Card processing glossary

The words on a processing statement, defined in plain English, with what each one means for what you pay.

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Basis points (bps): One basis point is one hundredth of a percentage point: 0.01%. 25 basis points is 0.25%.
Blended pricing: Any pricing that combines interchange, network fees and markup into one or a few published rates, so the parts are not visible.

Card account updater: A card network service that automatically updates stored card numbers and expiry dates when a customer's bank reissues their card.
Card network fees: Fees charged by Visa, Mastercard and the other card networks for using their networks, separate from interchange.
Chargeback: A card payment reversed by the cardholder's bank after the cardholder disputes it, for fraud, a missing product or a billing problem.

Effective rate: Your total processing fees divided by your total card volume for the same period: the one number that makes any two pricing setups comparable.

Flat-rate pricing: One fixed price for every card payment, such as 2.9% + 30¢, whatever the card type and real cost underneath.

Interchange: The fee the cardholder's bank (the issuer) charges on every card payment, set by Visa and Mastercard and paid through your processor.
Interchange-plus pricing: A pricing model where you pay the actual interchange and network fees on each payment, plus a fixed processor markup.
Interchange-plus-plus (IC++): A form of interchange-plus pricing that lists interchange and card network fees as two separate pass-through lines, plus the processor markup.

Level 2 data: Extra transaction data, such as the sales tax amount and a customer or purchase order code, sent with a business card payment.
Level 3 data: Line-item detail sent with a business card payment: item descriptions, quantities, unit prices, product codes, freight and duty.

Mastercard NABU fee: Mastercard's Network Access and Brand Usage fee: a small per-transaction network fee charged on Mastercard authorizations.
Merchant of record (MoR): The legal seller in a transaction: the company responsible for taking the payment, charging sales tax or VAT, handling refunds and answering chargebacks.

Network tokens: Replacement card numbers issued by Visa or Mastercard for a specific merchant, which stay valid when the physical card is reissued.

Payment facilitator (payfac): A company that onboards other businesses as sub-merchants under its own master merchant account, so they can take card payments without their own processor contract.
Processor markup: The part of a card fee that your processor keeps, on top of interchange and card network fees.

Rolling reserve: A share of each day's card sales that a processor holds back for a set period, as protection against future refunds and chargebacks.

Visa CEDP: Visa's Commercial Enhanced Data Program, launched in 2025, which sets the rules and fees for sending enhanced data on Visa commercial card payments.
Visa FANF: Visa's Fixed Acquirer Network Fee: a monthly network fee based on a merchant's category and size rather than on each transaction.
Visa VAMP: The Visa Acquirer Monitoring Program, which tracks merchants' fraud and dispute rates together and penalizes those above Visa's thresholds.