How Our Industry Works

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Terminal/Payment

Getaway

The physical or virtual device used by the merchant to communicate payment information to the ISO or Acquiring bank's network. Payment gateways interface with a merchant’s billing system and pass that data to a Front-End Authorization Network.

Credit Card Association

The consumer payment system, such as VISA and MasterCard, whose member banks are the financial institutions that issue payment cards and/or enroll merchants to accept payment cards. The credit card associations set the rules that govern the industry and the fees, called the Interchange, associated with processing electronic payment transactions.

Front-End Merchant

Processing Network

The platform that the credit card terminal / gateway communicates with when approving a transaction after a card is presented at the point-of-sale for payment. The front-end is responsible for the authorization and capture portion of a credit card transaction. Additional front-end platform interconnections may be required to support ACH (Automated Clearing House) and debit transactions.

ISO/MSP (Calpian)

Entity that solicits merchants on behalf of an Acquiring Bank for payment card acceptance and enables card payments from customers. ISOs may hold responsibility for providing customer service, merchant-level support, merchant-level compliance with Card Association rules and underwriting of merchant accounts.

Back-End Merchant

Processing Network

The platform that takes captured transactions from the Front-End Network and settles them through the Interchange system. The back-end generates daily ACH (Automated Clearing House) files that perform merchant settlement. Other functions typically handled on the back-end include chargeback handling, retrieval requests and monthly statements.

Merchants’

Acquiring Bank

The Acquiring Bank holds the contract for providing payment processing services to the merchant. ISOs and MSPs sell processing services to merchants on behalf of Acquiring Banks. The merchant account is a contract under which the Acquiring Bank extends a line of credit to a merchant who wishes to accept credit card transactions. Acquiring Banks typically hold all the risk on transactions as well as on the operation of every registered ISO and their sub-agents and are ultimately responsible for Association fines that apply when rules are broken by an ISO or merchant.

Merchant/Retailer

An authorized acceptor of payment cards for the payment of goods and services.

Cardholder

An authorized payment card user.