E-Commerce glossary

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Access Provider

A company that provides a service to access the Internet for its customers, usually via a modem using a dial-up connection or via a dedicated line.

Account Number

A unique sequence of numbers assigned to a cardholder account that identifies the issuer and type of financial transaction card.


A small program (usually written in Java or ActiveX) that is downloaded to perform a small task on a computer, such as a particular interactive web page function.


The process of identification of individuals and businesses using digital certificates.


The act of ensuring the cardholder has adequate funds available against his line of credit. A positive authorization results in an authorization code being generated, and those funds being set aside. The cardholder's available credit limit is reduced by the authorized amount.


B2B (Business to Business)

Electronic trade, exchange of goods and services or partnering between organizations (often over an extranet or e-marketplace). Current volumes of e-business activity are around 90 per cent B2B, with the remainder being accounted for by B2C e-commerce.

B2C (Business to Consumer)

Electronic trade (e-commerce), exchange of goods and services between businesses and end consumers (as opposed to B2B e-business between organizations alone) with the end consumer being the target market.


The amount of electronic data that can be transferred through an electronic connection in a given time. For modems connected by telephone to the Internet, the modem's "speed" represents the maximum possible bandwidth of the connection, such 56.6 Kps (kilobits per second). Competent Web site operators strive to keep the size of Web page files low to conserve bandwidth and speed downloading.


Short for 'Web Browser,' the tool (program) that allows users to surf the Web. The most popular Web browsers are Netscape Navigator and Microsoft Internet Explorer.

Business Day

Those days when most corporate and government offices are open for business, usually any day except Saturday, Sunday and legal holidays. The business day begins at 9:00 AM for a 24-hour period.



An area of computer memory (either held on a chip or else on a hard disk) that is used to temporally store data files in order to increase the speed of access to them.


The person to whom a financial transaction card is issued or an additional person authorized to use the card.

Certificate Authority

A third party company that issues digital certificates that confirms a company or individuals' identification. A digital certificate is a crucial part of secure ecommerce.


Where a transaction is debited against a merchant account in cases of refunds and fraud. Chargebacks usually attract a fee that is debited against the merchant.


A computer that requests and receives data over a network, including the Internet. The most common types of client on the Internet are computers running browsers or e-mail programs.


Where two companies identify a partnership between them through one company displaying their logos, color schemes etc on another companies application.

Commerce Server

A Web server that contains the software necessary for processing customer orders via the Web, including shopping cart programs, dynamic inventory databases, and online payment systems. Commerce servers are usually also secure servers.


Small text files stored on your computer when visiting a site that record preference for that particular site's usage. They make it possible to remind that site about you the next time you visit it. Cookies are also common in shopping cart applications in order to remember visitors as they move throughout product pages.

CRM (Customer Relationship Management)

The entire process of a pre-sales, sales and service relationship with a customer. Many software applications are now available that permit you to record this relationship from the time the clients asks their first question. Good CRM software is much more efficient than fragmented records as it can save time in tracking communications and transactions with a particular person.


The practice of digitally "scrambling" a message using a secret key or keys.


A term coined by the science-fiction novelist, William Gibson, in his fantasy novel, Neuromancer. Used to describe the 'world' of computers. Used as a reference to the 'Internet.'

Humanity's 'consensual hallucination' of the realm of pure information used for computer processing, communications and data representation. Cyberspace is a metaphor that helps people to cope with the inherent complexity of worldwide, hyperlinked, multimedia computer networking. Not to be confused with the technological infrastructures of computing and telecommunications networks, cyberspace is hence best understood as a mental land of shared ideas with the defining purpose of enabling human beings to conceptually and usefully get a grip on the pet ghosts in their machines.



A file or file system containing organized information and, most commonly, a filing and retrieval system for storing information. Most database software also includes tools for data analysis. Examples of database software include Oracle, Sybase, and MySQL.

DES (Data Encryption Standard)

A popular standard encryption scheme.

Digital Cash

Two main mechanisms in that "digital coins" can be downloaded to the user's PC from a participating bank, or the set up of a digital money account with a bank. Both (encrypted) forms of cash can be sent to merchants for payment.

Digital Certificate

Online identification that authenticates a consumer, merchant and a financial institution. Digital certificates are used to encrypt information exchanged in SET transactions. A certificate is a public key that has been digitally signed by a trusted authority (the financial institution) to identify the user of the public key.

Digital Signatures

An electronic signature, which cannot be forged. Instead it is generated from a computed digest of the text that is encrypted and sent with the text message. The recipient decrypts the signature and retrieves the digest from the received text. If the digests match, the message is authenticated and proved to be from the sender.

Digital Wallet

A consumer account set up to allow e-commerce transactions through a particular credit card processing system. Before the consumer can make a purchase, he or she must first establish an account with the credit card processor, who provides an ID and password. These can then be used to make purchases at any Web site that supports that transaction system.

DNS (Domain Name System)

A general-purpose data query service whose principal use is the lookup of host addresses based on host names. Important domains are .com (commercial), .edu (educational), .net (network), .gov (U.S. government), .mil (U.S. military) and .org (organization).


A designation for particular location on the Internet. A domain, for example "x-cart.com," contains files that make up the content of Web pages under that address. x-cart.com/intro.htm and x-cart.com/tutorial.htm are different Web pages located within the same domain. Domain names are associated with IP addresses.

Down Time

A period when all or part of a system or network is not available to end users due to failure or maintenance.


Copying a file from a Web resource to your computer.



Encompasses all forms of online electronic trading, taking in the more narrowly defined concept of consumer-based (B2C) "e-commerce", plus B2B electronic trading and process integration, as well as the technologies for process integration inside organizations.


The electronic equivalent of a paper check, an E-Check is a form of payment that deducts funds directly from your own standard checking account. eCheck services are usually managed by third party companies that interface with a number of different banks. An echeck provides a more fraud resistant option in terms of ecommerce transactions.

E-Commerce (Electronic Commerce)

The processing of economic transactions, such as buying and selling, through electronic communication. E-commerce often refers to transactions occurring on the Internet, such as credit card purchases at Web sites.

Electronic Point of Sale

A point-of-sale merchant with electronic equipment for pricing and recording transactions, but not necessarily incorporating functions for electronic funds transfer.

E-mail (Electronic Mail)

A system where a computer user can exchange messages with other computer users (or groups of users) via a communications network.


Process of transforming data into a type that prevents casual observers from deciphering. Data scrambling process automatically takes place in the terminal or computer before data is transmitted for security/anti fraud purposes.

Expiration Date

The date embossed on a bankcard, beyond which the card becomes invalid.


FAQ (Frequently Asked Questions)

A term that refers to a list of questions/answers provided by companies relating to software products, Web site, etc.

File Transfer

The copying of a file from one computer to another over a computer network.


Software/hardware used to prevent unauthorized access from a computer system or a computer network. It also connects a local network to the Internet and for security reasons only allows certain types of messages through.


A vector-based moving graphics format created by Macromedia for the publication of animations on the world-wide web. Flash (.swf) graphics files can be created in Macromedia's own Flash program, or else in software applications such as Adobe's LiveMotion or Corel's RAVE (real animated vector effects) package. Most web browsers still require a plug-in to be installed before they can play Flash animations.

FTP (File Transfer Protocol)

A set of standard codes for transferring files over the Internet. FTP is usually used for retrieving large files or files that cannot be displayed through a browser. Windows FTP and Fetch are examples of FTP software.



Computer that allows communications between networks one network with another. Used in ecommerce to act as an interface between a merchant and a bank; i.e, a Payment Gateway.



A portion of the revenue from a merchant's credit card transactions, held in reserve by the merchant account provider to cover possible disputed charges, chargeback fees, and other expenses. After a predetermined time, holdbacks are turned over to the merchant. Note: Merchant account providers almost never pay interest on holdbacks.

Home Page

The page where a user normally enters a Web site. Also contains the major hotlinks to various features/contents of the site.

Hosting Provider

A company that provides services for setting up, storage and functioning of Internet resources. Hosting plans from different providers vary in the disk space, included traffic and a range of technologies available for the site functionality.

HTML (Hypertext Mark-Up Language)

The language used to write pages for the World Wide Web. This language lets the text include codes that define fonts, layout, embedded graphics, and hypertext links.

HTTP (Hypertext Transfer Porotocol)

The way in which World Wide Web pages are transferred over the Internet.

HTTPS (Hypertext Transfer Protocol Secured)

A variant of HTTP that encrypts messages for security.


A hypertext connection that can take you to another document or another part of the same document. On the World Wide Web, hyperlinks appear as text or pictures that are highlighted. To follow a hyperlink, click the highlighted material.


A system of writing and displaying text that enables the text to be linked in multiple ways, be available at several levels of detail, and contain links to related documents.



A system by which all the computers in the world talk to each other.


A private version of the Internet that lets people within an organization exchange data using popular Internet tools, such as browsers.

IP Address (Internet Protocol Address)

A designation for a particular location on the Internet, such as "140.23.719.6." IP addresses are associated with domain names.

ISP (Internet Service Provider)

A firm that provides access to the Internet, including Web browsing and e-mail. ISPs often offer connections that can be accessed by dialing a telephone number through your computer's modem.



A programming language frequently used on Web sites. Some Java programs, or "applets" are downloaded from the Web server to the visitor's own computer, which then runs them. This distinguishes Java programs from other Web programming languages, such as PERL, that reside and run on the Web server (only the results are downloaded to the visitor's computer).


A world-wide web programming language that is similar to (if less powerful than) Java, save for the fact that JavaScript coding can be inserted directly into pages of HTML. JavaScript is typically used for interactive effects such as "roll-overs" on web pages (where buttons or other graphics change colour or otherwise when the mouse pointer is moved over them).


Magnetic Stripe

A stripe (on the bankcard) of magnetically encoded cardholder account information affixed to a plastic card.


A retailer, or any other person, firm, or corporation that, according to a Merchant Agreement, agrees to accept credit cards, debit cards, or both, when properly presented.

Merchant Account

A special account where money from credit card sales is first routed to and held before transfer to your own business account. This process is usually fully automated in ecommerce transactions. Money may be transferred into your standard business account in real-time or during various points in 24 hour period. A merchant account is a crucial part of ecommerce.

Merchant Fraud

The act of submitting sales drafts which are not the result of legitimate sales for the purpose of defrauding the services, the client bank, or individual cardholders. Fraud includes knowingly accepting lost, stolen, or counterfeit credit cards.


Very small charges, perhaps even less than a penny, processed through e-commerce systems. Until this time, e-commerce has been largely limited to purchases of $10 (U.S.) or more. With micropayments, however, e-commerce merchants can sell products for far lower prices, such as charging small fees for downloading documents or charging per click for online advertising. Micropayment systems are still largely experimental and not widely available.

MIDS (Merchant Identification Number)

Unique merchant identification number that is used in conjunction with all transactions.



Computers that are connected together.


Online Storefront

A Web site containing eCommerce software, available on a public network, such as the Internet, which offers goods and services for sale. An online storefront is the equivalent of a store or place of business that a customer would visit to purchase goods and services.


Refers to an applications suitability to be rapidly integrated into an existing system

Operating Rules

Rules and business practices meant to increase consistency and interoperability among the various financial service providers that will interact with each other and end-users. Examples of operating rules include: authorization procedures, settlement timing requirements, audit and accounting rules, and credit limits.


Payment System

A set of instructions and procedures used for the transfer of ownership and settlement of obligations arising from the exchange of goods and services.

Payment Threshold

The minimum accumulated commission an affiliate must earn to trigger payment from an affiliate program.

PDF File

A method for distributing formatted documents over the Internet. You need a special reader program called Acrobat, and you can get it at http://www.adobe.com

PIN (Personal Identification Number)

An alphanumeric or numeric code used to verify the identity of an individual attempting to use a credit card, debit card, or other account


A "software add-on" that can be linked into an existing software application in order to give it additional capabilities and enable them to perform additional custom operations.

Privacy Policy

A Web site's official statement on the type of information collected on a site, how the information will be used, how the person can access this data and the steps for having the data removed. A privacy statement also usually includes information regarding systems that are in place to protect the information of web site visitors.

Privacy Seal Programs

Independent organizations that verify if an online companies' Privacy Statement is verifiable and accurate.


An organization that is connected to VISANet and or Banknet and provides authorization and/or clearing and settlement services on behalf of a member.


The agreed-on rules that computers rely on to talk among themselves. A set of signals that mean 'go ahead,' 'got it,' 'didn't get it, please resend,' 'all done,' and so on.

Public Key

A method of encrypting electronic data. Developed to account for weaknesses in symmetric encryption, public key encryption does not require the transmission of decoding keys themselves.



The verification and processing of credit card transactions immediately following a purchase. Real-time verification on the Web usually takes less than five minutes. Real-time verification is especially important for Web sites that sell products and services that consumers expect immediately, such as memberships to the site or software downloads.

Recurring Fees

Regular, usually monthly, charges for maintaining a merchant account. Recurring fees include the discount rate, transaction fees, statement fee, and monthly minimum.

Recurring Transaction

A transaction charged to the cardholder (with prior permission) on a periodic basis for recurring goods and services, i.e., health club memberships, book-of-the-month clubs, etc.


The reimbursement of the purchase price of a service back to the credit card, for reasons such as faults in product qualities or dissatisfaction with the service provided.

Refund Policy

A written definition of rules concerning the return of payments to the company customer.



The ability and flexibility of an application to meet growing requirements of an organization

Secure Servers

Special servers that utilize encryption to prevent unauthorized users from intercepting and reading a message that passes through its system. Such Web servers are capable of establishing encrypted communication with clients, generally using SSL or SET.


A computer that provides a service to other computers (known as clients) on a network.

Session Cookie

Temporary cookie stored in a computer memory for remembering preferences during a web site visit that is flushed on leaving the site.

Setup Fees

Fees charged for establishing a merchant account, including application fees, software licensing fees, and equipment purchases.


Software that is distributed at no cost that can be used for free for a specific period of time or under certain circumstances to allow evaluation.A form of "try before you buy" software, it is usually distributed (either across the Internet or via magazine cover disks) for free with time-constrained (eg 30 day) functionality so that a user can install and appraise it before sending off a registration fee to the program author in exchange for unlimited use and documentation.

Shopping Cart

Shopping cart software allows the cardholder to select items from an online store and place them in a 'virtual shopping basket or shopping cart.' The shopping cart keeps track of items a visitor picks to buy from your site while the client views other items within the 'virtual storefront,' keeps a running total, and may calculate taxes and shipping. The items in the shopping cart are eventually ordered if the cardholder chooses.

SLA (Service Level Agreement)

Used in many merchant/institution and merchant/consumer transactions to define the boundaries of what the service is committed to deliver and under what circumstances.


Refers to junk e-mail, most usually received in the form of unsolicited advertisements. Alternatively, spam can also refer to excessive, unwanted and/or otherwise irrelevant newsgroup postings.

SSL (Secure Socket Layer)

A system for encrypting data sent over the Internet, including e-commerce transactions and passwords. With SSL, client and server computers exchange public keys, allowing them to encode and decode their communication. A secure protocol ensures the integrity of information that is transmitted via this means.



The system networks use to communicate with each other on the Internet. It stands for Transmission Control Protocol/Internet Protocol.

Third-Party Processing

Processing of transactions by service providers acting under contract to card issuers or acquirers.


Any event that causes a change in an organization's financial position or net worth, resulting from normal activity. Advance of funds, purchase of goods at a retailer or when a borrower activates a revolving line of credit. Activities affecting a deposit account carried out at the request of the account owner. One example of a transaction is the process that takes place when a cardholder makes a purchase with a credit card.

Transaction Date

The actual date on which a transaction occurs. Used in recording and tracking transactions.

Transaction Fee

A charge for each credit card transaction, collected by the merchant account provider or ISO.

Turn-key Application

Software that requires little or no modification when inserted into a Web site and with very few adjustments is ready for use. In e-commerce, many merchant account providers and ISOs offer turn-key applications for processing credit card orders online.



To transfer data/files from your computer to another computer.


The amount of time a web site is available. The industry benchmark at this point is 99.99%.

URL (Uniform Resource Locator)

An address for a file (or page) located on the Internet, usually the Web (e.g. www.x-cart.com).

User Session

Each visit to a web site by one person. The session is usually "ended" when all pages have been closed or after a specific time of inactivity.


Valid Date

The date embossed by the card issuer on the credit card. An establishment cannot accept a card for payment of goods or services prior to this date.


Web Server

A computer dedicated to storing the various files that make up Web pages and the protocols needed for communicating with other computers via the Internet.

WWW (World Wide Web)

A hypermedia system that lets you browse through an unlimited amount of interesting information.


What You See Is What You Get. An application that displays how the resulting page will look as it is being developed by the user in which the screen displays what the end result will look like, while the document is being created or modified.