Glossary of Terms
Dunning? Net Terms Billing? This is the place to find out what it all means. Listed below are some billing and customer management related terms for your reading pleasure.
- Activation
- In the event that a customer elects to purchase service(s), their account is marked as "active" and they are eligible to receive and utilize services. May initiate a provisioning event.
- API
- Application Programming Interface - APIs allow users to program to a pre-constructed interface, instead of individually programming a device or piece of software.
- Approval Response
- An affirmative reply following a transaction authorization request.
- Audit Trail
- Manual or computerized tracing of the transactions affecting the contents or origin of a record.
- Auditability
- A characteristic of modern information systems, gauged by the ease with which data can be substantiated by trading it to source documents and the extent to which auditors can rely on pre-verified and monitored control processes.
- Authentication
- The process of confirming a user's identity; commonly done through the use of passwords or digital certificates.
- Automated Clearing House (ACH)
- A group of processing institutions linked by a computer network to process electronic payment transactions between financial institutions.
- Billing Cycle
- The billing period is a fixed amount of time between invoices. During the billing period, a customer may accrue several charges which are totaled and presented on a single invoice. The billing cycle is the time of the month or time of the year when the billing period begins.
- Capture
- Receiving and storing transaction data at the processor's host computer, to be submitted later for processing and payment.
- Channel(s)
- Individual outlets for distribution or reselling of products or services.
- Chargeback
- A chargeback is the reversal of the dollar value (financial liability), in whole or in part, of a particular transaction by the card issuer to the acquirer, and usually, by the merchant bank to the merchant. For the merchant business, chargebacks can be costly. You may lose both the dollar amount of the transaction being charged back and the related merchandise. You also incur your own internal handling costs to process a chargeback.
- Consolidated Billing
- The process of delivering all charges from several disparate systems on a single bill. Consolidated billing is an important driver of customer satisfaction and a key factor in reducing operations costs.
- Credits and Adjustments
- A billing adjustment may be initiated by a customer or automatically applied as the result of a promotion. Several reasons for making an adjustment include: goodwill, promotions, or invalid charges.
- Decline
- A response from the card issuer denying the use of the card for the attempted transaction. If a request for approval is declined, the merchant must ask the cardholder for another form of payment.
- Discount Rate
- A percentage rate that is charged by the acquiring bank for processing a merchant's transaction. The type of business and/or how the credit card is processed usually determine this rate.
- Dunning
- An accounts receivable function that uses an escalating series of notices and defined verbiage to document the contacts and attempts made in collecting payment from a customer.
- Encryption
- Method of scrambling data to protect a cardholder's personal information.
- Expiration Date
- The embossed date on a bankcard. After that date, the card becomes invalid and should no longer be accepted.
- Invoice
- A formal request for payment; a written record of a transaction submitted to customer or client when requesting payment for services or goods delivered; includes taxes where applicable.
- Merchant Account
- A written, commercial bank account established by contractual agreement between a merchant/business and a bank and/or a payment gateway. The agreement contains the respective rights, warranties, and duties with respect to accepting bankcards like Visa or MasterCard. You must apply for this account directly from your bank, or from the Payment Processor.
- Metering
- The act of capturing and measuring usage of a product or service in order for it to be rated according to a price and plan catalog and applied to an invoice.
- Net Terms
- Credit for services is extended to a customer for a specific amount of time prior to payment being due.
- One-time fees
- A one time charge which often applies to the delivery of products or services.
- Payment Gateway
- The transaction processing vehicle that receives encrypted transactions from the merchant server, authenticates the merchant, decrypts the payment information, and transmits the data to the authorization and settlement networks.
- PCI DSS
- The PCI DSS is a multifaceted security standard that includes requirements for security management, policies, procedures, network architecture, software design and other critical protective measures. This comprehensive standard is intended to help organizations proactively protect customer account data.
- Presentment Currency
- The currency in which a purchase is authorized through Visa, MasterCard or American Express.
- Provisioning
- Any event which involves modifying the services a customer will or will not receive. With automated provisioning, services are switched on or off via intra-system communication.
- Rating
- The process by which charges are assigned to a subscriber based on the usage of a resource.
- Recurring Charge
- A fee paid over the length of a term period which often applies to ongoing services. A recurring charge is part of a subscription which may include one-time setup costs and renewal costs at the end of the term length.
- Refund
- A refund occurs when the merchant rebates all, or a portion, of an original transaction amount to the cardholder. Refunds are made to the same card that was used for the original transaction.
- Self-Service
- Self-service technology "turns the monitor around" and empowers your customers and employees by giving them a self-directed way to interact with your business.
- Settlement
- The process in which a merchant transmits batches of transactions to the acquirer.
- Settlement Currency
- The currency in which a merchant receives funds after the completion of a foreign exchange conversion.
- Software as a Service (SaaS)
- Software as a service (SaaS) is a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet.
- Statement
- A written record of an account; also a summary of outstanding (unpaid) invoices. Unlike an invoice or bill, a statement is not generally used as a formal request for payment but rather as a reminder of amounts owed by a customer.
- Transaction
- Any action between a cardholder and a merchant or member that results in activity on the account, such as a purchase, cash advance or credit.
- White Labeling
- A type of reseller arrangement where the reseller contracts with the service provider to deliver a fixed set of services to a particular area or market.
- Workflow
- Workflow involves processing orders that are placed directly with the billing system. In this scenario the billing system acts as a hub for fraud screening, order processing, and order fulfillment.
