Glossary



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3-D Secure™

A cardholder authentication and anti-fraud protocol developed by Visa and MasterCard to safeguard card payment transactions over the Internet. For the 3-D Secure™ to work, cardholders must sign up with their card issuing bank.

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AAV

See: Accountholder Authentication Value

Access Control Server

A component of the Issuer Domain. It authenticates a specific card number related to card transactions.

Accountholder

A person holding an account which is charged at a bank or financial instituion.

Accountholder Authentication Value (AAV)

A term used by MasterCard in its 3-D Secure™. authentication process (MasterCard Secure Code). The AAV proves that authentication took place. It is a unique 32-byte value that is generated by the issuer`s SPA server for each on-line transaction. It is passed to the merchant via the Universal Cardholder Authentication Field (UCAF) and through the CAVV field.

ACH

See: Automated Clearing House.

ACM

See: Account Management System.

Acquirer

See: Acquiring Bank, Merchant Bank. A bank or financial institution that is licensed as a Visa/MasterCard member and issues merchant accounts for the acceptance of credit card accounts. The aquirer receives funds from a cardholder when a credit card transaction is completed, and places them into the merchant`s business checking account.

Acquiring Bank

See Acquirer, Merchant Bank.

Acquiring Processor

A processor providing IT services (e.g. credit card processing, billing, reporting, settlement, and operational services) for an Acquirer.

ACS

See: Access Control Server.

Address Verification System / Service (AVS)

A payment-related risk check introduced by Visa/Master Card. It compares numerical components of a customer`s address (house number and ZIP-code / postal code) to the address registered at the credit card company. Only available in the United States and the UK.

Affiliate

A bank operating in the card business via a principal licensee.

All-in-One Solution

The concept of combining different integrations in one process.

Application Service Provider (ASP)

A third party organization that manages and distributes software-based services and solutions to customers across a wide area network from a central data center.

ASP

Application Service Provider

ATM

See: Automated Teller Machine.

Authorization / Preauthorization

Authorization of a credit card payment (reservation of an amount on the credit card).

Automated Clearing House (ACH)

The Automated Clearing House (ACH) Network is a US nationwide electronic payments system used by more than 20,000 participating financial institutions, over 3.5 million corporations, and 130 million consumers. ACH is a method of transferring funds between banks via the Federal Reserve System and is used as a synonym for electronic check processing in the USA.

Automated Teller Machine (ATM)

A money dispensing cash machine typically abbreviated to ATM. A cardholder withdraws funds from his bank account by inserting his plastic card into the machine and entering a PIN (Personal Identification Number).

AVS

See: Address Verification System / Service.

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B2B

Business to Business

B2C

Business to Customer

Backend

A “backend” application or program serves indirectly in support of the frontend services, usually by being closer to the required resource or having the capability to communicate with the required resource. The connection to a payment gateway over HTTPS or XML-Client Software is a backend integration,.

Bank Card

A plastic card issued by a bank for electronic payment.

Bank Deposit

The balance of funds held in a bank account or the act of placing funds in an account.

Bank Identification Number (BIN)

The first six digits of a credit card, debit card, or any charge card identifying the bank that issued the card.

Bank Identifier Code (BIC)

A standardized code used for cross border payments identifying a bank.

Bank Transfer

The electronic transfer of money between bank accounts.

Batch

A batch is an accumulation of separately executed payment transactions compiled and submitted for processing.

Batch Capture

A capture transaction performed in a batch run. A process that completes a transaction: The Issuing Bank credits the merchant`s bank account with the funds for the transaction and updates the cardholder`s statement.

Batch Envelope

An XML-based batch message element. Each batch consists of an envelope and individual transaction elements. The request message generates a corresponding XML response batch message with envelope and transaction elements.

Batch Processing

See also: Real-time Processing. A type of data processing where related transactions are combined and submitted for processing as a group, called `batch`. The Wire Card system takes a pre-defined Batch of data, processes it and returns the results to the merchant.

BIC

See: Bank Identifier Code.

BIN

See: Bank Identification Number (BIN)

Bookback

See also: Refund Transaction A proprietary term describing a refund of a previously settled credit card payment. The money is returned to the cardholder`s bank account via his credit card. It can only be used in reference to a successful sales or capture transaction. The amount of a bookback can only be less than or equal to the previously settled amount (see: settlement).

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Capture

Booking a previous authorized amount.

Card Issuer

A bank that issues payment cards and manages cardholder accounts, authorizes transactions and guarantees payment to the aquirerer. It receives the cardholder transaction request from merchants and debits the cardholder account.

Card Not Present Transaction

A transaction where the card is not physically presented to the merchant, as in the case of a Mail Order, Internet Order or Telephone Order. This type of transaction carries the highest interchange rate due to higher risk factors.

Card Present Transaction

A card transaction where the buyer physically hands over his credit card to the merchant to pay for the purchase (also known as face-to-face transaction). This type of transaction carries a low interchange rate since the buyer is present.

Cardholder Funds Transfer (CFT)

A procedure introduced by Visa which enables the merchant to deposit money directly on the credit card account of the customer.

Cash in Advance (CIA)

A payment method in which the buyer pays the seller for goods or services before the products are shipped or the services are rendered.

Cash on Delivery (COD)

Payment in cash when the delivery is received.

Chargeback

A procedure whereby a Card Issuer can claim back a transaction amount (in part or in full). It occurs when a cardholder disputes a credit card transaction with his or her credit card issuer. The card issuer contacts the Acquirer and initiates a chargeback against the Merchant Account.

Chargeback Period

The number of calendar days in which a member may charge sales back to the merchant, beginning with the day following the date the record is received by the member and ending with the day on which it is dispatched as a chargeback item.

Checking Account

A bank account used for handling payment transactions (crediting and debiting of funds).

Client

A program created for the encrypted transfer of XML data between the customer and a payment gateway server.

Credit

An arrangement between lender and borrower whereby the former lends money to the borrower who agrees to pay the debt with a finance charge.

Credit Card (CC)

A plastic card bearing a number, the name of the cardholder, an expiration date and a Verification Code/Value. Used for purchasing goods and services and for obtaining cash advances with regular billing and with/without extended credit.

Credit History

Publicly available information about past non-payments of the consumer provided by official sources. Additionally credit history providers usually have access to information about ongoing dunning and collection processes.

Credit Scoring

A process determing the credit worthiness of a consumer by calculating a score from negative payment history and socio-demographic factors of the consumer`s environment including age, profession or monthly income.

Credit Worthiness Check

See: Scoring

Creditor

The person/business that is owed money.

CVC2

Card verification code 2 (MasterCard)

CVD

Card verification data; a 3- or 4-digit number on the back of the credit card. This is queried as extra security.

CVV2

Card verification value 2 (Visa)

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Data Verification

The alignment of data with the data entries in an existing database and the selection of a data record.

Descriptor

A predefined text which appears on the credit card statement, explaining where or with which retailer the transaction took place.

Direct Debit (DD)

A type of Electronic Funds Transfer (EFT). A payment method whereby a checking account is debited directly.

Dispute Management

The objective is to reduce dispute potential, recognize dispute signals, identify disputes and resolve disputes between the relevant parties.

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EFT

Abbreviation for Electronic Funds Transfer, a technology that authorizes a bank or financial institution to debit or credit an account securely and instantaneously by electronic means.

Electronic Banking

A process by which a customer may perform banking transactions electronically without visiting a brick-and-mortar institution.

Electronic Funds Transfer (EFT)

A paperless transmission of data representing money in a certain currency by electronic terminal (computer, POS etc.). In choosing EFT, users authorize a financial institution to debit or credit an account. It replaces the sending of paper instruments (checks etc.).

Electronic Merchant / eMerchant

A merchant who runs his/her business electronically via the Internet.

Electronic Wallet

The electronic equivalent of a wallet for e-commerce transactions. It holds credit card data and passwords for logging into Web sites. The wallet data may reside in the user`s machine or on the servers of the wallet service. When stored in the client machine, the wallet may use a digital certificate that identifies the authorized card holder. Microsoft`s Passport, Yahoo! Wallet and Gator`s eWallet are examples of digital wallets.

Expert Service

A customer advisory service by experts with different specialties.

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Factoring

The purchase of debts, or account receivables in exchange for immediate payment at a discount. In Electronic Commerce, the term is often applied to independent service organizations that offer to process credit card transactions through their own Merchant Account rather than through an account established by the merchant, in exchange for a percentage of the transaction or other fee. Factoring of credit card debt is illegal.

File Transfer Protocol

The most common way to upload and download data over the Internet from a central server, also abbreviated to FTP.

Fraud Protection

All measures implemented for avoiding Fraud cases.

Frontend

A computer program with a user interface used for the interactive input or the display of data. It is connected with one or more programs that run in the background and take over the processing, administration, storing etc. of the entered data.

Funding / Fund Process

The transfer of a monetary value from the cardholder`s account to the electronic purse/issuer`s float account.

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Gateway

A device used to connect two computers or networks.

German ISO 8583 Credit Card Protocol (GICCProtocol)

A protocol for the authorization of credit card transactions at the POS (Point of Sale) which is based on ISO 8583. It has been developed by American Express, B+S Card Service, Citicorp and GZS. The protocol is used only in Germany.

Global System for Mobile Communication (GSM)

See also: Universal Mobile Telecommunications System (UMTS) The most popular standard for mobile phones in the world.

Graphical User Interface (GUI)

A program interface that makes a program easier to use. It takes advantage of visual elements (e.g. icons, windows) and allows the user to interact with the computer through direct manipulation of graphical images in addition to text. It frees the user from learning command languages.

GSM

See: Global System for Mobile Communication.

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Help Desk

A telephone service that provides information and assistance to users of an applications and processes.

Holdback

A fee held back from a merchant`s credit card transactions to cover any possible, and other disputed charges that a merchant may encounter. Usually, after some time, the holdbacks are returned to the merchant.

Host

Web hosts e.g. are companies that provide server space, Web services and file maintenance for Web sites as well as Internet connectivity.

HTML

See: HyperText Markup Language.

HTTP

See: HyperText Transfer Protocol.

HTTPS

See: HypertText Transfer Protocol over SSL.

HTTPS-Post

A data format used to send data over an SSL connection to a HTTPS server.

HyperText Markup Language (HTML)

A markup language designed for the creation of Web pages and other information viewable in a browser. It is used to structure information like denoting certain text as headings, paragraphs or lists.

HyperText Transfer Protocol (HTTP)

A request/response protocol in the World Wide Web that facilitates the transfer of hypertext-based files between local and remote systems.

HyperText Transfer Protocol over Secure Socket Layer / HTTP over SSL (HTTPS)

A Web protocol that encrypts and decrypts user page requests as well as the pages returned by the Web server. HTTPS is the use of the Secure Socket Layer (SSL) as a sublayer under the regular HTTP application layer. It is widely used for sending sensitive information like e.g. payment transactions over the Internet.

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IBAN

See: International Bank Account Number.

ID

A unique identifier (typically alphanumerical) allowing for an unmistakable identification of a user, transaction etc.

Interchange

A standard format for sharing or transferring data electronically between parties that do not share a common application.

International Bank Account Number (IBAN)

A number designating a bank account used internationally.

Internet Service Provider (ISP)

A business or organization that offers users access to the Internet and related services.

IP Address

The term stands for Internet Protocol Address and describes a binary unique number used in a network environment to identify and address connected devices (computers, servers etc.) when sending information across a network. By checking the IP address, network devices forwarding information on behalf of the sender know where to send the information, and network devices receiving the information that they are the intended destination.

IP Gateway

A device that converts data into Internet Protocol (IP) packets.

ISO

The International Organisation for Standardization.

ISP

See: Internet Service Provider

Issuer

See also: Card Issuer. A bank which issues cards, receives the transactions made by the cardholder with the issued card, from the, guarantees the payment and collects the respective amounts from the cardholders (debits the card holders bank account).

Issuing Bank

See: Card Issuer, Issuer

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Java

An object-oriented programming language developed initially by Sun Microsystems.

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KPN

Card check number (see also: CVD).

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Logfile

A file that lists actions that have occurred. Web servers e.g. maintain log files that list every request made to the server.

Login

The process of accessing a computer by identification of the user in order to get access.

LUHN

Test algorithm used for checking the authenticity of a credit card number.

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Maestro

A trademark and service mark of MasterCard`s debit card product range.

Maestro Card

A Debit Card issued by a licensee of Maestro International.

Mail Order

The buying of goods or services by mail.

Markup Language

Combines text and extra information like structure or presentation about the text. The best-known markup language in modern use is HyperText Markup Language (HTML)

Merchant

A retail business or any person or company entering into a contractual agreement with an acquirer to accept Visa or MasterCard.

Merchant Account

A bank account established by a merchant to receive the proceeds of credit card purchases. By establishing a merchant account, the merchant bank agrees to pay the merchant for valid credit card purchases in exchange for the right to collect on the debt owed by the consumer.

Merchant Bank

see also: Acquirer, Acquiring Bank. An organization/bank licensed as a member of Visa/MasterCard that provides merchant accounts to merchants, thereby allowing the merchants to accept credit cards. The bank receives funds from a cardholder when a credit card transaction is completed, and then places the payment amount into the merchant`s business checking account.

Merchant Identification Number (MID)

A unique number that identifies a merchant for reference purposes in transaction processes. It is provided by the Acquirer and is sometimes also called simply merchant number.

Merchant Service Provider (MSP)

See also: Factoring. A bank, or other company that provides services for processing financial transactions, usually credit card sales. Many MSPs provide merchant accounts, while others require their clients to establish merchant accounts on their own.

Micro-payment

A term used for designating payments amounting to less than approx. € 5.

MID

See: Merchant Identification Number

Money Order

An order to transfer money from one bank account to another.

MoTo

See also: Mail Order, Telephone Order. The buying of goods or services by mail or by telephone.

mPayment / Mobile Payment

See also: Point-of-Sale Terminal (POS Terminal). A point-of-sale payment made through a mobile device, such as a cellular telephone, a smartphone, or a personal digital assistant (PDA). Using mPayment, a person with a wireless device is able to pay for items in a store or settle a restaurant bill without interacting with any staff member.

MSP

See: Merchant Service Provider

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Non Face-To-Face Transaction

See: Card Not Present Transaction

Notification

A request for payment.

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Offline

A term used to indicate that a transaction is not processed in real time (See: Batch Processing).

Online

A term used to indicate that a transaction is processed in real time (usually within number of seconds).

Online Banking

Allows an account holder to obtain account information and manage transactions over the Internet.

Open Source

The term describes the practice of allowing general open access to software. This means that not only the software of an application is delivered in a fully functional version but also the underlying source code, which the user can then modify.

Outsourcing

Work performed in the value added chain of a company by people other than the company`s full-time employees.

Overdraft

The amount that is actually withdrawn in excess of the funds on a current account.

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PAN

See: Personal Account Number.

Payment Authorizing

Acknowledgement of a payment by PIN.

Payment Card

A card which can be used for paying goods and services without extended credit.

Payment Gateway

Network processing interface.

Payment Gateway Provider

A service provider that stores, processes, and/or transmits cardholder data for payment transactions.

Payment Service Provider (PSP)

Provides complex electronic payment services. He has the responsibility for the consumer and/or merchant contractual relationships, handles payment customer care, and is responsible for the profile management of his contractual relations. Thus, he carries out the authentication of the consumer and performs the online check of the accounts, handles the requests from merchants and/or consumers, checks the creditworthiness of the consumer, and initiates clearing.

Payment Solution

A special solution for the exchange of payment data between two or more parties (i.e. PSP and Merchant).

Perl

A general-purpose programming language originally developed for text manipulation. It is now used for a wide range of tasks including system administration, web development, network programming, GUI development, and more.

Personal Account Number (PAN)

The account number associated with a credit, debit or charge card. This is usually the same as the number on the card.

Personal Identification Number (PIN)

A numeric value that is used in certain systems to gain access, and authenticate the user. A PIN is a type of password.

PIN

See: Personal Identification Number

Plug-in

A computer program that interacts with another program to provide a specific function. Examples are plug-ins to display specific graphic formats, to play multimedia files, to encrypt/decrypt email or to filter images in graphic programs.

Point of Sale Terminal (POS Terminal)

See also: Card-present Transaction. An electronic device used by retail businesses to process card transactions. If the customer is present, they swipe or slide their card through the machine.

Portal

A website or service that offers a broad array of resources and services, such as eMail, forums, search engines, and online shopping malls. The first web portals were online services, such as AOL, that provided access to the Web, but by now most of the traditional search engines have transformed themselves into Web portals to attract and keep a larger audience.

POS Terminal

See: Poin of Sale Terminal

POST

POST stands for a HyperText Transfer Protocol (HTTP) request.

Presentment

See also: Re-presentment. A clearing record that an acquirer presents to an issuer through interchange, either initially (a first presentment) or after a chargeback (a re-presentment).

Processing

The clearing of a transaction by a computer.

Processor

A computer service provider that processes credit card transactions and settles funds to merchants.

PSP

See: Payment Service Provider

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Re-presentment

See also: Presentment A transaction initially charged back to the merchant bank as a financial liability by the card issuer because of a dispute or other problem which the merchant bank is able to address and resubmit (“re-present”) to the card issuer.

Real-time Processing

See also: Batch Processing. The instant (direct) processing of a card transaction at the time or immediately after the purchase has been made. Real-time is the preferred choice for Internet-based merchants.

Reconciliation

The process between Acquirer and Issuer confirming that the technical transaction data actually matches the debited and credited and funds.

Recurring Billing

See also: Recurring Payments, Recurring Transaction. A payment based on a cardholder`s written permission to make one or more charges to his card account for recurring goods or services at a future date.

Recurring Payments

See: Recurring Billing, Recurring Transaction. A payment based on a cardholder`s written permission to make one or more charges to his card account for recurring goods or services at a future date.

Recurring Period

Breaks down the duration of a subscription into smaller time units. These time units determine the number and the time of payments.

Recurring Transaction

See: Recurring Billing, Recurring Payments. A transaction mode used for regular payments (monthly fees, subscriptions etc.).

Refund Transaction

See also: Bookback. Like a bookback but without a reference to a previous transaction. No restriction on amounts.

Reports

Automatically generated reports of transactions, turnovers etc.

Retrieval Request

When the cardholder`s bank request retrieval of information. This is done in order to substantiate a chargeback claim made by a customer.

Reversal

A transaction from the merchant to the acquirer which reverses the amount (fully or partially) of a previous yet uncompleted transaction. If the full amount is reversed, the transaction I neutralized as long as it has not been processed by the acquirer (same day). Reversals do not appear on the cardholder`s statement.

Risk Management (RM)

Certain transaction data is checked in order to minimize the risk of fraud.

Risk only

A transaction for which ONLY a risk check is made.

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Scoring

A technique used to predict customer behaviour. In analyzing data selected from certain people, other people with the same attributes are defined as a group, thus determining payment behaviour and related risks of these people.

Secure Server

A secure server guarantees the secure transmission of encoded data like e.g. credit card data in online purchases and ensures that only a recipient with adequate authorization can read the data.

Settlement

The act by which transactions are sent to the processor for payment to the merchant. This procedure routes all captured transactions to the merchant`s acquiring bank for deposit.

Settlement Currency

The currency, in which a transaction payment is settled on an account.

SSL

A protocol developed by Netscape for transmitting private documents via the Internet. SSL uses a cryptographic system that uses two keys to encrypt data ? a public key known to everyone and a private or secret key known only to the recipient of the message. Internet browsers support SSL, and many Web sites use the protocol to obtain confidential user information, such as credit card numbers.

SSL Certificate

An SSL Certificate consists of a public and a private key. The public key is used to encrypt information and the private key is used to decrypt it. When a browser points to a secure domain, a secure socket layer handshake authenticates the server and the client and negotiates an encryption method and a unique session key. The established secure session guarantees message privacy (only the intended recipient can read it) and message integrity (cannot be modified in transit).

Storno

Cancellation of a transaction (see also reversal).

Swift Code (Society for World-wide Interbank Financial Telecommunication)

An 8- or 11-digit alphanumeric identifier that uniquely identifies a financial institution. Used in international wire transfers.

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TA

See: Transaction

TAN

See: Transaction Number

Tax Identification Number (TIN)

A number required by the IRS (federal agency that collects income taxes in the United States) when submitting a tax return. For individuals, this number is your Social Security Number (SSN), or for businesses this number is an Employer Identification Number (EIN).

TCP / IP

See: Transmission Control Protocol / Internet Protocol(TCP/IP)

Telephone Order

The buying of goods or services by telephone.

Timeout

An interruption caused by a program or device that has not received any input in a defined period of time. An ATM for example performs a time-out if the password is not entered quickly enough.

TIN

See: Tax Identification Number

Transaction (TA)

A business matter which leads to a transfer of funds from one party to another. One example of a transaction is the process that takes place when a cardholder makes a purchase with a credit card.

Transaction Currency

Currency in which a transaction is made.

Transaction Number (TAN)

A unique transaction ID generated by the merchant. This value will be returned by the IPF system to the merchant after the registration process was terminated. It serves as unique transaction identifier.

Transaction Processing

See also: Real Time Processing. A type of computer processing in which the computer responds immediately to user requests. Each request is considered to be a transaction. Automatic teller machines for banks are an example of transaction processing. The opposite of transaction processing is batch processing. Transaction processing requires interaction with a user, whereas batch processing can take place without a user being present.

Transmission Control Protocol / Internet Protocol (TCP/IP)

The standard protocol for the exchange of data over the Internet. TCP monitors the connection and the completeness of transmitted data. IP is responsible for addressing and accomplishing the transport of data.

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UMTS

See: Universal Mobile Telecommunications System (UMTS)

Unicode Transformation Format (UTF)

A method of converting Unicode characters.

Uniform Resource Locator (URL)

A standardized format for pointing to information stored on a Web server.

Universal Mobile Telecommunications System (UMTS)

A standardized broadband, packet-based system for the transmission of text, digitized voice, video, and multimedia. It is the planned standard for mobile users around the world and will replace the previous mobile communication via GSM.

UPA

United Payment GmbH.

URL

See: Uniform Resource Locator

UTF

See: Unicode Transformation Format

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VbV

Verified by VISA.

Virtual Terminal (VT)

An internet payment solution. Offered by companies such as United Payment (UPA). In open systems, an application service that (a) allow host terminals on a multi-user network to interact with other hosts regardless of terminal type and characteristics, (b) allows remote log-on by local-area-network managers for the purpose of management, (c) allows users to access information from another host processor for transaction processing, and (d) serves as a backup facility.

VT

See: Virtual Terminal.

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Wallet

See: Electronic Wallet.

Wire Transfer

An instruction for an electronic payment of funds between financial institutions.

Withdrawal

The act of taking out money or other capital.

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XML

Extensible Markup Language.

XML File

File that contains all transaction data. This file is passed on to the Wire Card server (request XML) via Client or HTTPS. The Wire Card Server sends back a response in XML format (response XML) using the same interface.



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