When applying for a merchant account for the first time, you will encounter terms that you may not have heard before. On this post, let’s take a look at some of the most common terms related to merchant accounts and credit card processing:
CVV2 . CVV2 stands for Card Verification Value. This is the three-digit number printed at the back of the credit card (MasterCard, Visa, Diners Club, Discover, and JCB).
For American Express cards, this is the last four-digit number in front of the card.
Merchants ask buyers to provide the CVV2 for security purposes especially for transactions wherein the actual credit card is not present (online, phone, email).
MOTO. MOTO stands for Mail Order/Telephone Order. This term pertains to the type of processing used for credit card payments. Sellers who want to accept credit card payments from customers who order through email, mail or over the phone must open a MOTO merchant account.
Generally, the processing fees for MOTO transactions are a little higher since a greater risk is involved when the actual card is not presented during the transaction.
Merchant Account. This is the type of account a business owner must acquire to accept credit card payments. A merchant account can acquired from banks, credit card companies, and independent sales organizations (ISO).
Credit Card Terminal. This is the equipment used for retail transactions where the credit card is present. The card is swiped into the terminal to access credit card information.
Payment Gateway. The payment gateway is where the transmission of credit card information happens. When the card is swiped (for retail transactions) or when the credit card details are entered into a virtual terminal (for MOTO transactions), the Payment Gateway passes on the information to the processing company for authentication. Once verified, the response from the processing company will be sent back through the payment gateway system.
SSL (Secure Socket Layer). This pertains to the method of encryption method used to protect credit card information. By encrypting or hiding the details, identity thieves will not be able to read the information while it is being transmitted through the payment gateway system.
Virtual Terminal. This is the online page where the merchant manually enters credit card information for MOTO transactions.
Virtual Shopping Cart. This is a software used for online stores. The shopping cart is where the buyer “places in” all items to be purchased before heading to the checkout page.
Third-party Credit Card Processor. A business owner may also accept credit card payments without opening a merchant account. This is done by acquiring the service of a third-party credit card processing company. The most popular names are PayPal and Google Checkout but there are also others.
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About the Author:
Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.