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How to be a Payment Services Pro? Learn your ABCs

Posted by Kevin Walli | Thu, Aug 16, 2012 @ 10:00 AM

alphabet soupDon't know your RDC from your PCI? Don't fret. Acronyms and abbreviations are SOP in the payments industry. For retail merchants, check guarantee service providers, independent sales agents and financial association members it can be downright confusing to keep track of terminology that relates to our payment systems. To make it easy to understand some of the most commonly used acronyms, we've set up a payments glossary of pertinent terminology on our website. Here are few entries that will help you sound like an expert MLS at the next ETA conference.

ACH - Automated Clearing House. An electronic payment network used most often with direct deposit of payroll checks and recurring payments. The Automated Clearing House can also be used to clear electronic checks as well as Demand Deposit Account (DDA) transactions.

BOC - Back Office Conversion. Check conversion transactions that occur in the merchant's back office instead of in front of the consumer. Notice to the consumer that BOC will occur must be posted at the point of sale or other check receiving locations.

CPP - Certified Payment Professional. The Certified Payments Professional (CPP) program
sets the standard for professional performance in the payments industry and is a symbol of excellence. It signifies that an individual has demonstrated the knowledge and skills required to perform competently in today's complex electronic payments environment.

DDA - Demand Deposit Account. A Demand Deposit Account refers to a checking, savings or money market account where the customer has easy access to the funds in the account.

ECC - Electronic Check Conversion. Also known as ECP for Electronic Check Processing. ECC converts paper checks into an electronic payment for deposit. This can be used directly at the point of sale (POS) at a merchant's cash register or by a business that receives mailed-in checks. Electronic check conversion is a fast and easy way to batch checks and process payments.

EMV - Europay Mastercard Visa. An almost global standard for chip and PIN cards (also known as smart cards) developed and backed by four of the major card brands. Europay Mastercard Visa has not yet achieved acceptance in theUnited States.

ETA - Electronic Transaction Association. The ETA is a trade organization representing Independent Sales Organizations (ISO) and merchant service providers involved in electronic transaction processing products and services.

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 without the physical check.

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.   

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.

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.

PCI - Payment Card Industry. (Usually in reference to compliance standards.) PCI standards are designed to enhance payment account data security worldwide and consists of 12 requirements governing security management, policies, procedures, network architecture, software design and other areas critical to the protection of cardholder data. Members of the payment card industry (financial institutions, credit card companies and merchants) must comply with these standards and failure to do so may result in fines or restriction from processing credit cards.

POP - Point of Purchase. Points of purchase may be in the front of a store where consumers gather to complete their purchases or virtual POP such as an electronic retailer that sells products and services over the internet. Because consumers tend to make purchasing decisions on very high-margin products or services at these strategic locations, the point of purchase for products and services has become an important focus for marketers.

RDC - Remote Deposit Capture. RDC is an electronic check processing service that uses a digital image of a paper check for clearing and settlement. Remote deposit capture can be used to process checks with a desktop PC and a check imager. This is very useful to deposit checks at the merchant's location instead of going to the bank to deposit checks.

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Topics: Independent Sales Organization (ISO)

Written by Kevin Walli

Kevin Walli is an award-winning graphic designer with 18-plus years of experience in graphic design, web design and photography. Flexible and creative with an excellent sense of humor, Kevin enjoys spending time with his family, photography, reading, music and sports.