Merchant Account Glossary Series:
(Terms and Definitions)

ACH (automated clearinghouse)

This is a form of electronic payment. ACH is designed to be an "electronic check." It is generally used to process a high volume of relatively low-dollar payments.

Settlement occurs within one or two business days.

networks that use this ACH network settle and clear electronic debit transactions through an automated clearinghouse.

Acquiring Bank (Acquirer)

Every merchant account must be sponsored by a bank that is a member of the card associations (Visa & MasterCard). They are responsible for depositing the funds into your checking account.

Approval Code or Authorization Code

This code is generated for the merchant upon approving a transaction. It is the unique identifier of the transaction in case it needs to be referred to again in the future.

Authorization

An authorization is a request to charge a credit card holder. An authorization does not actually capture any funds.

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