Credit Card Processing

 In Credit Card Processing

Credit Card Processing 101 – Top Terms

Processing payments is a key component to your business management software. As a software provider you do not need to know the ins and outs of every payment acronym but understanding some key terms is important as it will help you as you go through the payment integration process.


An acquirer is a bank that provides and processes credit card merchant accounts. Sometimes also called a clearing bank, this bank works with major credit card companies and your own bank. After a credit card charge is processed, the acquirer deposits the amount in an account.

Average Ticket

When you set up your merchant account, the company will want to know the average amount of your credit card transactions over the course of a month. This is your average ticket. If your business already processes credit cards, you can get the amount for your average ticket by adding up your monthly intake from card transactions and dividing it by the number of these sales.


Any transaction that does not involve scanning a physical credit card needs an Address Verification Service. During the transaction, the cardholder enters the address and ZIP code along with credit card information. The issuing bank uses AVS to check each field to see if it matches the cardholder’s information on file. This is an important tool for preventing fraud in online transactions.


A credit happens when an authorized transaction is reversed before it is settled.

MID:  Merchant Identification Number

A number generated by a processor/acquirer that is specific to each individual merchant location. Used to identify the merchant during processing of daily transactions, rejects, adjustments, chargebacks, end-of-month processing fees, etc.


The merchant is the business that accepts the credit card transactions and uses the services of a processor to be able to do so.


Settlement is when the transaction batch goes to the processor. It is complete when the funds arrive in the merchant’s account.


Terminal Identification Number. A unique number assigned to each POS terminal.

Want to see more key terms?  Check out our glossary!

Ready to see our API or open a test account?  Looking for more information on our Partner Programs?  Are you a merchant with a question?  We are here to help!

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