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The Debit Payments Glossary: Popular Industry Terms Defined

Don't know your CNP from your EFT? No worries. This glossary of debit and payments terms will serve as your continually expanding and comprehensive list of industry terminology, acronyms and buzzwords. With it, PULSE has only one goal in mind: to unravel the lingo and help you better understand the payments landscape — and perhaps secure your spot as one of the top debit experts in your organization.

Application Identifier (AID) – Unique identifiers controlled by card brands and EFT networks that are personalized onto chip cards and used by merchant terminals during transaction processing to determine available card-specific features and functions. U.S.-issued debit cards generally have two AIDs, both the card brand’s global AID and the EFT networks’ common AID. Depending on the card brand, merchants may be required to choose the common AID during transaction processing if they want to route transactions to the debit networks on the back of the card (the “Unaffiliated Networks”).

Authorization request – A transaction that if approved, results in a hold on the cardholders account. This hold does not cause any funds to be moved. The movement of funds requires the submission of a second message, knows as clearing message.

Automated Clearing House (ACH) – An electronic payments system, outside the card networks, for clearing and settling transactions. Funds are electronically exchanged to and from participants’ accounts.

Automated Teller Machine (ATM) – Cash dispensary machines deployed by financial institutions and Independent Sales Organizations (ISO).

Bank Identification Number (BIN) The first six to eight digits of a card number. This is sometimes referred to as the Issuer Identification Number (IIN). The BIN/IIN can be used to identify the card brand (Discover Mastercard, Visa), the card type (debit card, prepaid card or credit card) the issuer of the card (bank, credit union or entity), and the location of the issuer. The BIN attaches an issuer to all of the cards they have issued and all the transactions made with those cards.

Biometric Recognition Automated methods of identifying or verifying the identity of a person based on their unique biological and behavioral characteristics. This can include a fingerprint, iris scan, or a voiceprint. Behavioral characteristics such as shopping habits are often used to help prevent fraudulent transactions.

Blockchain A secured and decentralized digital ledger that records transactions on thousands of computers around the world in such a way that no registered transaction can be altered retroactively.

Card-present (CP) – Transactions where a cardholder physically interacts with a point-of-sale (POS) payment terminal using their card or device (e.g. smartphone, wearable) for payment. Examples include contactless payments, swiping or inserting a debit card.

Card-not-present (CNP) Transactions where a physical card or device is not read by a physical point-of-sale terminal. Typically, these are digital transactions in which no physical card is presented to the merchant for payment processing. Examples include transactions that occur via mobile app, web browser, mail or telephone.

Card-on-file (COF) – A primary-account-number (PAN) and associated card data are stored by a merchant or wallet provider, to whom the cardholder has given permission to save their credentials for potential future transactions. The PAN may or may not be tokenized. Examples of common COF examples include streaming service subscriptions, gym memberships and frequently used e-commerce merchants.

Clearing message – The second message in a dual message transaction that triggers the movement of funds. This is also knows as a financial advice transaction.

Contactless – Payment transactions that require no physical contact between the consumer payment device and the physical terminal. In a contactless payment transaction, the consumer holds the contactless card, device or mobile phone close to the terminal and the payment account information is communicated wirelessly via radio frequency near field communication (NFC).

Card Verification Value/Code (CVV/CVC) – A payment card protection technology that uses security values that are either printed on the back of cards, encoded on the magnetic stripe or encoded on the chip.

Debit card A card product that functions as an alternative to cash or checks, enabling the user to pay from a funded account, such as the user’s checking account.

Debit routing Debit routing refers to the ability of a merchant to route a debit card transaction to the merchant’s choice of available networks. In the U.S., debit routing is governed by the Durbin Amendment to the Dodd-Frank Act and Regulation II.

Digital wallet – General term that refers to the storage of cardholder payment card data digitally, either in mobile device wallets (like Apple Pay, Google Pay, Samsung Pay), merchant card-on-file wallets, secure remote commerce wallets (click-to-pay wallets offered by Discover, Visa, MasterCard, American Express and others).or in third party wallets (like PayPal, Venmo, etc.).

Dual message – A type of transaction that involves both an authorization request message, and if approved, a clearing or settlement message.

Durbin Amendment Part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 that directed the Federal Reserve to impose regulations on point-of-sale debit. This legislation mandated actions like debit issuers enabling their debit cards in at least two unaffiliated networks.

Electronic funds transfer (EFT) The movement of money between accounts at financial institutions via ACH, wire or debit rails.

Interchange fee A fee paid by a merchant acquirer to the issuing financial institution on a point-of-sale transaction, or by an issuing financial institution to the acquirer on an ATM transaction.  

Independent Sales Organization (ISO) An agent that solicits merchants and other parties with respect to deploying terminals such as ATMs and point-of-sale devices.  

Debit issuer An entity that provides the debit user a debit or prepaid card or, in the case of a virtual card, the debit card number.

Merchant acquirer An entity that enrolls merchants to accept card payments, provides related technology and services to the merchant and facilitates payment flow, such as payment to the merchant.

Merchant Identification Number (MID) – Unique identifier that identifies a merchant in the EFT universe.

Mobile proximity payments – Mobile payment transaction in which a consumer uses a mobile device to pay for their items at a physical point-of-sale terminal.

Mobile remote payments – Mobile payment transactions where a consumer uses a mobile device to make their purchase without interacting with the point-of-sale terminal. These are typically e-commerce payment transactions where a consumer uses their mobile device to initiate a payment through a merchant’s integrated website or app.

Near Field Communication (NFC) – A set of standards that enables proximity-based communication between consumer electronic devices. An NFC-enabled mobile device can communicate with a POS system that accepts contactless payment cards.

Payment network – An entity that provides point-of-sale and ATM services for credit, debit, ATM and prepaid card issuers and corresponding transaction acquirers. Payment networks often have participation requirements, operating rules and technical specifications for the purpose of receiving, routing, securing authorization for, settling and reporting domestic and international payment transactions.

Peer-to-peer/person-to-person (P2P) – Money movement transaction between two individuals. Venmo and Zelle are key players.

Primary account number (PAN) – The card identifier assigned by an issuer to a cardholder for payment services. The PAN associates the payment card with the cardholder’s checking or credit card account.

Payment credentials A generic term for the data that may be used to identify and authenticate a card through a payment network, typically including values such as the PAN and expiration date.

Payment Card Industry Data Security Standard (PCI DSS) A comprehensive set of security requirements applicable to all card-accepting merchants, designed to protect cardholder and account data. Learn more.

Phishing The fraudulent practice of sending emails, or other communications, purporting to be from reputable companies in order to induce individuals to reveal personal information, such as passwords or debit card numbers. This is sometimes done via voice (vishing) and SMS messages (smishing).

Point-of-sale (POS) The location or technology system where card payments for goods and services are initiated.

Prepaid card A debit-based card that is not tied to a traditional checking or savings account.

Processor Provider of back-office services on behalf of the merchant acquirer or issuer, including authorization of card transactions and data delivery.

Regulation II – see Durbin Amendment.

Settlement – The ultimate movement of monetary funds that are the result of an EFT or ACH transaction.

Single message – A type of transaction involving a single authorization request message where, if approved, will result in both a hold on the cardholders funds and the settlement of those funds by the end of the processing day. Can be associated with both PINless and PIN transactions.

Tokenized transaction – Payment transaction where the actual PAN is substituted with a token when the transaction is initiated. The token is replaced with the actual PAN either by the acquirer or payment network during the authorization process. By minimizing the exposure of the actual PAN, tokenized transactions are considered more secure that those using actual PANs.

Unaffiliated network – Payment networks enabled on a debit card that are unrelated to the front-of-card brand.

Virtual card A primary account number that is provided to a customer and is intended to be used when making digital transactions. This can be used against an account that may or may not have a separate physical debit card associated with it.

This list will continue to grow and we encourage you to share this resource with your colleagues. If you have areas of debit that you would like to learn more about, drop us a line and tell us what words we can add to our Debit Payments Glossary.


The terms and definitions used in this glossary are presented here for general conceptual understanding of such terms. Some of these terms may be used in the PULSE Operating Rules and Procedures and PULSE contracts and will have the meaning as defined therein.