Card Watch Glossary Page

Below is a list of definitions that will help you understand any terms on the Card Watch website that you may find confusing or unfamiliar.

. If you would like to see more Payment Industry terms please visit the APACS Glossary

3D-secure The technical standard developed by Visa and MasterCard to further secure card transactions over the internet. It allows the cardholder to be authenticated at the time of the transaction thus reducing the risk of fraud

Acquirer (merchant acquirer) A bank or other financial institution having a business relationship with merchants, retailers and other service provides to process their plastic card transactions. The acquirer handles/processes debit and credit card transactions received, reimbursing the merchant for the amount of the sale and levying a service charge/commission for the service.

Address Verification System (AVS) An automated system that allows merchants who accept card-not-present (CNP) transactions via the phone, mail order or the Internet to verify the billing address of cardholders.

Altered Card Genuine card’s magnetic stripe removed and replaced with fraudulently obtained card information.

APACS APACS, the UK payments association, is a trade association for institutions delivering payments services to end customers. It provides the forum to address co-operative aspects of payments and their development. It is also the main industry voice on issues such as plastic cards, card fraud, cheques, electronic payments and cash.

Application Fraud
Fraudsters use false details to apply for Money Transmission Facilities, Loans or Credit Cards. Applications to open accounts are screened using various scoring products before confirming the account meets minimum criteria and can be opened. Account Opening is now an FSA regulated product and must meet strict identification requirements (KYC). Fraudulent applications are identified during this process. Various 'shared' databases are available to search for suspect applications; two of the most common are 'Hunter' and 'Detect'.

Authorisation The process whereby a merchant requests permission for the card to be used for a particular transaction amount.

Automated Teller Machine (ATM) Also known as a cash machine, cash dispenser or hole-in-the-wall machine. A computerised self-service device permitting the holder of an appropriate card and personal identification number (PIN) to withdraw cash from their account and access other banking services.

Bank or Base Identification Number – BIN The magnetic stripe on a card will also contain the valid BIN in the first 4 / 6 digits, for a retailer’s terminal to accept such a card.

Biometrics Biometric methods of identification work by measuring unique human characteristics as a way to confirm identity, for example, finger or iris scanning or dynamic signature verification.

Card Authentication Method (CAM) The means by which a plastic card is determined genuine and not counterfeit. An example of one such feature is the hologram.

Card issuer A bank or building society issuing payment cards, ATM cards or cheque guarantee cards to its customers. For payment and ATM-only cards, the card issuer undertakes responsibility to settle transactions made with the card (except in some cases where fraud is present).

Card scheme(s)
Card schemes set the business rules that govern the issue of the payment cards that carry their logo. Typically, these rules apply throughout the world to ensure interoperability of cards. In many countries, domestic schemes also operate. The schemes operate the clearing and settlement of payment card transactions. In the UK, banks and building societies must be members of the appropriate scheme to issue cards and acquire card transactions. Examples of international card schemes in the UK are Visa, MasterCard, American Express and Diners Club.

Card Security Code (CSC) The last three or four digits of a number printed on or just below the signature panel on the back of payment cards. The number is used to help confirm that a card number that has been provided is genuine.

Cardholder Verification Method (CVM) The means by which the presenter of the card may be identified as genuine.

Card-not-present (CNP) A transaction where the merchant, retailer or other service provider does not have physical access to the payment card. Examples include transactions over the Internet, telephone, fax or by mail order.

Card-remotely-present
A transaction where the merchant, retailer or other service provider does not have physical access to the payment card, but where the card is inserted in a device by the customer and the card details are verified by an electronic process. Examples are transactions at unattended payment terminals, by telephones equipped with card readers, or via the Internet when a card reader is in use.

Cash machine/cash dispenser See Automated Teller Machine (ATM).

Charge card A payment card, enabling holders to make purchases and to draw cash to a pre-arranged ceiling, the terms of which include the obligation to settle the account in full at the end of a specified period. Cardholders are normally charged an annual fee.

Chargeback Transactions returned by an issuer to the acquirer because they have been disputed by the cardholder and/or found to be improper by the issuer.

Cheque guarantee card
Also known as a cheque card. A card issued by a bank or building society for the purpose of guaranteeing payment by, or supporting the encashment of, a cheque up to a specified value (£50, £100, £250). All cheque guarantee cards in the UK Domestic Cheque Guarantee Card Scheme depict the bust of William Shakespeare in either the cheque guarantee hologram or logo on the card.

Chip and PIN card
A payment card containing a chip that requires the use of a PIN as the preferred method of cardholder verification at the point-of-sale (not only at ATMs). In this context, 'preferred' relates to the cardholder authentication process demanded by the combination of card and terminal that, in the case of chip and PIN card inserted in a chip and PIN-enabled terminal, requires customers to enter their 4-digit PIN at the point-of-sale.

Chip card Also known as an integrated circuit card (ICC) or smart card. A chip card holds details on a secure computer chip that can store and process information; chip cards usually also have a magnetic stripe.

CIFAS - The UK's Fraud Prevention Service
CIFAS is a system for preventing fraud. It allows member organisations to exchange details of applications for products or services that are believed to be fraudulent, because the information provided by the applicant fails verification checks. Members can also exchange information about accounts that are suspected of being fraudulently misused or insurance claims that are suspected of being made fraudulently. This exchange of information is referred to in a notification clause on application forms and agreements.

Cirrus A MasterCard brand enabling a cardholder to obtain cash at an ATM.

Code 10 A Code 10 call is made by a point-of-sale retailer, through a retailer's acquirer authorisation centre, when the retailer is suspicious of a card, a cardholder, the circumstances of the transaction or when the retailer has been instructed to make such calls as part of a tactical fraud prevention measure.

Compromised Card Any type of physical card captured with a potential to be used for fraudulent purposes, generally having been reprogrammed with genuine card details; e.g: - Counterfeit / skimmed - Lost / stolen - Intercepted - Issued as a result of account take-over / application fraud

Convenience Refers to the location of ATMs in so-called convenience stores, comprising newsagents, corner shops, off licenses, open-all-hours general stores.

Counterfeit card (cloned/skimmed)
- A device or instrument that has been printed, embossed or encoded so as to purport to be a legitimate card but which is not genuine because the Issuer did not authorise the printing, embossing or encoding.
- An instrument that has been printed with the authority of the issuer and which has been subsequently embossed or encoded without the authority of the Issuer.
- A card that has been validly issued and which has been altered or refabricated.

Counterfeiting Counterfeiting involves the fraudulent reproduction of original documents/ instruments in a manner that enables the fraudster to pass them off as genuine/ original items. Most common items counterfeited include: - Cheques – an increasing problem on both corporate/ business and personal accounts - Plastic cards - Bankers Drafts

Counterfiet Cheques/ Bank Drafts
Cheques/ drafts are manufactured/ printed/ copied onto non-cheque paper but usually drawn on accounts held by the bank and presented for payment via the clearing system/ special presentation/ over the counter etc.

Printing is to a very high standard that is virtually identical to the originals in all respects. Ever more sophisticated they now include quality designs, UV security features and ostensibly watermarked paper.

Credit card A payment card enabling the holder to make purchases and to draw cash up to a pre-arranged ceiling. The credit granted can be settled in full by the end of a specified period or can be settled in part, in which case interest is charged. In the case of cash withdrawals, interest is normally charged from the transaction date. Cardholders may be charged an annual fee.

Crime Reference Number – CRN The number provided by a Police Station accepting a report of fraud from a customer/ bank/ other financial institution that is required to trace the case/ report when communicating with the police at any future time after the initial report.

Cross-border Fraud Fraud perpetrated on a plastic card, or using a card number, in a country other than the country of issue.

Debit card A payment card linked to a bank or building society account, used to pay for goods and services by debiting the holder's account; usually also combined with other facilities such as cash machine and cheque guarantee functions.

Domestic Cheque Guarantee Card Scheme A UK scheme whose members issue cheque guarantee cards to personal customers to guarantee the holder's cheques up to a specified amount, and providing common, easily identifiable design features to simplify acceptance procedures at point-of-sale.

Electron A Visa debit card. All Electron purchases are subject to electronic authorisation.

Electronic banking A service enabling users to access banking facilities over the Internet or other computer network. Also known as e-banking and, when the Internet is used, Internet banking (see also remote banking).

Electronic commerce (e-commerce) Transactions that are conducted over an electronic network where the buyer and merchant are not at the same physical location, e.g. plastic card transactions via the Internet.

Electronic Point of Sale - EPOS A terminal or similar device that may be used at the point of sale; e.g. shop, bank etc.

Electronic purse (e-purse) Also known as an e-purse. A stored-value payment card used to pay for goods and services. It is an alternative to cash. The card can be disposable or re-loadable. The stored value is reduced as payments are made.

EMV The internationally-agreed standards for chip payment cards, originally agreed by Europay, MasterCard and Visa. EMV standards are maintained by EMVCo, an organisation owned and managed by MasterCard, Visa and JCB.

Encryption A method of making information secret, so that only a person who knows the necessary key or password can understand or decrypt the information.

Europay MasterCard and Visa (EMV) The internationally-agreed standard for chip payment cards, originally agreed by Europay, MasterCard and Visa. EMV standards are maintained by EMVCo, an organisation owned and managed by MasterCard, Visa and JCB.

Floor limit A limit on the value of each transaction, agreed between the merchant and acquiring bank, above which authorisation must be obtained by the merchant, from the card issuer.

Fraud Intelligence Bureau (FIB)
Located at APACS, it is the UK banking industry’s rapid response group and leading centre for exchange of information and intelligence between police and banks. It gathers intelligence on plastic card fraud, particularly that relating to counterfeit, on behalf of APACS members and shares data, information; advice and tip-offs with the Police to combat organised crime.

Identity Theft / Fraud
This occurs when someone uses your personal information such as your name, social security number, credit card number, or other identifying information without your permission, to commit fraud or other crimes.
It commonly arises from the interception of mail, by being ‘socially engineered’, or even having your bin raided.
It may also be illustrated through the impersonation of the dead; using the identity of deceased of which information is freely available via graveyards, obituaries in daily / local newspapers or from the public records of births, marriages and deaths.

Independent ATM deployer (IAD) Any institution, other than a bank or building society, owning and installing ATMs. In some card industry publications and other media these institutions are sometimes referred to as ISOs, an acronym that is derived from both independent service operators and independent sales organisations.

Industry Hot Card File (IHCF) A computerised list of reported lost and stolen cards available to merchants to assist in the identification and prevention of fraudulent transactions.

Integrated circuit card (ICC) See chip card.

Intelligent detection systems Computer systems used by the banking industry to help identify fraudulent card use before the loss is reported. Also known as knowledge-based systems and neural networks.

Internet order Transaction conducted over the Internet with a merchant selling goods or services.

Issuer A bank or building society issuing payment cards, ATM / cash machine cards or cheque guarantee cards to its customers. For payment cards, the card issuer undertakes responsibility to settle transactions made with the card (except in some cases where fraud is present).

Liability The obligation to pay an amount owing. In the case of card fraud liability is used to refer to the party that is responsible for covering or absorbing the amount defrauded in respect of a cardholder dispute.

Maestro A MasterCard debit card scheme enabling cardholders to make payments to participating merchants in the scheme (typically at retailers' point-of-sale terminals).

Maestro A MasterCard debit card scheme enabling cardholders to make payments to participating merchants in the scheme.

Magnetic stripe The stripe that currently appears on the back of all payment cards issued by financial institutions. It contains essential customer and account information, most of which is usually also embossed on the card.

Mail Order A CNP transaction in which an order form is filled in by a customer, including payment details, and mailed to the merchant that is selling goods or services.

MasterCard An international card scheme.

MasterCard SecureCode The MasterCard brand name for their service that uses the 3D Secure standard.

Merchant Any person, firm or corporation that has contracted with an acquirer to process transactions.

MO/TO An acronym for mail order/telephone order that refers to card-not-present transactions.

Payment card A generic term for any plastic card (credit, debit, charge etc.) used on its own to pay for goods and services.

Personal Identification Number (PIN) A set of numeric characters, usually a four-digit sequence, used by a cardholder to verify their identity at a point-of-sale (POS) or by a customer activated device, such as a cash machine. The number is generated by the card issuer when the card is first issued and may be changed by the cardholder thereafter.

Phishing
Phishing is the name given to the practice of sending e-mails at random purporting to come from a genuine company operating on the Internet, in an attempt to trick customers of that company into disclosing information at a bogus website operated by fraudsters. These e-mails usually claim that it is necessary to "update" or "verify" your customer account information and they urge people to click on a link from the e-mail which takes them to the bogus website. Any information entered on the bogus website will be captured by the criminals for their own fraudulent purposes.

PIN Pad The numeric pad into which a cardholder enters their PIN to authorise a transaction. PIN pads may be fixed or portable.

Point-of-sale (POS) A physical location, such as a check-out, till or sale point, where a customer makes a purchase.

POS terminal An electronic device used to process card payments at point-of-sale.

POS transaction A transaction that takes place at point-of-sale.

Shoulder Surfing A method employed by fraudsters to obtain PIN details by standing in the vicinity of the cardholder whilst they use the ATM and covertly observing them tap in the details.

Skimming Copying the magnetic stripe details of a plastic card with a card reader, for use in counterfeiting.

Smart card See chip card.

Switch A UK debit card scheme rebranded as Maestro with effect from 1 July 2004.

Telephone order Transaction completed over the phone to a merchant selling goods and services.

Verified by Visa The Visa brand name for their service that uses the 3D Secure standard.

Visa An international card scheme.

Visa Debit A debit card scheme enabling cardholders to make payments to participating merchants in the scheme (typically at retailers' point-of-sale terminals).

March 2010 New Card & Banking Fraud Figures - click here to see the release

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