The Five Terms That You Need to Know About Payment Processing

When you click “buy now” on that website or mobile app or dip your card at the point-of-sale you’ve just entered the world of merchant services. These services enable merchants to accept electronic payments such as credit or debit cards from consumers. To fully understand the scope of merchant services and electronic payments handling, the following payment processor terms are important to know:

Payment Processor

A payment processor is responsible for authorizing transactions and ensuring funds are transferred to the merchants. Think of them as the liaison between the merchant and the banks that issue the cards. Some payment processors also offer card processing equipment, as well as other related services for PCI compliance, security and customer support.

Acquirer

The acquiring bank holds the merchant accounts that accept credit card payments. Acquirers will also process refunds and chargebacks when necessary.

EMV

EMV, whose name is taken from the card companies Europay, MasterCard, and Visa, who created it, is a credit card chip standard. It transfers liability to merchants for ensuring that card-present payments are not fraudulent. If an EMV chip credit card is processed without an EMV-enabled device, the merchant can be held responsible for fraudulent transactions.

Issuer

The issuing bank or issuer is the financial institution that issues the credit or debit card. They are responsible for collecting payments from the cardholder and submitting payment to the acquirer.

PCI Compliance

PCI Compliance refers to industry-mandated security standards that apply to all businesses that handle, process or store credit or debit cards. Everyone associated with payment processing must conform to PCI standards by having the appropriate controls in place to detect and deter fraudulent transactions. PCI standards are updated periodically to adapt to technological advances and cyberthreats, such as PCI DSS 4.0 expected by the end of 2020.

Payment processing requires staying up on the latest advances in security, technology and the ever-increasing ways that criminals find to perpetrate fraud and theft. Paragon Payment Solutions is the strategic partner you need to help ensure uninterrupted, secure payment processing for your customers. Contact us today to learn more!