Top 8 Payment Processing Acronyms
Alison Arthur ● April 6, 2021 ● 3 min read
Payment processing has its own vocabulary and acronyms play a big role. Here are eight commonly used payment processing acronyms to help guide you through the jargon without the confusion.
1. MCC – Merchant Category Code
The Merchant Category Code is a four-digit number assigned by the card brands (Visa, Mastercard, American Express, Discover) that describes the type of businesses accepting card payments. For example, both Visa and Mastercard assign MCC 5251 to Hardware Stores. In the case of large companies like airlines, a singular business may have its own MCC.
MCCs also help calculate interchange fees, determine credit card rewards, and assist in tax reporting.
2. MID – Merchant Identification Number
A business’s MID is assigned by its payment processor. It’s a unique number that identifies them to all parties in the payments chain, from card issuers to acquiring banks, to facilitate the flow of information and funds.
3. EMV – Europay, Mastercard, and Visa
EMV refers to chip card technology now used widely in card payments. Card account information has historically been stored in a magnetic stripe that is swiped to transfer information and complete card payments. Now, cards outfitted with chips are dipped into a reader and a dynamic token is assigned to each transaction. The widespread use of chip cards increased the security of card transactions because it’s virtually impossible to create counterfeit EMV cards.
4. BIN – Bank Identification Number
The BIN is the first 4 to 6 digits of a payment card number that identifies the institution that issued the card. It also identifies the card brand, card type (credit card, debit card, prepaid card, etc.), and the geographic location where the card was issued. For example, card numbers starting with the digit 4 are identified as a Visa cards.
5. IIN – Issuer Identification Number
Plot twist: payment cards are no longer issued exclusively by banks. The acronym IIN is now used interchangeably with BIN to widen the scope beyond banks.
6. CNP – Card-Not-Present
A transaction where the physical payment card cannot be captured by a card reader. Payments made via e-commerce, phone, or mail are all CNP transactions. Because the card is not authenticated face-to-face, CNP transactions are deemed riskier by the card brands and subject to higher interchange fees. They also utilize techniques like AVS and CSC to help deter fraud.
7. AVS – Address Verification Service
AVS is often used in CNP transactions as an added security technique to authenticate the user. It compares the billing address provided during the transaction to the billing address the card issuer has on file. The two are compared and a full match, partial match, or no match is returned. Businesses can then use this data to determine whether to approve the transaction.
8. CSC – Card Security Code
The CSC is a three- or four-digit number found on either the front or the back of a physical payment card to authenticate CNP transactions. It’s also referred to as CVV (card verification value), CID (card identification code), and CVD (card verification data).
If you need help navigating the sometimes-confusing world of payments, Paystri can help guide you through it. Get in touch to learn more.