Payonomy | Glossary of Terms

Acquirer

A bank having a business relationship with merchants, retailers and other service providers to process their plastic card transactions. Acquirers obtain financial settlement from the card issuers, typically via the card schemes which maintain the clearing systems, and pay the proceeds to the merchant, charging a fee.

ADDACS

Automated Direct Debit Amendment and Cancellation Service. The automated system used by Banks and Building Societies to advise the Originator of amendments / cancellations of a DDI, either electronically or in paper form. The AUDDIS scheme also uses this message passing capability for communicating details of returned AUDDIS DDIs to Originators from the Paying Banks.

Affinity card

A payment card issued on the basis that the card issuer makes a donation to a particular organisation (often a charity).

APACS

The Association for Payment Clearing Services.
The umbrella body for the UK payments industry. Three autonomous clearing companies operate under the umbrella of APACS - BACS, CHAPS Clearing Company and the Cheque and Credit Clearing Company.

ARUDD

The Automated Return of Unpaid Direct Debits service.
The automated system used by the Banks to return unpaid Direct Debit payments. Unpaid Direct Debits are advised to the Originator by BACS using the Automated Return of Unpaid Direct Debit report (ARUDD).

AUDDIS

The Automated Direct Debit Instruction Service. This automates the setting up of Direct Debit Instructions between Originators and the Paying Banks. This is done by sending a file of new instructions via BACSTEL IP using special transaction codes to tell the paying bank that this is a new Direct Debit being set up.

BACS

Owned by the leading banks and building societies in the UK and Europe is responsible for the clearing and settlement of automated payments in UK and for maintaining the integrity of payment related services.

BACSTEL-iP

A completely new way of accessing the BACS payment services. Based on Internet Protocols, it uses the latest PKI (Public Key Infrastructure) technologies to ensure high level of security. By accessing BACS payment services via BACSTEL-IP, organizations are now able to monitor payment status, receive a wider range of reports and maintain them - all online.

BACS Processing Cycle

The BACS cycle comprises 3 bank working days - Input Day, Processing Day and Entry Day. Files are transmitted on Input Day to BACS and can be sent up to 31 days before processing day. The Entry Day, the day the account is debited or credited is always one working day after Processing Day.

Business card

A payment card issued typically to smaller businesses for staff to undertake general business-related spending (See also corporate card).

Card issuer

A bank or building society issuing payment cards, ATM cards or cheque guarantee cards to its customers. For payment and ATM cards, the card issuer undertakes responsibility to settle transactions made with the card (except in some cases where fraud is present).

Card-not-present (CNP)

A transaction where the merchant, retailer or other service provider does not have physical access to the payment card, examples are transactions by telephone, mail order or Internet. Also see MOTO.

Card-remotely-present

A transaction where the merchant, retailer or other service provider does not have physical access to the payment card, but where the card is inserted in a device by the customer and the card details are verified by an electronic process. Examples are transactions at unattended payment terminals, by telephones equipped with card readers, or via the Internet when a card reader is in use.

Card scheme(s)

Card schemes set the business rules that govern the issue of the payment cards that carry their logo. Typically, these rules apply throughout the world to ensure interoperability of cards. In many countries, domestic schemes also operate. The schemes operate the clearing and settlement of payment card transactions. In the UK, banks and building societies must be members of the appropriate scheme to issue cards and acquire card transactions. Examples of international card schemes in the UK are Visa, MasterCard, American Express and Diners Club.

Charge card

A payment card, enabling holders to make purchases and to draw cash up to a pre-arranged ceiling, the terms of which include the obligation to settle the account in full at the end of a specified period. Cardholders are normally charged an annual fee.

Chip card

Also known as integrated circuit card (ICC) or smart card. A chip card holds details on a secure computer chip that can store and process information; chip cards usually also have a magnetic stripe.

Chip and PIN card

A payment card containing a chip that requires the use of a PIN as the preferred method of cardholder verification at the point-of-sale (not only at ATMs).

Cirrus

A MasterCard brand signifying global ATM acceptance

Co-branded card

A payment card issued by a bank or building society in partnership with another, often non-financial, institution (usually one which has a well-known brand name), bearing the brand/logo of both. The non-financial institution offers certain benefits to cardholders, often using a points system.

Commercial card

A generic term covering business, corporate and purchasing cards.
convenience ATM
Refers to the location of ATMs in so-called convenience stores, comprising newsagents, corner shops, off licences and open-all-hours general stores.

Corporate card

A payment card typically issued to larger companies for staff to make business-related transactions, for example travel and entertainment (see also business card).

Credit card

A payment card enabling the holder to make purchases and to draw cash up to a pre-arranged ceiling. The credit granted can be settled in full by the end of a specified period or can be settled in part, in which case interest is normally charged. In the case of cash withdrawals, interest is normally charged from the transaction date. Cardholders may be charged an annual fee.

Debit card

A payment card linked to a bank or a building society account, used to pay for goods and services by debiting the holder's account; usually also combined with other facilities such as ATM and cheque guarantee functions.

Direct Debit

An agreed amount collected from a customer's Bank / Building Society account by an Originator on request. The amounts and dates may vary from payment to payment, subject to advance notice being given.

Direct Credit / BACS Payments

Direct Credit is the means by which an organisation can transfer funds electronically, directly into a specified Bank or Building Society to make payments to accounts of individuals or companies.

Direct Debit Guarantee

The guarantee offered by the Paying Banks to payers in respect of the Direct Debit Scheme specifying their rights/safeguards.

DDI - The Direct Debit Instruction

This is the authority signed by the customer allowing the Originator to collect Direct Debit payments from the customer's account. In this specification the term DDI is used to refer to both the paper Direct Debit Instruction and the electronic messages used to set up and cancel a Direct Debit Instruction at the Paying Bank.

Electron

A Visa debit card. All Electron purchases are subject to electronic authorisation.

Floor limit

A limit on the value of each transaction, agreed between the merchant and acquiring bank, above which authorisation must be obtained by the merchant, from the card issuer.

Fully-authorised debit card

A debit card where every purchase is subject to electronic authorisation (see Electron and Solo).

Industry Hot Card File (IHCF)

A computerised list of reported lost and stolen cards available to merchants to assist in the identification and prevention of fraudulent transactions.

ISCD - Industry Sort Code Directory

This is a register of valid BACS sort codes maintained by the Paying Banks. This information may be held by Originators to check a Payer's Bank branch sort code. It is now known as the Industry Sorting Code Directory - ISCD for short. APT offers banking data validation software.

Maestro

A MasterCard debit card scheme enabling cardholders to make payments to participating merchants in the scheme.

Mail Order / Telephone Order (MOTO)

A transaction where the merchant, retailer or other service provider does not have physical access to the payment card, examples are transactions by telephone, mail order or Internet. Also see CNP.

MasterCard

An international card scheme

Modulus Checking

A method used by financial institutions to allocate and verify account numbers using a mathematical calculation in conjunction with a sorting code. Its aim is to spot any data input errors.

Multifunction card

A payment card fulfilling two or more roles, typically a debit card also providing ATM and/or cheque guarantee functions.

OIN - Originator's Identification Number

This is the unique number given to participants who are authorised to use the Direct Debit Scheme. An OIN is synonymous with a BACS User Number.
This is also referred to as Service User Number (SUN)

Originator

This is the organisation 'originating' requests for collection by Direct Debit payments.

Paperless Direct Debit (PDD)

Paperless Direct Debit allows Originators to sign-up customers to Direct Debit, or varies their existing instructions, without sending out paper DDIs to customers for signature. Instructions can be taken over the telephone, Internet or face-to-face.

Payer

The person who, by signing a DDI, has given authority for his account to be debited by the Originator using the scheme.

Payment card

A generic term for any plastic card (credit, debit, charge etc.) used on its own to pay for goods and services.

PCI Data Security Standard

The PCI DSS is a multifaceted security standard that includes requirements for security management, policies, procedures.

PIN (personal identification number)

A set of characters, usually a four-digit sequence, used by cardholders to verify their identity at a point-of-sale or at a customer-activated device such as an ATM. The number is generated by the card issuer when the card is first issued and may be changed by the cardholder thereafter.

POS (point-of-sale)

A physical location where a customer makes a purchase.

POS terminal

An electronic device used to process card payments at point-of-sale.

POS transaction

A transaction taking place at point-of-sale.

Purchasing card

A payment card issued to businesses, companies or government departments to make supplier and/or trade payments. Also known as a procurement card.

Recurring transaction

An authority to charge a transaction to a credit or charge card at regular intervals (typically monthly), granted by the cardholder to a merchant, retailer or other service provider. The term 'recurring transaction' may apply equally to one of the transactions or to the authority under which these are charged. Formerly known as a continuous authority transaction.

Remote transaction

See card-not-present and card-remotely-present.

Solo

A debit card. All Solo purchases are subject to electronic authorisation.

Sponsor /Sponsoring Bank

BACS Member authorising Users and Bureau to submit data for processing. Though the term Sponsoring Bank is often used, this actually refers to banks and building societies.

Stand-alone card

A plastic card having a single function. The term is normally used in the context of ATM-only cards to describe cards issued by banks and building societies (e.g, cards related to savings products) to withdraw cash from ATMs but not to be used for purchases.

Switch

A UK debit card scheme rebranded as Maestro with effect from 1 July 2004.

Transaction Codes

A set of two character codes used throughout the UK clearings that define the type of payment. In the context of Direct Debit there are a number of codes for DDs already in use. AUDDIS requires three transaction codes for AUDDIS DDI messages. Here are all the codes:

These are:
01 - first collection of a Direct Debit
17 - standard Direct Debit collection
18 - re-presented Direct Debit
19 - final collection of a Direct Debit (e.g. last payment of loan)
0N - new DDI
0C - cancellation of an existing DDI
0S - existing manually set-up DDI being converted to AUDDIS specification
99 - Direct Credit payment VOCA

Visa

An international card scheme.

Visa Debit

A debit card scheme enabling cardholders to make payments to participating merchants in the scheme.