Appendix A: Internet Glossary and Abbreviations

The Internet has spawned its own vocabulary, mostly consisting of acronyms. Every new technology develops its own jargon. For the uninitiated, NetSpeak can be somewhat intimidating. Throughout this book, I tried to make my explanations as user-friendly as possible. From time to time, however, some Internet terms are included.

This glossary defines those terms and some others you might come across as you explore the exciting commercial opportunities available on the Internet. The interested reader is directed to other texts for more detailed information about the terms presented here, and for more information about other terms not included.

ABA routing number: American Banking Association (ABA) routing number; a unique, bank-identifying number that directs electronic ACH deposits to the proper bank. This number precedes the account number printed at the bottom of a check and is usually printed with magnetic ink.
account number: A unique sequence of numbers assigned to a cardholder account that identifies the issuer and type of financial transaction card.
acquirer: A licensed MasterCard member who has an agreement to process the data relating to a transaction from the merchant.
acquiring bank: The bank that maintains the merchant relationship and receives all transactions from the merchant.
address verification service: A service that verifies the cardholder’s billing address in order to help combat fraud in card-not-present transactions (mail order, telephone order, Internet, and so forth). Used only in the United States.
agent: A system acting on some other system’s or individual’s behalf. Agents can be used to do comparison shopping, for example.
agent bank: A bank that participates in another bank’s acquiring program, usually by turning over its applicants for bank cards to the bank administering the bank acquiring program.
American Express: An organization that issues cards and acquires transactions, unlike Visa and MasterCard, which are bank associations.
anonymous ftp: An implementation of the file transfer protocol software that allows users to access files without having accounts on the ftp server.
API: Application Programming Interface; a set of standard routines used to make standard functions available to custom-designed programs.
application: A program providing some network function to end users or systems.
Application layer: The top layer in the standard Internet Protocol network architecture conceptual model. This is the level at which interaction takes place between the end user and the application.
approval: Any transaction that is approved by the cardholder or check writer’s bank. Approvals are requested via an authorization. An approval is the opposite of a declined transaction.
arbitration: The procedure used to determine the responsibility for a chargeback-related dispute between two members.
ARPAnet: Advanced Research Projects Agency Network; originally started by the U.S. Department of Defense, also known initially as DarpaNet. These were the predecessors to the Internet.
ASCII: American Standard Code for Information Interchange; refers to the “standard” alphanumeric character set.
asymmetric cryptography: See public key cryptography.
asynchronous: A method of transmitting data in which the data elements are identified with special start and stop characters. An asynchronous modem cannot communicate with a synchronous modem. Compare with synchronous (standard Hayes compatible modem).
AUP: Acceptable use policy; a policy of permitting only noncommercial uses for traffic carried by an Internet Service Provider subsidized by the U.S. government.
Auth Only: A transaction in which the merchant does not intend to capture funds until a later time, if at all.
authorization: A request to charge a cardholder. It reduces the cardholder’s open-to-buy but does not actually capture the funds. An authorization is the first transaction in the delayed settlement process. It does not bill the card until a delayed capture transaction is issued. The authorization must be settled in order to charge the account. If it is not used within a certain time period, it will drop off. The issuing bank determines the time period for drop-off. Authorizations can only be used for credit card transactions.
authorization code: A numeric or alphanumeric authorization code that references the approved sale and authorization transactions for processing purposes.
automated clearing house: A nationwide, wholesale electronic payment and collection system. It is a method of transferring funds between banks via the Federal Reserve System. It is used by most, but not all, financial institutions.
average ticket: The average dollar amount of merchant credit transactions.