glossary

Glossary of Terminology

ABA Routing Number - The nine-digit number (eight digits and a check verification digit) that identifies a specific financial institution. Also referred to as a Bank Routing Number or Routing Transit Number.

Account Mask Information – Editing criteria used to verify the accuracy of a seller's account number in certain electronic payment transactions.

Accounts Payable (A/P) – Accounting term that reflects the amount owed by a Buyer to all of its Sellers.

Accounts Receivable (A/R) – Accounting term that reflects the amount due to a Seller from all of its Buyers/Customers.

ACH - Automated Clearing House – Funds transfer system governed by NACHA Operating Rules, which provides for interbank clearing of electronic entries for participating financial institutions.

ACH Operator – The central clearing facility operated by a private organization or the Federal Reserve Bank on behalf of financial institutions, to or from which participating financial institutions transmit or receive ACH entries.

Activation - The process where a Customer selects a Biller account for bill presentment and/or payment, agrees to Biller terms and conditions, and establishes the account within the Biller's and the CSP's systems.

Addenda Record – An electronic record, which is attached to an ACH payment entry, used for the purpose of transmitting payment related information.

Agent - An individual or business, other than the Customer or Biller, that receives and originates bills or notices on behalf of the Customer or Biller.

Aggregators - Service bureaus that provide bill presentment and/or payment consolidation services.

ANSI X9.17 – Standards for authentication and key management. These standards are maintained by the American National Standards Institute and can be found at the Computer Security Resource Center (www.csrc.nist.gov).

ANSI X12 - Standards that regulate electronic data interchange (EDI) as governed by the American National Standards Institute Accredited Standards Committee.

API - Application Programming Interface - A set of specifications, standards, or conventions that enable programs to exchange information.

ASP - Application Service Provider - Third party vendor used by a seller to outsource the presentment of electronic invoices.

ASP - Hosted Systems - Third party Application Service P rovider providing front end, data center or transaction processing capabilities for either a buyer or seller.

Authentication - A reliable process that determines the identity of a party.

Authorization – An agreement between a Receiver and Originator that allows the Originator to initiate debits and/or credits to a Receivers account.

B2B - Business to Business.

B2C - Business to Consumer.

Bank Ledger Day – The point at which a bank closes out the current day's transactions, and begins the next business day.

Bank Routing Number - The number uniquely identifying a bank for payment processing. Also referred to as an ABA Number or Routing Transit Number.

Batch - The transmission or processing of a group of payment orders as a set at discrete intervals of time (as opposed to real-time processing).

Bill Consolidator - A Bill Service Provider that consolidates bills from other Bill Service Providers or Billers and delivers them for presentment to the Customer Service Provider

Bill Detail - Information from a Biller that provides line level information to a customer. This may include specific billing event information such as credit card charges, telephone calls, or kilowatts used. Also: Invoice Detail.

Bill Notification - A process whereby a Customer is notified that an electronic bill is available for review and payment.

Bill Summary - The summary information from a Biller that is essential to a Customer to understand what is owed. Typical information may include; Amount Owed, Date Due, Biller, Biller's Account Number. Also: Summary Record, Summary, Invoice Summary,

Invoice Summary Record, Bill Summary Record.

Bill/Invoice - An electronic or paper document sent to a customer associated with a payment due.

Biller - A company or organization that sends a Bill, Invoice, or Statement, usually a request for payment for a product or service, to a Customer.

Biller Payment Provider (BPP) - An agent of the Biller that accepts remittance information on behalf of the Biller.

Biller Service Provider (BSP) - An agent of the Biller that provides an EBPP service for the Biller.

Blocks – See Debit Block.

Browser - Software program that is used to look at various kinds of Internet resources.

Buyer – A business customer, or payer.

Buyer Direct - EIPP model connecting one buyer to many sellers. Sellers post their invoice data to the buyer's site.

CCD - Cash Concentration/Disbursement - ACH format for corporate payments which can include one optional addenda record (CCD+).

CEBP – NACHA's Council for Electronic Billing and Payment.

Check - A paper negotiable instrument payable upon demand to transfer funds from the payer to the payee.

Check & List - Multiple payments on one list with a single check attached for the total- no scannable remittance document attached.

Clearing – The process of collecting paper or electronic items from the drawee bank after a deposit by a consumer.

Clearing House – An association of depository institutions that facilitates the clearing and settlement of checks or electronic items through the direct exchange of funds between members.

Commercial Relationship - An agreement between parties to do business together for the purpose of EBPP/EIPP. It may or may not include a contract.

Commercially Reasonable Time Frame - A period of time generally considered acceptable for a process within a given industry, taking into consideration the circumstances of the parties to the transaction.

Consolidator - A Biller Service Provider that consolidates bills from multiple Billers or other Bill Service Providers (BSPs) and delivers them for presentment to the Customer Service Provider (CSP) .

Corporate Card – A payment mechanism used by authorized employee/cardholders for supplies, travel, and entertainment expenses incurred during the course of business for a company.

Correspondent bank – A depository institution that accepts deposits and performs banking services for other banks.

Credit – An entry to the record of an account that represents the transfer or placement of funds into an account.

Credit Cap – Limit on the dollar amount of credit transactions that a company can originate from an account or entity.

Credit Card - A payment mechanism used to provide credit to the buyer.

Credit Card Processor - A financial institution or third party that process credit card transactions.

Credit Transaction - A payment transaction that pushes funds from the CSP or CPP to the BPP.

CTX - Corporate Trade Exchange - ACH entry format for corporate payments that include ANSI X12 or UN/EDIFACT payment-related records.

Customer – An individual or entity that receives goods or services, which are subject to bills, invoices or statements. The typical receiver of a bill.

Customer Payment Provider (CPP) - An agent of the Customer that originates payments on behalf of the Customer.

Customer Service Provider (CSP) – An agent of the Customer that provides an interface directly to customers, businesses or others for bill presentment. CSP enrolls customers, enables presentment and provides customer care, among other functions.

Data Transmission – Electronic exchange of information between two data processing points.

Daylight Overdraft – An intra-day status of an account when a financial institution initiates

a payment without sufficient or available funds in the account.

Debit – An entry to request transfer or removal of funds from an account.

Debit Block – Process used to restrict debits to a demand deposit account (generally limited to business accounts).

Debit Cap – Limit on the dollar amount of debit transactions for an account or entity.

Debit Filters – See debit block.

Debit Transaction - A payment transaction originated by a Biller, which as been authorized by the Customer, to withdraw funds from the Customer's account.

Demand Draft - A single payment check without a scannable remittance document attached.

This draft may be drawn on the Customer's account or the Consumer Payment Provider (CPP) account. Generally, this is created by he payee with authorization from the payor, and may not have a signature.

Dispute Management - EIPP system function that allows a buyer to notify the seller of invoice

disputes, the function also allows the seller to respond to the buyer.

EBPP - Electronic Bill Presentment and Payment – The electronic presentation of statements,

bills, invoices and related information sent by a company to its consumer customers, and corresponding payment for goods or services.

EDI - Electronic Data Interchange - A computer-to-computer exchange of standard business data according to agreed upon data formats.

EFT - Electronic funds transfer - Electronic payment such as ACH or wire transfer.

EIP - The term Electronic Invoicing and Payment (EIP) is synonymous with EIPP.

EIPP - Electronic Invoice Presentment and Payment – In the B2B arena, EIPP is the presentment of an invoice from a seller to a buyer, and corresponding payment from a buyer to a seller.

Electronic Bill Presentment and Payment (EBPP) - The electronic presentation of statements, bills, invoices and related information sent by a company to its customers, and corresponding payment for goods or services.

Electronic Payment - Any non paper-based type of payment.

Email Address - A digital address usually belonging to the Customer.

Encryption - Computer generated algorithm that allows secure communication between parties.

Enrollment - The process associated with a Customer establishing a relationship with a CSP.

ERP - Enterprise Resource Program - Integrated, corporate-wide applications such as Accounts Receivable, Accounts Payable, Purchasing, Customer Relationship Management, Treasury, etc.

Exchanges - Forum/Clearinghouse for buyers, sellers or commodities to partner to provide economies of scale and reduced development expenses.

Federal Reserve – Central bank of the United States that sets monetary policy and provides services to financial institutions; an ACH operator.

Fedwire – Payment system operated by the Federal Reserve or payment transactions that are electronically initiated and settled on the same day.

File Transfer Protocol (FTP) –A method to move data across the Internet.

Financial Institution (FI) – A State or Federally chartered depository institution, such as a bank, savings and loan, credit union.

Float – Amount of time represented by checks that are in transit between banks for collection. This includes processing and mail time.

Guaranteed Funds – Both buyer and seller know funds are available at the time of payment.

HTML - HyperText Markup Language - Screen display language for Internet.

IFX - Interactive Financial Exchange - Standard for the exchange of financial data and instructions independent of a particular network technology or computing platform.

It builds on previous industry experience including OFX and GOLD, which are currently implemented by major financial institutions and service providers to enable electronic exchange of financial data between their customers and themselves.

Interoperability - Standards and file formats promoting interaction between systems.

Invoice (or Billing) Cycle - The period of time between the recurring events of updating, invoicing, and charging for services rendered.

Invoice Detail - Information from a seller that provides itemized information to a buyer.

This may include specific invoice event information such as credit card charges, telephone calls, or kilowatts used.

Invoice Notification - A process whereby a buyer is notified that an electronic invoice is available for review and payment.

Invoice Summary - The summary information from a seller that is essential to a buyer to understand what is owed. Typical information may include; Amount Owed, Date Due, Seller, Seller's Account Number. Also: Summary Record, Summary, Invoice Summary, Invoice Summary Record, Bill Summary Record.

ISP - Internet Service Provider - A vendor that provides access to the Internet.

Legacy System – Any existing system (e.g. proprietary, enterprise resource planning, customer service application, etc.) that may require integration with the EIPP solution.

Master Card RPPS - Electronic payment network.

NACHA – The Electronic Payments Association - The National Automated Clearing House Association a national association of payments associations, that develops operating rules and business practices for the Automated Clearing House (ACH) Network and for electronic payments in the areas of Internet Commerce, electronic bill and invoice presentment and payments (EBPP, EIPP), e-checks, financial electronic data interchange (EDI), international payments, and electronic benefit transfer (EBT). NACHA also provides information and education to members.

Net settlement – A transfer of funds between parties in cash, negotiable items or on the books of a mutual depository (e.g., the Federal Reserve Bank), to complete one or more prior transactions and made subject to final accounting.

Netting - an agreed offsetting of positions or obligations by trading partners or participants.

Non-repudiation - A security feature that verifies to the sender that the receiver of the message received the message, and that the integrity of the content was not compromised.

Non-sufficient funds (NSF) –Insufficient funds available to settle a payment.

Notification of Change (NOC) – An ACH entry sent by an RDFI to notify an Originator that information contained in an entry is incorrect or erroneous.

Open Financial Exchange (OFX) - A standard for the exchange of financial data and instructions independent of a particular network technology or computing platform. Major financial institutions and service providers, enabling electronic exchange of financial data between their customers and themselves, currently implement OFX.

Originator – The person or organization that has authorized an ODFI to transmit a credit or debit entry to the account of a Receiver at an RDFI.

Originating Depository Financial Institution (ODFI) – The financial institution which delivers ACH entries directly, or indirectly through a third party, to its ACH Operator.

Participant Directories – A listing of members of a payment network.

Payment - A vehicle to affect the transfer of value.

Payment Authorizations/Instructions – Instructions for routing/posting the payment (e.g. into which bank account payments should be deposited).

Payment Concentration - The process that takes payments from multiple banks and payment networks and consolidates them into a single format (e.g. lockbox, EDI, and ACH).

Payment Disputes – Disagreement between financial institutions or within the payment network.

Payment Due Date - The date by which the Biller requires payment from the Customer.

Payment Instructions – The Instructions for routing/posting the payment (e.g. into the bank account that the funds should be deposited).

Payment Instruments - The instruments required to initiate a payment (e.g. checks, credit cards, debit cards).

Payment Method – A method used to facilitate and process payment.

Payment Posted Date - The date on which a payment is posted to an account.

Payments System - A system or network used to process payments (e.g. ACH, check, debit card and credit card networks).

Payment Systems - Processes by which payment instruments move from one party to another.

Checks, wire transfer, credit card, or ACH are the means of moving money from one bank account to the other.

Personal Identification Number ("PIN") – A code used to authenticate an account holder.

PFM - Personal Finance Management or Manager - Personal Finance Manager Software used by a Customer to manage his/her checking account, etc. Often includes categorization, reporting, and graphing capabilities.

Posting - The process of recording debits and credits to account balances.

Prenote (Prenotification) –A zero dollar ACH entry notifying an RDFI that an Originator will send one or more entries to a Receiver's account.

Purchasing Card – A payment mechanism used by employee/cardholders to obtain goods and services needed at the company.

Real time - The processing of instructions on an individual basis at the time they are received rather than at some later time.

Receiver – Organization or individual that receives funds and/or remittance information.

Receiving Depository Financial Institution (RDFI) – A financial institution that receives ACH entries directly, or indirectly through a third party, from an ACH Operator.

Registration - The process of a Biller's establishing a relationship with a BSP.

Remittance Information - Accounts Receivable information required by the biller to effectively post customer bill payments.

Remittance Method - The method used to deliver funds and remittance information.

Returns – Any entry that cannot be processed and is being returned by the RDFI to the ODFI for correction or reinitiation.

Reversals – An ACH entry or file sent with required deadlines to "correct' or reverse a previously originated duplicate or erroneous entry or file.

Seller – A biller or vendor. An entity providing product or services.

Seller Direct - EIPP model connecting one seller to many buyers. Buyers connect to the seller's site to view invoices.

Service Initiation - The overall term encompassing registration, enrollment and activation.

Settlement - The process by which buyer and sellers or issuers and acquirers exchange financial data and value resulting from sales transactions.

SSL - Secured Socket Layer - A security protocol to enable encrypted, authenticated communications across the Internet.

Statement/Notice – An electronic or paper document sent to a customer/agent that does not have a payment due associated with it.

SWIFT - The Society for Worldwide Interbank Financial Telecommunication is a bank-owned international financial messaging service.

Thick Consolidation - A type of third party consolidation where both the bill summary and bill detail are available on the consolidator's web server.

Thin Consolidation - A type of third party consolidation where the bill summary is available at the consolidator's web server and the bill detail is available at the Biller's web server.

Three-way matching – Accounts payable control procedure matching purchase order, shipping

or receiving documents, and invoice before payment is authorized.

Transit Routing Number – See ABA Routing Number

Travel & Entertainment Card ("T&E"") – Type of Corporate Card.

UN/EDIFACT - The United Nation's body that sets and administers international standards for Electronic Data Interchange usage.

Uniform Commercial Code (UCC) Article 3,4, 4A - The body of law governing commercial transactions in the United States

Value Added Networks (VANs) - Independent 3^rd party that process and/or translates electronic remittance files

Visa ePay – Electronic payment network.

XML - Extensible MarkUp Language - Interactive database Internet language.