Glossary of Payment Terms From I - O
IRD - Image Replacement Document. Also known as a substitute check, an IRD is an electronic image of the original paper check that conforms to the requirements set forth by the Check Clearing for the 21st Century Act (Check 21). Because of Check 21, IRDs act as the legal equivalent of the original paper check and enable financial institutions to settle check transactions.
ISO - Independent Sales Organization. An ISO can be a one-person operation or a large organization that sells merchant services on behalf of a single acquirer or several processors and acquiring banks. In addition to bankcard services, ISOs may sell payment equipment, check processing services, gift and loyalty cards and software.
Malware - Malware, from "malicious software," is intended specifically to damge or disrupt computers, computer systems, computer networks or mobile devices. Malware includes viruses, worms or spyware and may steal personal information in order to commit fraud.
MCA - Merchant Cash Advance. A merchant cash advance is an agreement between a company and a merchant to have a percentage of the sales be directed to the company in exchange for a lump sum payment. Merchant Cash Advances are used by merchants who may have trouble obtaining a bank loan thus the percentage of the MCA will be higher than the interest rate on a conventional loan.
M-commerce - M-commerce is mobile e-commerce and refers to online purchases transacted using a hand-held computer, smart phone or tablet.
Merchant acquirer - Also referred to as an acquiring bank, merchant bank or sponsor bank, an acquirer is federally insured financial institution responsible for connecting merchants to the credit card authorization and settlement systems.
MICR - Magnetic Ink Character Recognition. MICR is a character recognition technology used primarily by the banking industry to facilitate the processing of checks and makes up the routing number and account number at the bottom of a check. The technology allows computers to read information (such as account numbers) off printed documents. MICR also allows banks to easily process large numbers of checks.
Micropayment - an ecommerce transaction involving a very small sum of money.
MLS - Merchant Level Salesperson. A person who sells bankcard services and check processing to merchants on behalf of ISOs, acquirers, and processors. Also known as independent sales agents (ISAs), as well as agents, most MLSs are independent contractors. Others are paid employees of ISOs, acquirers and processors.
MNO - Mobile Network Operator, a wireless service provider. AT&T and Verizon Wireless are example of MNOs.
MOTO - Mail Order/Telephone Order. MOTO accounts, also known as card-not-present (CNP) accounts, may have higher rates than POS accounts with the consumer present. Because the signature is not required with MOTO accounts, these accounts are generally higher risk.
NACHA - National Automated Clearing House Association. NACHA manages the development, administration, and governance of the ACH Network. As a not-for-profit association, NACHA represents more than 10,000 financial institutions via 17 regional payments associations and direct membership.
NFC - Near Field Communications. NFC is a short range wireless technology that is often used in mobile and electronic payment transactions.
NRF - National Retail Federation. The world's largest retail trade federation. Its members include department stores, specialty, discount, catalog, Internet, and independent retailers, chain restaurants and grocery stores. NRF is also an umbrella group that represents more than 100 associations of state, national and international retailers.
Overdraft - a check or draft that is in excess of the account balance.