant to accept online transactions and conduct follow-on transactions with their financial institution.

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Reserve Account
Merchant funds maintained at iPayment to be utilized for any potential losses generated from a merchant account, such as unpaid chargebacks or other unpaid fees.

Retrieval Request
A retrieval request is a request from the cardholder's bank to supply a copy of the sales draft. If the transaction was a non-face-to-face transaction, a substitute sales draft may be provided. The following information must be included on all sales draft and substitute sales drafts:

• Cardholder Account Number
• Card Expiration Date
• Merchant Name
• Merchant Location (city and state)
• Transaction Date
• Transaction Amount
• Description of Merchandise or Services
• Authorization Code
• Cardholder Signature (if applicable)

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Secure Electronic Transaction (SET)
An industry standard that authenticates customers and merchants to ensure the safety and confidentiality of data processed over the Internet.

search engine
Any of several databases available on the Internet that allow users to find websites based on words included on those pages. Some, such as Alta Vista and Infoseek, are huge indexes. While a large size obviously allows the user to find a larger number of sites, the downside is that sometimes one may find it difficult to narrow their search to a manageable number of site selections (say down to several hundred rather than several thousand choices).

Secure Electronic Transaction (SET) protocol
Proposed by MasterCard and Visa, SET is another standardized protocol for processing electronic transactions.

Secure Sockets Layer (SSL)
SSL was designed by Netscape for use in electronic commerce for transactions involving confidential information such as credit card numbers. Secure Socket Layer uses a system of public and private key authentication combined with other schemes to verify electronic signatures. The ability to conduct secure and confidential transactions over the Internet is critical to the success of electronic commerce.

Security and Exchange Commission (SEC)
The SEC is an independent, nonpartisan, quasijudicial regulatory agency with responsibility of administering the federal securities laws. The purpose of these laws is to protect investors in securities markets that operate fairly and to ensure that investors have access to disclosure of all material information concerning publicly traded securities. The Commission also regulates firms engaged in the purchase or sale of securities, people who provide investment advice, and investment companies.

shopping cart
The way most online companies keep record of what you have picked while browsing in their online store. Just as in a physical store you can put in and take items out of your shopping cart before you actually buy it.

signature
A block of information used to sign the end of an e-mail or discussion group message. It usually includes an author name, company name, e-mail address, and other information. Most Unix mail and news software will automatically append a signature from a file in the user's home directory to outgoing mail and news. The composition of one's signature can be quite an art form, including an ASCII logo or one's choice of witty sayings.

storefront design
The way a website is designed to be shown to the public.

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Terminal
A hardware device equipped with a magnetic strip reading device utilized for processing of card transactions, typically used in a retail (face-to-face) environment.

Transit Routing Number / ABA #
A nine-digit identification number assigned to a financial institution necessary to authenticate automated clearinghouse (ACH) transmissions regarding a merchant account.

traffic
Generally refers to the number of visitors a site receives. Since that's a number that can be tracked in many different ways, site marketers usually choose to put their best stat forward (pageviews, visitors, impressions or hits).

trademark
The exclusive right to use a brand or part of a brand. Others are prohibited from using the brand without permission.

transaction
The actual process of buying an item or store.

transaction layer security
Microsoft and Netscape jointly developed this converged protocol, a revision of SSL which offers increased security mechanisms within the protocol.

transaction fee
A charge for each credit card transaction, collected by the merchant account provider or ISO. Transaction fees usually fall between $0.20 and $1 (U.S.).

transfer of risk
Vendors accept a certain discount on the amount owed in return for transferring the payment risk to the credit card issuer. This same concept applies throughout the entire system of commerce, electronic or otherwise.

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Uniform Rules of Conduct for the Interchange of TradeData by Teletransmission (UNCID)
A set of standard rules of conduct for the exchange of trade messages using EDI or other electronic means. UNCID was developed by the International Chamber of Commerce in Paris.

URL
Uniform Resource Locator - often a Web address. A URL is the location and access method of a resource on the Internet. It identifies a particular Internet resource - for example a webpage, a library catalogue, an image, or a text file. The URL or address of a webpage is really quite simple and orderly when you get used to it. It has three main parts (in this order): the http bit; the location on the Internet of the machine which holds the resource; where in the machine to find it.


user ID
A unique combination of numbers and letters used to identify a user by a server.

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vendors
Companies or people that sell products or services.

virtual store
Commercial websites that allow people to browse the products like a person would browse the aisles in a physical store.

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web master
The person or team who is responsible for looking after a particular website.


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