Acquiring Bank – They are an entity that manages transaction processing for credit card associations such as Visa, MasterCard, and AMEX. The kind of card the customer uses will determine which bank will acquire the transaction in each case.

Encryption – Data is secured by encrypting the card information at the point of entry and keeping it that way until it reaches a secure decryption environment, where it needs a key to be readable. The data cannot be misused even if stolen during transit from the point of entry to the safe location.

Merchant – The company sells something and collects payment for it.

Merchant Account – Processing credit card transactions require a specific kind of bank account. The acquiring bank permits the merchant account to use funds from the customer’s account to pay the merchant for online purchases, subject to an agreement between the acquiring bank, merchant, and merchant account. The money will be held in the merchant account for a predetermined duration, about three to five days, before being transferred to the merchant’s bank account.

Payment Gateway – A solution that enables businesses to accept electronic payments online.

A gateway can be used in a couple of ways:

– It can be an API connection between the payment interface (webstore or ERP system) and the merchant account. It is also a virtual terminal that the merchant can use to input credit card information.

– Instantly transmits card information upon order submission from a customer.

PCI DSS Compliance – A group that represents the major credit card companies created a set of guidelines to protect cardholder information.

Tokenization – It is a technique for protecting card data that involves storing actual data offsite and substituting sensitive data on a company’s internal networks with a one-of-a-kind, meaningless token.