Download ETA CPP Study Guide – Certified Payments Professional Exam Prep Comprehensive study guide and more Exams International Business in PDF only on Docsity!
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
NABU, APF and FANF - ansMasterCard implemented a new fee, the Network Access and Brand Usage fee (NABU). And following right on the heels of the MasterCard announcement, on July 1, 2009 Visa implemented their U.S. Acquirer Processing Fee (APF). Card brand dues and assessments - ansIn addition to Interchange, each card brand includes additional fees based on the transaction amount and per transaction. These fees are called dues and assessments and typically range from 0.105% - 0.45% on the transaction amount [ $0.0025 - $0.04.] Like interchange, assessments are exactly the same for all credit card processors and no processor can give you a lower rate or a better deal on assessments. AVS and switch fees - ansThe fee is charged when your business utilizes the Address Verification Service to check that the address provided by a cardholder matches the address on file with the credit card company. Authorization fee - ansThe voice authorization fee applies when you use a telephone dial-up service for transaction authorization. A fee is charged for each call that is made. Voice authorization is useful in the event your terminal or software malfunctions or your internet connection isn't working. Batch fee - ansA fee that is charged when you settle your daily transactions (also known as the batch) with your credit card processor. If you have no credit card transactions to settle on a particular day, you are not charged this fee. Clearing and settlement fees - ansclearing denotes all activities from the time a commitment is made for a transaction until it is settled. Chargeback and representment fees - ansIn short, a chargeback is a reversal of funds transferred. Statement or reporting fees - ansFees that are charged for receiving statements or reports. Rewards Cards - ansA cashback reward program is an incentive program operated by credit card companies where a percentage of the amount spent is paid back to the card holder. Card Not Present transactions - ansA card not present transaction (CNP, MO/TO, Mail Order / Telephone Order, MOTOEC) is a payment card transaction made where the cardholder does not or cannot physically present the card for a merchant's visual examination at the time that an order is given and payment effected. Quick Service Restaurants (QSR) - ansa specific type of restaurant that serves fast food cuisine and has minimal table service. Emerging Markets - anscountries in the process of rapid growth & industrialization Level 1 Data - ansLevel I purchasing card data includes the same information captured during a traditional credit card purchase transaction. This includes: total purchase amount, date, merchant category code and supplier/retailer name. Level 2 Data - ansLevel II purchasing card data includes the same information captured at Level I, plus the following: sales tax amount, customer's accounting code, merchant's tax ID number, applicable minority - and women-owned business status and sales outlet ZIP code. Level 3 Data - ansLevel III purchasing card data includes the same information captured at Levels I and II, plus the following: quantities, product codes, product descriptions, ship to ZIP, freight amount, duty amount, order/ticket number, unit of measure, extended item
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
amount, discount indicator, discount amount, net/gross indicator, tax rate applied, tax type applied, debit or credit indicator and alternate tax identifier. Discount Rate (Credit/Debit) - ansThe discount rate is the fee paid by merchants to credit card processors as a fee associated with accepting general-use credit cards (such as Visa, MasterCard, American Express and Discover). Typically this fee runs between 1 percent and 3 percent, depending on the nature of the transaction. Daily or monthly discount - ansWith monthly discount, your processor deducts fees from your account in one lump sum once a month. With daily discount, your processor charges fees daily throughout the month as well as at the end of the month. Surcharge - ansA charge added to the usual cost Billback - ansBillback or bill back is an accounting service and/or suite of software that is used for cost recovery. ERR Rates - ansEnhanced Rate Recovery Pricing. As a merchant business with an ERR rate of 1.69% for your merchant account, you will be charged 1.69% for any transaction that qualifies on The Interchange Table at 1.69% or below. Interchange Plus - ansInterchange Plus pricing gets its name based on the fact that the rate charged for the transaction comes straight from the Interchange table "plus" a surcharge amount. Tiered - ansTiered pricing gets its name from the fact that there are multiple tiers set up to determine the price associated with the transaction. Sales Volume - ansThe quantity or number of goods sold or services sold in the normal operations of a company in a specified period. Transaction Counts - ansthe total number of transactions that are processed within a merchant account. Average Ticket - ansAverage ticket is a metric that provides details on the average amount of sales by a given customer. It is used by a range of businesses when analyzing business performance and sales activity. Authorization Fees - ansThe amount of money that is charged directly to an individual merchant account each time communication is made between credit card processing software (when the sale transaction is processed online, etc.) or point of sale (POS) terminal (when the sale transaction is processed physically in person) and the authorizing network. Effective rate - ansThe effective rate of a credit card processing statement is the total processing fees divided by total sales volume. Batches - ansBatch credit card processing is the practice of a merchant processing all of its authorized credit card transactions for the day after the close of business or at a time determined by the credit card processor. Chargeback Activity - ansA chargeback is a transaction reversal meant to serve as a form of consumer protection from fraudulent activity committed by both merchants and individuals. PCI Compliance - ansThe Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards designed to ensure that ALL companies that accept, process, store or transmit credit card information maintain a secure environment.
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
Dial UP Terminal - ansA terminal that can read the track data on a magnetic stripe and communicate transaction information to the frontend platform and receives authorization instructions via the merchant's phone line usually by dialing a toll free number. IP Terminal - ansdoes the same thing as a dial terminal except that the terminal communicates transaction information to the frontend platform and receives authorization instructions by utilizing the merchant's connection to the internet. EMV Terminal - anshas the ability to take cardholder data from a chip embedded within the card and communicate transaction information to the frontend platform and receives authorization instructions by utilizing the merchant's phone line or Inter- net connection. Wireless terminal - ansprovides the ideal solution for businesses seeking the most effective way to complete credit card transactions off-site. Most wireless credit card terminals support credit and debit transactions and are equipped with an internal PIN pad. Wireless terminals can be used on the countertop or in a mobile environment. Sale - ansfor a sale, swipe the customer card or manually enter the credit card number, input sale amount, then press enter. The terminal will then transmit information through the network for approval, and a merchant receipt will be printed. Mobile solution - ansallows a merchant to accept credit cards using a cell phone with or without a card swipe mechanism. Internet solution - ansa processing method using a secure web server that provides an interface for merchant websites and shopping carts that require real-time transaction processing. Depending on the merchant's software they can connect to a frontend via either an SSL server or payment gateway to get a real-time credit card authorization. PIN pad - ansan electronic device used in a debit or smart card-based transaction to input and encrypt the cardholder's PIN (personal identification number). The PIN pad is required so that the customer's card can be accessed and the PIN can be securely entered and encrypted before it is sent to the transaction manager of the switch or the bank. Check reader - ansa payment automation device that reads the MICR (Magnetic Ink Character Recognition) information on checks. Contactless reader - ansany pocket-sized card with embedded integrated circuits that can process and store data and communicate with a terminal via radio waves. Void Last Sale - ansto void the last sale, press the screen button next to void, choose last, verify transaction information on the display screen, then press enter. The transaction will be voided and a receipt showing the void will be printed. Credit / refund - ansto credit a refund, press the screen button next to refund, swipe the customer card, input return amount, press enter, and print merchant receipt. Header Information - ansmerchant's business information Deposit Information - ansdaily account of the month's transaction information Deposit Item Summary - ansa summary of the month's transactions Settlement/Discount - ansthe month's transactions sorted by card type and fees associated Surcharges - ansdowngraded transactions
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
EBT - anselectronic acceptance of government benefits (e.g., food stamps and/or cash). These cards are generally accepted at grocery stores. Debit - ansan ATM bankcard, also known as a check card, that allows a merchant to deduct money directly from a consumer's bank account. The use of a true debit card requires the cardholder to enter a PIN to complete the transaction. Gift card/loyalty programs - ansa magnetic-stripe or smart (chip) card that replaces traditional paper gift certificates. The program is based on gift card usage that generates points in exchange for products and services. Split Funding - ansA merchant may receive a capital advance from a third party and direct the processor to repay the third party with a % of their daily credit/debit card processing deposited into the third party's bank account and the remainder deposited into the merchants bank account. Checks - ansa negotiable paper document drawn against deposited funds exchanged with a merchant for payment of products or services. Check Guarantee - ansthis is the process of issuing approval codes for check acceptance for merchants. With Check Guarantee, if a check is returned to a merchant for any reason and they followed the proper acceptance procedures, they are automatically credited for the 'bad' check and collection efforts are pursued directly with the check writer. While this process is better than regular check verification, the cost is higher. Check Verification - ansthis is the process of issuing verification codes for check acceptance for merchants. With Check Verifica- tion, if a check is returned to a merchant, they are typically not reimbursed by the processor. Collection efforts will be made on behalf of the merchant at an additional cost, however there is no 'guarantee' of payment on uncollected items. Therefore, this service is less expensive than Check Guarantee. Check 21 - ansthis is the process of capturing a check at the point of entry (can be point of sale scanner or a picture on a mobile phone). The check image is transmitted to the issuer and paid through the settlement process. ACH Debit - ansthis is the process whereby the consumer gives a pre-approval to have funds debited from either their checking or savings account. This is not a real-time transaction and can be subject to non-sufficient funds rejection. cardholder - ansan end user or consumercard issuer is any banking institution that provides credit or debit cards to a consumer. Examples of card issuers include Chase, Capital One, Bank of America and credit unions. acquiring bank (or acquirer) - ansthe bank or financial institution that processes credit and/or debit card payments for a mer- chant. Examples of acquirers include HSBC and Wells Fargo. payments processor - ansa company (often a third party) appointed by a merchant to handle payment card transactions for acquiring banks. There are two types of processors: front-end and back-end. Front-end processors have connections to various card issuers and supply authorization and capture services to the acquiring banks' merchants. Back-end processors accept settle- ments from front-end processors and, via The Federal Reserve Bank, move the
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
authorization will stay valid for a period of time, determined by the issuer, after which the held amount will be returned to the cardholder's available credit (see authorization hold). Some transactions may be submitted in the batch without prior authorizations; these are typically seen where the authorization was unsuccessful but the merchant still attempts to force the transaction through. (Such may be the case when the cardholder is not present but owes the merchant additional money, such as a hotel stay extension or car rental.) Clearing and Settlement - ansThe acquirer sends the batch transactions through the card brand, which debits/credits (if charge- backs and returns exceed sales for the day) the issuer for payment and credits/debits the acquirer. Essentially, the issuer pays the acquirer for the transaction. Funding - ansOnce the acquirer has been paid, the acquirer pays the merchant. The merchant receives the amount totaling the funds in the batch in total or less the discount fees charged. Chargeback - ansA chargeback is an event in which money in a merchant account is held due to a dispute relating to the transaction. Chargebacks are initiated by the cardholder or the issuing bank. In the event of a chargeback, the issuer returns the transaction to the acquirer for resolution. The acquirer then forwards the chargeback to the merchant, who must either accept the chargeback or contest it. Maximum ticket - ansrisk systems must monitor the average ticket and a maximum ticket. Transactions above the maximum ticket may be an indicator of misinformation during the application process, a change in the merchant product, cardholder fraud, a bust-out scheme, or perhaps collusion and should be reviewed and possible investigated. Average ticket of the merchant - ansif the application shows a $30 average ticket and you see an average ticket of $400, you should investigate to ensure they are selling what the application stated. Alternately, it could be a fraudulent cardholder transaction. Monthly volume - ansapplications typically request the average monthly volume and a peak season volume. Sales beyond these volumes may indicate risk problems or may warrant adjustments in account set up to off set merchant growth. Larger than expected volumes in the first month may be an indicator that the merchant has past sales they are trying to process, a bust-out scheme, or that the application was erroneous or false. The volume should also be balanced against similar merchants. Larger volumes than similar merchants may be an indicator of risk and should be investigated. Large dollar or excessive credits - ansmonitoring credits is a good way to gauge the satisfaction of your merchant's customer with the products and/or services sold. Excessive credits may indicate money problems at your merchant. Large dollar credits may be an indicator of a merchant utilizing the card schemes to layer money amongst their various accounts. It is required that all credits have an offsetting sale. Credits without an offsetting sale may be an indicator of employee theft, merchant system hack, or a fraudulent merchant. Frequent credits for large amounts may be an indicator of money laundering. Chargeback monitoring - ansif your merchant is receiving a lot of chargebacks, you should quickly evaluate the reason codes behind the chargebacks and question the merchant's practices. Increased chargebacks may mean your merchant's business is in financial distress,
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
is experiencing supplier issues, or has gone rogue and is committing fraud, potentially against the consumer. This is especially the case if the chargebacks are for unauthorized charges, services not received, or duplicate transactions. Percentage keyed vs. swiped - ansmonitoring the percentage of swiped transactions vs. keyed transactions is a simple way to tell whether your merchant has shifted from retail to MOTO (mail or telephone order) or internet. If you see more keyed transactions than indicated and subsequently approved on the application, you should talk with your merchant to understand why transactions are being keyed. Increased key-entered transactions may also be an indicator of factoring or money laundering where the cards are not present. Repeat or excessive authorizations - ansevaluate authorization logs to help determine whether your merchant has software problems that cause repeated authorizations or whether your merchant is being targeted by a fraudster seeking to find good card numbers. Monitoring excessive authorizations is also a way to help your merchant avoid brand fees associated with non-settled transactions. Merchant information changes - ansanother area to monitor is when merchants change checking accounts, contact information, or websites. It is important to understand why the changes are being made, how often, who is authorizing the changes, and what impact the changes might have on the business. Financial strength of the business - ansPeriodically checking the financial health of your merchant and watching trends in processing volume can help protect against unexpected financial loss. If the merchant is struggling to cover their costs of goods it is possible owed fees may be returned as NSF (non-sufficient funds). Future delivery - ansThe risk with transactions dependent on the future delivery of goods and services is that the chargeback period may be quite lengthy. Examples include household furniture and/or appliances, membership dues, home renovation/ remodeling, or service contracts. If the merchant goes out of business prior to delivery or completion of services and is not capable of covering the returns/chargebacks, the acquirer will absorb loss. PIN debit transactions - ansThe regulations for PIN debit and the PIN debit network rules allow for cardholder disputes in certain instances. You should be aware of these regulations and understand the potential impact on your business. Data security - ansWith the increase in merchants using point of sale systems (not just a terminal) comes an increase in the likeli- hood that you will experience a data breach at a retail merchant. Diligence should be used in ensuring software and hardware in use is PCI compliant and that your merchant follows proper procedures and guidelines for protecting cardholder data. EMV Chip Card - ansIf a consumer presents a chip card and the merchant is not able to accept the card AND the consumer claims fraud, the liability is now held by the merchant. This is a new risk not previously faced by card present merchants. The details of this shift are below. Address Verification Service (AVS) - ansThe Address Verification System (AVS) is a system used to verify the address of a person claiming to own a credit card.
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
Account History - ansThe payment history of an account over a specified period, including the number of times the account was past due or over the credit limit. Accountholder Authentication Value (AAV) - ansOne type of security used in the smart card industry to describe a value on the chip that is used to authenticate the accountholder. (Source: Smart Card Alliance) Account Maintenance - ansFor both the card issuer and the card acquirer, the operation involving nondollar changes to the database, such as name, address, and checking account changes, product profiles, billing information, and rate changes. Account Mask Information - ansEditing criteria used to verify the accuracy of a seller's account number in certain electronic payment transactions. Account Number - ansIssuing: An issuer‐assigned number that identifies a cardholder's account, the issuer, and the type of financial transaction card (e.g., commercial card or debit card). Acquiring: An acquirer‐assigned number that identifies a particular merchant or group of merchants. Note: The first six digits of each number identify the issuing and acquiring institutions. See BIN. Account-Number-Verifying Terminal - ansA point‐of‐transaction terminal that may be required by Visa at specified high‐risk locations. This terminal reads the account number encoded on the magnetic stripe or embedded in the chip (smart card), compares the last four digits of the encoded account number to the keyentered last four digits of the embossed account number, and transmits the full, unaltered contents of the magnetic stripe or chip in the authorization message. Accounts Payable (A/P) - ansDebts a business owes its creditors. Accounts Receivable (A/R) - ansDebts owed to a business. Account Receivable Entry (ARC) - ansA single-entry debit initiated by an automated clearinghouse (ACH) originator to a consumer account of an ACH receiver pursuant to a source document provided by the receiver via postal mail, or at a drop box location or via electronic means. When a paper check payment is converted to an ACH electronic payment and with ARC, the check is destroyed after conversion; in POP, the check is returned to the check writer at the time of payment. These transactions flow through the ACH Network. (Source www.NACHA.org) Account Takeover - ansSee Cash Theft. Account-to-Account - ansSee A2A ACH - ansSee Automated Clearing House ACH Fraud - ansUtilizing the automated clearinghouse network to access funds illegally. Some ACH fraud categories include: unauthorized transactions; returns/60‐day right of recredit; consumer fraud against merchants; fraudulent use of stolen bank accounts; transaction‐level fraud; and merchant‐level fraud. ACH Network - ansThe Automated Clearing House (ACH) Network facilitates commerce, electronically, by serving as an efficient, reliable and secure payments system. NACHA, led by member depository financial institutions and payments associations, fulfills this purpose by managing the development, administration, and governance of the ACH Network, and by
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
providing superior services and value to its members as the industry association responsible for ACH payments. The ACH Network connects the originating depository financial institutions with the receiving depository financial institutions. ACH Operator - ansThe central clearing facility, operated by a Federal Reserve Bank or a private‐sector organization on behalf of depository financial institutions, in which participating financial institutions transmit or receive ACH entries. ACH Regional Associations - ansThe 36 regional governing bodies of the Automated Clearing House Network rules and regulations. Acquirer - ansThe financial institutions that directly or indirectly enter into contractual relationships with merchants for the acceptance of plastic cards as a form of payment and for maintaining and servicing such relationships. Acquirer Fraud Activity Level - ansSee Acquirer Monitoring Program. Acquirer Monitoring Program - ansA program that monitors an acquirer's fraud activity level and provides reports to the acquirer when its level exceeds established thresholds. Advices and/or Alerts are sent at predefined volumes of fraudulent activity, when the fraud amount exceeds a set dollar amount per month, or when the acquirer's fraud activity to sales ratio exceeds a calculated average. Acquirer Payment Gateway - ansSee Payment Gateway. Acquirer's Processing Date - ansThe date upon which the transactions are submitted into interchange for clearing and settlement. Acquirer's Reference Number (ARN) - ansA 23‐digit or 24‐digit identification number specified by the Visa and MasterCard rules and submitted with the clearing records by the backend processor. It includes the bank identification number (BIN) and the acquirer's processing date. Acquiring Bank - ansThe bank that contracts with a merchant, as required by card association rules enabling the merchant to accept the association‐branded bank cards. These cards may be consumer and/or corporate and credit and/or debit or prepaid. The merchant has an account with this bank and each day deposits the value of the dayʹs credit card sales. Acquirers buy (acquire) the merchantʹs sales slips and credit the ticketsʹ value to the merchantʹs account. See Merchant Bank. Acquiring Member - ansThe member of MasterCard or Visa that holds the liability for merchant relationships and in return receives all bank card transactions from the merchant. This term can also be used to describe the disburser of funds in a cash disbursement. Acquiring Processor - ansA third party contracted by an acquirer to provide credit card acquiring services, such as clearing, billing, reporting, settlement, and operational services. Some acquirers outsource this processing activity to gain cost‐effectiveness. Acquisition - ansOne organization's purchase of another or the merger of two or more organizations. Acquisition has different consequences under corporate and tax law depending on whether it involves the assets or the capital stock of the target company. Activation - ansA card fraud prevention mechanism used by issuers. To activate a bank card received by mail, the cardholder must call a toll‐free telephone number. Operators or
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
ADV - ansSee Automated Accounting Device. Advanced Encryption Standard (AES) - ansA federal information processing standard (FIPS) outlined in FISPA Publication 197 that specifies a cryptographic algorithm for use by U.S. government agencies to protect sensitive, unclassified information. AES uses keys that are 128, 196, and 256 bits to encrypt and decrypt information in blocks of 128 bits. It can encrypt data much faster than 3DES (Triple DES), which it replaces. Advance-Fee Loan - ansA loan or line of credit calculated so that all of the fees and finance charges are deducted before the consumer receives the principal. Advice - ansA daily, weekly, or monthly report that alerts an acquirer that a merchant has experienced above‐average levels of suspect or fraud activity. AES - ansSee Advanced Encryption Standard. AF - ansSee Audio Frequency. AFC - ansSee Automatic Fare Collection System. AFDC - ansSee Aid for Dependent Children. Affiliate - ansA member or licensee of Visa International or Visa U.S.A. or an organization affiliated with a MasterCard member that participates under the member's rule or card plan on either the cardholder or merchant side. Affinity Card - ansA Visa, MasterCard, Discover or American Express card bearing the trade name or mark of an affinity partner. These cards are issued through marketing alliances, an organization, or a collective group (such as a professional association or special interest group). The affinity partner's name and logo are shown on the card, and the partner then solicits its membership or group for special rewards and promotions. Popular with sporting teams and university alumni groups, affinity cards work like regular credit/debit/prepaid cards and can be used anywhere that the brand is accepted. The card issuer often pays the affinity organization a royalty on charge transactions. Affinity Partner - ansAn entity that is not eligible for membership in either Visa or MasterCard and has a relationship with an issuer for the issuance of affinity cards. Agent - ansUnder the law of agency, a person authorized by another (known as the "principal") to act for the principal. Agents can include processors, independent sales organizations, third‐party servicers, independent contractors, and financial institutions engaged by a bank card member to provide services or act on its behalf in connection with payment services. For example, an independent sales organization may have a contractual relationship with a bank card member to sell and service retail merchants, thus becoming an agent of the member. Agent Agreement - ansA contract with an agent under which the agent and the principal can be obligated. See Agent. Agent Bank - ansIssuing: Agent banks contract with larger issuing (or sponsoring) banks to issue cards that are branded with the agent bank's name. Cardholders are solicited through the agent. Shared revenue or fixed compensation may be negotiated, but the liability rests with the sponsoring bank, not the agent. Acquiring: Similar relationships exist in which the agent sells and services the merchants on behalf of the principal bank.
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
Agent member - ansA member of Visa or MasterCard that by agreement, participates in another member's card program, usually by turning over its cardholder and merchant applications to the member administering the card program and by acting as a depository for merchants. Agent Reference File - ansA file maintained by Visa U.S.A. containing information about independent sales organizations, third‐party processors, third-party servicers, and independent contractors. Age Verification - ansA security authentication, which can be POS terminal-based, that is used by certain age‐sensitive market segments such as liquor and tobacco outlets, bars, and casinos. The merchant can verify the consumer's age and deny transactions to an underage consumer. Aggregators - ansA service bureau that provides bill presentment and/or payment consolidation services. Issuing: Aggregators enable a bank to enroll and aggregate information from multiple bank and brokerage accounts so that it can be presented in one place to the consumer. Merchants: Merchants such as PayPal and Amazon—which act as electronic Internet malls—can process under one merchant number but with multiple sub‐ merchant numbers for their individual accounts. Aging - ansThe process by which account receivables are classified by the amount of time that has passed since the date of the invoice. It is used for the purpose of determining delinquency, ranging from current to charge‐off status. Aid for Dependent Children (AFDC) - ansA federally funded and usually state- or county- administered public assistance program that provides supplemental financial aid to qualifying households that include one or more minor children. An AFDC family may receive benefits and services from other assistance programs, including food stamps, Medicaid, and subsidized child care. Families receive food stamps via an EBT (electronic benefits transfer) card, which works like a debit card. The EBT system reduces fraud, theft, and abuse. Alert - ans1. Weekly notification to an acquirer when the acquirer's suspect transaction or fraud activity level exceeds a specified risk identification service parameter. 2. A notification to an acquirer when the acquirer's fraud activity‐to-sales ratio exceeds a specified Acquirer Monitoring Program alert threshold. Alert Merchants - ansThose merchants that have more than 8 percent of their sales dollars labeled as fraud transactions in two consecutive months. Acquirers must terminate or assume chargeback liability on all fraud for one year. Algorithm - ansA step‐by‐step procedure for solving a problem or accomplishing an end, especially by a computer. Alphameric or Alphanumeric - ansA set of letters and numbers. When used in reference to computer input and output, the set usually is expanded to include the uppercase and lowercase alphabetic characters (A‐Z, a‐z), the numeric characters (0‐9), and special characters (such as the symbols $, #, and @, mathematical symbols, and punctuation marks). Altered Card - ansA card on which the original embossed or encoded information has been altered for fraudulent purposes.
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
machines was significant, as the law required accessibility for the physically impaired as well as the sight‐ and hearing‐impaired. AMEX - ansSee American Express. AML Policy - ansSee Anti‐Money Laundering Policy Analog - ansInformation presented in the form of a continuously varying signal. Angel Investor - ansA wealthy individual who invests his/her private money in what he/she believes to be promising opportunities, such as startup companies. Sometimes two or more "angels" will jointly invest in opportunities to spread the risk. (Source: ventureline.com) Anonymous Proxy Detection - ansA fraud prevention and risk management tool used in conjunction with Internet processing that rejects a transaction from known anonymous proxies. Anonymous proxies are frequently used by hackers. ANSI - ansSee American National Standards Institute. ANSI X12 - ansStandards that regulate electronic data interchange (EDI) as governed by the American National Standards Institute Accelerated Standards Committee. ANSI X9.17 - ansStandards for authentication and message encryption key management. These standards are maintained by the American National Standards Institute and can be found at the Computer Security Resource Center (www.csrc.nist.gov). ANSI X9.52 - ansStandards for data encryption and decryption. These standards are maintained by the American National Standards Institute and can be found at the Computer Security Resource Center (www.csrc.nist.gov). Annual Fee - ansA fee paid by a cardholder to the issuer for the privilege of holding a financial transaction card and using it to buy goods and services. Not all cards have annual fees. Annual Percentage Rate (APR) - ansThe annual cost of financial charges levied on consumer credit as required by the Truth in Lending Act (Regulation Z) of 1969. The lender's administrative costs, profit margin, and interest charges on the loan are typically added to a charge payable throughout the term of the contract and expressed as a percentage of the value of the transaction. The APR is often calculated as the monthly rate times 12. Anti-Money Laundering Policy (AML Policy) - ansAll companies (including merchants) that deal with cash loads onto prepaid cards must have an AML policy and employees must be trained and knowledgeable on that policy. This includes filing of certain government reports pertaining to over‐the‐limit cash loads and suspicious transactions. A/P - ansSee Accounts Payable. API - ansSee Application Program Interface. APP - ansSee Application. Applet - ansA compact program that can be downloaded quickly and used by a remote computing device. Applets are not allowed to access certain resources on the remote device. Application (APP) - ansAny form completed by an applicant. Typically, an application will request name, address, and other similar contact information that can be used for credit and risk assessment purposes. Examples are the profile form filled out by the cardholder requesting a card or a merchant applying to accept bank cards as a payment medium.
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
Application Program Interface (API) - ansA formalized set of software calls and routines that can be referenced by a software application program in order to access supporting network services. Application Processing - ansBoth issuers and acquirers process applications, typically by reviewing the application through an operational department and running risk management procedures, such as credit and background checks. The application is approved based on preset criteria. If approved, it is key-entered into the database that generates the cardholder or merchant production and set‐up. If the application is given pending status, it is returned to the sales area or directly to the customer for more information. If it is denied, the applicant receives a letter explaining the reasons for the denial. Most acquirers have automated this and process the majority of applications electronically. Pending applications are also reviewed electronically. Application Service Provider (ASP) - ansA third‐party provider that supplies ancillary computing services. For example, a vendor can hire an ASP to handle the presentment of his electronic invoices. Approval Response/Code - ansThe response code issued by a card‐issuing bank that allows a sale to be charged to the cardholder's account. The approval is a positive response to an authorization request from the acquiring merchant. APR - ansSee Annual Percentage Rate. APTA - ansSee American Public Transportation Association. A/R - ansSee Accounts Receivable. Arbitration - ans1. The submission of a disputed matter to a private or official person ("arbitrator") for determination. The arbitrator is selected in a manner provided by law or agreement. Arbitration attempts to avoid resorting to the judicial system and its costs. Many contracts call for the resolution of disputes by arbitration rather than by litigation. 2. The process followed by the card companies to determine whether an issuer or an acquirer has ultimate responsibility for a chargeback. The process is initiated by either member after the re‐presentment process has been completed. Arbitration Filing - ansA formal case submitted after unsuccessful dispute resolution through the chargeback‐presentment cycle. ARC - ansSee Accounts Receivable Entry. Archiving - ansThe storing of files, records, and other data for reference and backup. ARN - ansSee Acquirer's Reference Number. ARU - ansSee Audio Response Unit. ASCII - ansSee American Standard Code for Information Interchange. ASP - ansSee Application Service Provider. ASP Hosted Systems - ansA third‐party application service provider that provides front‐end, data center, or transaction processing capabilities for either a buyer or a seller. Assent - ansIn the Automated Clearing House (ACH) process, a consumer's consent that his bank account be debited for a specific amount on a specific date or period. Assessments - ansSee Dues and Assessments.
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
transaction used to validate the integrity of data provided to identify one or more of the following: issuer, card, chip‐reading device, and message content. Authentication Key - ansA data‐encryption algorithm key used to authenticate data in accordance with specific encryption standards. This key can be used to generate and approve a personal identification number. Authorization (AUTH) - ansThe first of seven stages in processing a bank card transaction. In this stage, the merchant issues a request to charge the amount to the cardholder's card. The card issuer or an authorized agent, such as an authorizing processor or a stand‐in processor, references the cardholder's account status and credit limit and approves or denies the transaction. Authorization Approval - ansThe response by the issuer to an authorization request that approves the transaction. Authorization Certificate - ansAny of several types of certificates containing information used in the authorization process. Note: Authorization information may also be contained in a public key certificate, which also serves as an authorization certification. Authorization Code - ansNumber assigned by the authorizing processor, card issuer, or stand‐ in processor to a cardholder's transaction which has received specific approval. The code is proof that the transaction has been properly authorized. The code is returned in the authorization response message and is always recorded on the transaction receipt and stored within the point‐of‐sale system. Authorization Only (Auth Only) - ansA point‐of‐sale process in which a merchant requests to check a cardholder's account validity via this message to the issuer. This type of transaction is rarely used. Also see Status Check Procedure. Authorization Request - ansA merchant's or acquirer's request for authorization. Authorization Request Cryptogram - ansA code or cipher used for a chip card process called online card authentication. The cryptogram is generated by the card for transactions requiring online authorization. It is sent to the issuer, who validates the authorization request cryptogram to ensure that the card is authentic and that card data was not copied from another card. Authorization Response - ansA card issuer's, authorizing processor, or stand‐in processor's response to an authorization request or account number verification. The response can be approved, denied, referred to the issuing bank, or coded to pick up the card. Authorization Response Code - ansA code generated by the chip‐reading device in chip transactions authorized offline. The code is based on the issuer's instructions programmed in the chip. The acquirer must provide the authorization response code in the clearing record. Authorization Preferred - ansAn embossed Visa Prepaid card that is issued with a Service Code in the magnetic stripe that requests authorization when the magnetic stripe is read by a POS terminal that recognizes and processes Service Codes, but in all other ways operates like a standard Visa card. Authorization Processor - ansA processor that provides authorization services for merchants or issuing members. These services may include a voice backup or ARU capability.
Exam Prep
Comprehensive study guide for the ETA Certified
Payments Professional (CPP) exam, covering all key
concepts in payment processing, merchant services,
transaction types, risk management, compliance
standards, fees, interchange pricing, and terminal
technologies.
Latest Updated Exam Study Guide 2025/2026.
Authorization System - ansThe network and system used to effect an authorization of the payment instrument for a purchase. The system has parameters and criteria set up by the issuer of the instrument that, when met, will approve or deny the transaction. Authorization Terminal - ansA point‐of‐sale terminal permitting electronic authorization. Authorization terminals do not necessarily capture transaction data into a payment system. See EDC Terminal. Automated Accounting Device (ADV) - ansA machine‐readable, information-only ACH transaction that represents accounting information sent from an ACH operator to a participating depository financial institution for use in automated accounting systems. Auto-Close - ansA process associated with host‐based terminals in which the system automatically initiates and operates an end‐of‐day process for capturing and submitting items for clearing and settlement. This process forces the daily submission of items. In some cases, the merchant must make an adjustment in order to balance the items before submission. Automated Bill Payment - ansThe process for crediting funds from a consumerʹs bank account to a creditor's account for the payment of a consumerʹs bill or obligation. Automated Fuel Dispenser (AFD) - ansBoth Visa and MasterCard have an interchange rate category for petroleum merchants using pay‐at‐the‐pump unattended terminals. The merchant category code must be oil and gas, petroleum (5542). Only one electronic authorization per transaction is allowed, and the magnetic stripe components must be transmitted. For Visa, the transaction must be sent for processing within 24 hours of the authorization and for MasterCard within 2 days. MasterCard and Visa allow a $50 "pre‐auth" as the transaction authorization. The merchant's name and location must be provided in the authorization record. This category includes all rate structures and card types. Visa calls their program CPS/AFD and MasterCard has three interchange rate programs for gas stations and convenience stores: Petroleum, Petroleum‐Service Station and Petroleum‐CAT/AFD. Automated Clearing House (ACH) - ansThe paperless funds transfer system maintained by the Federal Reserve and other approved operators that utilizes electronic networks to exchange funds transfer items. Also called automatic check handling. Automated Enrollment Entry (ENR) - ansAn ACH credit or debit enrollment entry initiated by a participating depository financial institution (DFI) to a federal government agency on behalf of an account holder. Automated Notification of Change (COR) - ansAn ACH notification of change transaction automatically derived from the original erroneous item. The acronym COR is an abbreviation for correction. Automated Teller Machine (ATM) - ansAn unattended computer terminal that performs basic teller functions: dispensing cash, accepting deposits, cashing checks, accepting loan payments, and enabling a bank customer to order transfers among accounts and make account inquiries. The first ATM was deployed as a cash dispenser by Barclay's Bank in the United Kingdom in June 1967. The first U.S. ATM was deployed in 1969 by Chemical Bank at its branch in Rockville Centre, N.Y. Some machines have more functions and also sell products such as postage stamps, while others are limited‐function cash dispensers only. Recently
