Prepaid Debit Card Glossary
Want to know what a prepaid debit card term means? You've come to the right place. Check out our glossary and get educated.
- Approval response :
- an approval response is an authorization that is received by a merchant when a transaction is approved. Full definition of: Approval response
- ATM Card :
- an "ATM card" is a type of payment card that offers a safe, convenient alternative to cash and checks. Full definition of: ATM Card
- Authorization :
- an "authorization" is the process of verifying with a prepaid card issuer that an account has sufficient funds available and is in good standing. Full definition of: Authorization
- Authorization Code :
- an "authorization code" is a numeric or alphanumeric code sent by a prepaid card issuer to a merchant terminal verifying that a sale has been authorized or approved. Full definition of: Authorization Code
- Authorization Holds :
- if you use a prepaid debit card to buy gas, rent a car or get a hotel room, you need to know what an "authorization hold" is. Full definition of: Authorization Holds
- Authorized User :
- an "Authorized User" of a prepaid debit card is a secondary cardholder. Some prepaid debit card issuers and programs allow you (as the primary cardholder) to obtain a secondary card for one or more"Authorized Users". Full definition of: Authorized User
- Automated Clearing House (ACH) :
- the term "automated clearing house" (or ACH) refers to an electronic clearing and settlement system for exchanging electronic credit and debit transactions among participating depository institutions Full definition of: Automated Clearing House (ACH)
- Automated Teller Machine (ATM) :
- find out what an "Automated Teller Machine" is and how they can be accessed by prepaid debit cards. Full definition of: Automated Teller Machine (ATM)
- Bank Holding Company :
- a "bank holding company" is a company that owns, or has a controlling interest in, one or more banks. In the United States, the U.S. Federal Reserve Board of Governors is responsible for regulating Bank Holding Companies. Full definition of: Bank Holding Company
- Bank Identification Number (BIN) :
- a "bank identification number" or "BIN" is the first 6-digits of an account number used by a prepaid debit card issuer to identify their institution. Full definition of: Bank Identification Number (BIN)
- Bank Secrecy Act :
- the "Bank Secrecy Act" is a U.S. Law that requires financial institutions to assist the U.S. Government in detecting and preventing money laundering. The full name of the Act is "The Bank Secrecy Act of 1970" (or "BSA"), and is available at: 31 U.S.C. 5311-5330 and implemented as rules at 31 C.F.R. 103. Full definition of: Bank Secrecy Act
- Card Verification Value (CVV) :
- a "Card Verification Value" (or "CVV") is an authentication number established by prepaid debit card companies to further efforts towards reducing fraud for internet transactions. Full definition of: Card Verification Value (CVV)
- Charity Gift Card :
- a "Charity Gift Card" is a gift card (or gift certificate, or virtual gift card) that is purchased by a "sender" or "purchaser" and given to a "recipient". The sender or purchaser of the charity gift card buys the gift card from a gift card issuer Full definition of: Charity Gift Card
- Closed Loop Prepaid Card :
- a "closed loop" prepaid card is a type of prepaid debit card that can only be used at certain merchant locations. Closed loop debit cards are also referred to as "store cards", and are different than "open loop" prepaid cards which can be used at many different merchant locations. Full definition of: Closed Loop Prepaid Card
- Debit Card :
- debit cards are a type of payment card that offers a safe, convenient alternative to cash and checks. Debit cards allow you to access your bank accounts anywhere by using an ATM. Full definition of: Debit Card
- Decoupled Debit :
- decoupled debit refers to a concept originated in approximately 2007, and refers to a debit payment card accepted by businesses as a network-issued debit card but where the funding for the purchase amount is acquired from the checking account of the consumer via ACH. Full definition of: Decoupled Debit
- Equal Credit Opportunity Act :
- the Equal Credit Opportunity Act is a U.S. law that requires that U.S. financial institutions and other creditors make credit equally available to all creditworthy customers without regard to race, color, religion, national origin, sex, marital status or age. Full definition of: Equal Credit Opportunity Act
- Fair Credit Reporting Act :
- the U.S. Fair Credit Reporting Act is a Federal Law that seeks to achieve fair, timely and accurate reporting of credit information. Full definition of: Fair Credit Reporting Act
- Gift Card Breakage :
- Gift Card Breakage is a term that refers to value on prepaid debit gift cards that have been sold but that was never redeemed or used by the cardholder. Revenue from breakage is almost entirely profit, since companies need not provide any goods or services for unredeemed gift cards. Full definition of: Gift Card Breakage
- Interchange fee :
- the interchange fee, also called the discount rate, is the sum paid by merchants to the credit card processor as a fee for accepting credit cards. The amount of the rate will vary, typically between 1 percent and 3 percent of the purchase amount, depending on the type of transaction. For example, the interchange fee [...] Full definition of: Interchange fee
- ISO (Independent Sales Organization) :
- an "ISO" (or, Independent Sales Organization) is an organization that represents a Bank or other financial institution and that is permitted to sell the services of the Bank. Full definition of: ISO (Independent Sales Organization)
- Issuer :
- wonder what the term "issuer" means? The "issuer" of a prepaid debit card (or teen card or gift card) is the financial institution that provides an account (and typically a piece of plastic, or debit card, to access the account) to a consumer. Full definition of: Issuer
- MasterCard Zero Liability Policy :
- if your prepaid debit card is a MasterCard prepaid debit card, you may enjoy some protections against unauthorized purchases made using your debit card (which is a good thing!). Full definition of: MasterCard Zero Liability Policy
- Merchant agreement :
- a merchant agreement is the written agreement between a merchant and a bank that contains their respective rights, duties and warranties, with respect to acceptance of the bank card and matters related to the bank card activity. Full definition of: Merchant agreement
- Network Branded Prepaid Cards :
- network branded prepaid debit cards are one type of prepaid debit card. Network branded cards carry the logo of a payment card network such as Visa, MasterCard, Discover or American Express. Full definition of: Network Branded Prepaid Cards
- Open Loop Prepaid Card :
- an "open loop" prepaid card is a type of prepaid debit card that can be used at multiple merchant locations (as opposed to "closed loop prepaid cards" that can only be used at certain merchants). An open loop debit card typically has a network brand on it, such as Visa, MasterCard, American Express or Discover. As a result, these cards are also referred to as "network branded prepaid debit cards". Full definition of: Open Loop Prepaid Card
- PIN Debit Transactions :
- when you read the cardholder terms and conditions for different prepaid debit card products (you do read them, don’t you?), you’ll see that there are two kinds of point of sale transactions you can use a prepaid debit card for: “signature debit” transactions, and “PIN debit” transactions. Full definition of: PIN Debit Transactions
- Posted Transactions :
- a term that frequently is used when reviewing the terms of a prepaid debit card is: "Posted Transactions". Here's what a "posted transaction" is (and why you should understand the term). Full definition of: Posted Transactions
- Prepaid Credit Card :
- "Prepaid credit card" is a term that sometimes is (wrongly) used to refer to a prepaid debit card. A "prepaid credit card" is also known as a "secured credit card" -- a card that extends minimal "credit" based on an amount of funds you deposit (as "security") into an account associated with the card. Full definition of: Prepaid Credit Card
- Rebate Card :
- a rebate card is a prepaid debit card that is issued by a manufacturer or retailer and loaded with funds associated with a product or service rebate. Full definition of: Rebate Card
- Reload :
- the term "reload" refers to the process of adding value or cash to a prepaid debit card account. Different prepaid cards have different ways of reloading value. Full definition of: Reload
- Reloadable Debit Card :
- a reloadable debit card is a prepaid debit card that can be reloaded with value after it is issued. Full definition of: Reloadable Debit Card
- Secured Credit Card :
- a "secured credit card" is a credit card used to build a good credit record for people with a damaged or poor credit score or for people with little or no credit history. Full definition of: Secured Credit Card
- Settlement bank :
- a settlement bank is an institution authorized to execute settlement on the credit card payment processing system on behalf of the member or the member’s bank. Full definition of: Settlement bank
- Signature Debit Transactions :
- when you read the cardholder terms and conditions for different prepaid debit card products (you do read them, don't you?), you'll see that there are two kinds of point of sale transactions you can use a prepaid debit card for: "signature debit" transactions, and "PIN debit" transactions. Full definition of: Signature Debit Transactions
- Smart Card :
- a smart card is a plastic card with an embedded computer chip that looks like a credit card. Smart cards may be used as stored value cards. Depending on the capacity of the integrated circuit, the smart card may hold limited information, or may have the ability to perform more complex computing functions. Full definition of: Smart Card
- Social Security Number :
- a "Social Security Number" is a unique nine-digit number issued to U.S. citizens, permanent residents, and temporary residents of the United States. The Social Security Number (also referred to as an "SSN") is issued to people in the United States by the Social Security Administration, and is used to identify people for tax and other purposes. It is frequently used as identification for purposes of opening bank accounts, including many prepaid debit card accounts. Full definition of: Social Security Number
- Stored Value Cards :
- Stored value cards are payment cards that store (or are able to access) value. Stored value cards may be disposable or reloadable. Prepaid debit cards, gift cards, and teen debit cards are examples of stored value cards. Full definition of: Stored Value Cards
- Universal Prepaid Debit Cards :
- learn what a "universal" prepaid debit card is, and the difference between a universal prepaid debit card and a closed loop debit card. Full definition of: Universal Prepaid Debit Cards
- Verified by Visa :
- "Verified by Visa" refers to a program operated by Visa which is a free, simple-to-use service that confirms your identity with an extra password when you make an online transaction using your prepaid debit Visa card. Full definition of: Verified by Visa
- Virtual Debit Card :
- a virtual debit card is a debit card that is issued (or usable) without a corresponding plastic card. The funds associated with the card can be accessed without use of a plastic card. Full definition of: Virtual Debit Card
- Zero Liability :
- visa's Zero Liability policy is a guarantee that you won’t be held responsible for fraudulent charges made with your prepaid debit Visa card or account information associated with your prepaid debit card account. Full definition of: Zero Liability
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