Glossary

When trying to find the right EFTPOS solution merchants are bombarded with industry phrases and jargon. The Smartpay glossary was designed to give merchants the tools and knowledge to navigate their way through any conversation and ask the right questions as well as understand the answers.

Definitions

Acquirer – Essentially refers to a bank. They acquire transactions for merchant’s, sort, separate and send them to the necessary bank to transfer the money and complete the transaction.

Charge back – This is when a bank removes / holds the funds of a disputed transaction. For example a merchant makes a sale of $20, one month later the customer disputes the transaction and claims the credit card was stolen. The bank will remove the $20 from the merchant’s account and apply a Charge back Fee.

Charge back Fee – Refers to a fee incurred by the merchant when there is a disputed transaction. This is usually charged at a premium.

EFTPOS – Electronic Funds Transfer at Point of Sale

EFTPOS Network – The network enables your terminal, the acquiring bank and the issuer (the bank that issued the card) to safely connect your EFTPOS machine with your bank.

EMC (Europay / MasterCard / Visa) – Refers to the method of authenticating credit or debit card payments using a security microchip, containing personal data embedded in the card.

Floor Limit – Refers to the total value of sales which the merchant is authorized to process through the EFTPOS terminal without requiring further approval from the merchant’s Bank.

Hardware Rental Fee – This refers to the amount charged each month to rent the EFTPOS terminal. Acting almost as insurance payments, this fee ensures an EFTPOS terminal will be fixed or replaced should the merchant ever have any trouble throughout the life of the contract.

Merchant Facility – Refers to the EFTPOS terminal or “Facility” provided to you by your bank to accept payments by cards.

Merchant ID – When you get a merchant account, you are issued a unique Merchant ID Number (MID) that identifies you to your processor and the banking institutions upstream which authorize transactions, and subsequently deposit money into your bank account.

Merchant Service Fee (MSF) – The Merchant Service Fee or MSF represents the cost incurred by a bank when a Merchant makes a transaction through an EFTPOS terminal. It is charged to the merchant per transaction by their Bank. It consists of two seperate figures;

  • Credit Card Service Fee – This is a calculated as a percentage of the total sales price. (E.G – 1% MSF incurred on a $200 sale = $2 in Credit Card Service Fees.)
  • Debit Card Service Fee – This is calculated as a dollar figure of the total sales price. (E.G – $0.25 MSF incurred on a $200 = $0.25 in Debit Card Service Fees.)

Minimum MSF – This represents an agreement between the merchant and the bank that if a merchant doesn’t incur a specific amount every month in fees then the bank is entitled to take that amount as a fee. This ensures the bank will always receive an agreed amount every month in fees.

Participation Fee – Some banks will charge merchants a Participation Fee, this is to cover the cost of administration functions over the last billing period.

PCI (Payment Card Industry) Compliance – Is required by every EFTPOS terminal in Australia and ensures a terminal is built to a specific set of security codes designed to protect customer and security information at the point of a transaction.

PIN – stands for Personal Identification Number, used at ATMs and at the Point of Sale for debit and credit cards.

POS – stands for Point of Sale and can refer to where the transaction / purchase occurs and to software that helps a merchant process the sale of their goods or services.

Refund Transaction Fee – A cost charged to the merchant whenever they transact a refund through their EFTPOS terminal. This is usually a premium figure much higher than the standard Debit Service Fee for a regular sale.

Short Term (Rental) – a service provided by Smartpay allows a merchant to rent a terminal for a short amount of time.

Terminal Identification (TID) – The Terminal Identification or TID is a unique number given to each individual terminal. A bank will use this number to identify specific terminals (especially if a merchant maintains multiple terminals in one site).

Never had EFTPOS before?

Learn how does it work, and is it right for your business.