acquiring bank: The bank that provides an e-commerce business with its credit card processing account. This bank sends credit card and purchase information from e-commerce transactions to a credit card association (such as Visa and MasterCard), which forwards it to the issuing bank.

ADSL (asymmetric digital subscriber line): A communications protocol for connecting computers and other electronic devices to a network, such as the Internet. ADSL offers more bandwidth than current telephone modem connections. ADSL can operate over most existing telephone lines but is currently available in only a few areas and generally costs more.

affiliate programs: Programs (sometimes called associate or commission-based advertising programs) designed to drive targeted traffic to your site. They typically pay a commission based on purchases made by traffic sent from you, the referring site.

API (application program interface): The specific method prescribed by a computer operating system, or by another application program, by which a programmer writing an application program can make requests of the operating system or another application. Unlike a GUI (graphical user interface), which is a direct user interface, the API interfaces with an operating system or a program.

ASP (active server page): An HTML page that includes one or more scripts, or small embedded programs, that are processed on a Microsoft Web server (Internet Information Server) before the page is sent to the user. Typically, the script in the Web page (at the server level) uses input from a user's request to access data from a database and then builds or customizes the page before sending it to the requester.

authorization: In multi-user computer systems, a system administrator defines for the system which users are allowed access to the system and their individual privileges of use (such as access to certain file directories, hours of access, amount of allocated storage space, and so forth). When users log in to a secured computer operating system or application program, the system or application identifies what resources the user can be given during this session. Authorization can mean both the preliminary establishment of permissions by a system administrator and the actual checking of the permission values that have been set up while a user is requesting access. On the Internet, authorizations are defined for "anonymous" users that are accessing a system via the Internet.

AVS (address verification system): In 1996, VISA/MasterCard headquarters introduced a new regulation requiring all businesses who manually key in the majority of their credit card transactions to have a special fraud prevention feature on their credit card processing equipment. This feature is referred to as an address verification system (it checks to see that the billing address given by the customer matches the credit card). If you opt not to use AVS, VISA and MasterCard will not support your transactions and will charge you an additional 1.25% on those sales.

backbone: In a hierarchical network, the backbone is the top level, employing high-speed data transmission and serving as a major access point; smaller networks connect to the backbone.

bandwidth: 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.

bank card: A plastic card that is widely accepted by merchants as a result of a standard set of rules for the authorization of its use, clearing, and settlement of transactions, used to credit an account for processing a sales transaction. The most common bank card is a credit card. Transactions are usually not profitable for amounts of less than $5 (U.S.); micropayment schemes are designed for much smaller increments of payment.

batch: A collection of credit card transactions saved for submitting at one time, usually each day. Merchants who do not have real-time verification systems must submit their transactions manually through a POS terminal. Batch fees are charged to encourage a merchant to submit his or her transactions at one time, rather than throughout the day.

browser: A software program used for locating, requesting, and displaying Web pages. Examples include Netscape Navigator, Microsoft Internet Explorer, and Opera.

capture: The submission of a credit card transaction for processing and settlement. POS terminals and real-time processing software capture transactions to submit to merchant account providers or credit card processors.

cardholder: A person or company who has an active credit card account with which transactions can be processed.

cascading style sheets (CSS): A method used to attach styles such as specific fonts, colors, and spacing to HTML documents. Because they "cascade," some elements take precedence over others.

CFR (cost and freight): Indicates that a quoted price includes the cost of the goods and transportation charges but not of insurance.

CGI (common gateway interface): A way of interfacing computer programs with HTTP or Web servers, so that a server can offer interactive sites instead of just static text and images.

CGI script: A program that is run on a Web server, in response to input from a browser. The CGI script is the link between the server and a program running on the system; for example, a database. CGI scripts are used with interactive forms.

chargeback: A chargeback occurs when a card holder disputes a credit card transaction with his or her credit card issuer. The card issuer initiates a chargeback against the merchant account. The amount of the disputed transaction is immediately withdrawn from the merchant's bank account, and the merchant has 10 days in which to dispute the chargeback with proof of purchase, signature, proof of delivery, etc. A chargeback fee is usually assessed to the merchant on top of the actual transaction. See also retrieval request.

CIF (cost, insurance, and freight): A term indicating that a quoted price includes the cost of the goods, insurance, and transportation charges.

client: The computer in a client/server architecture that requests files or services. The computer that provides services is called the server. The most common types of client on the Internet are computers running browsers or e-mail programs. The client may request file transfer, remote logins, printing, or other available services. The client also means the software that makes the connection possible.

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.

cookies: Small files that are automatically downloaded from a Web server to the computer of someone browsing a Web site. Information stored in cookies can then be accessed any time that computer returns to the site. Cookies allow Web sites to "personalize" their appearance by identifying visitors, storing passwords, tracking preferences, and other possibilities.

credit card: A bank card establishing the privilege of the person to whom it is issued to present it as payment to a merchant; the card bearer must reimburse the credit card company the amount of the sale. Credit card transactions are usually not profitable for amounts of less than $5 (U.S.); micropayment schemes are designed for much smaller increments of payment.

credit card processors (or third-party processors): Merchant services providers that handle the details of processing credit card transactions between merchants, issuing banks, and merchant account providers. Web site operators usually must first establish their own merchant account before contracting for credit card processing services.

crawler: See robot.

cXML (commerce XML): A new set of document type definitions (DTD) for the XML specification. cXML works as a meta-language that defines necessary information about a product. It will be used to standardize the exchange of catalog content and to define request/response processes for secure electronic transactions over the Internet. The processes includes purchase orders, change orders, acknowledgments, status updates, ship notifications, and payment transactions.

database: 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 Microsoft Access.

DCS (destination control statement): A document that accompanies nearly all commercial shipments that declares the shipment's contents are licensed for export to a particular destination. The anti-diversion clause in the DCS precludes the diversion of the shipment to any other destination.

DDS (digital data storage): debit card: A financial instrument used by consumers in place of cash. Unlike a credit card, debit card purchases are deducted automatically from the cardholder's account, like a check. Visa and MasterCard now offer debit cards through banks and other financial institutions.

dHTML (dynamic HTML): An extension of HTML that gives greater control over the layout of page elements and the ability to have Web pages that change and interact with the user without having to communicate with the server. The three components of DHTML pages are HTML, Java script, and cascading style sheets.

digital signature: A digital code that can be attached to an electronically transmitted message that uniquely identifies the sender. Like a written signature, the purpose of a digital signature is to guarantee that the individual sending the message really is who he or she claims to be. Digital signatures are especially important for e-ccommerce and are a key component of most authentication schemes.

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. CyberCash's "Digital Coin" system is an example of a digital wallet system.

discount rate: A percentage fee paid to the merchant account provider or ISO for handling an electronic transaction. Most Web merchants pay between two and 10 percent of their revenue from online credit card or electronic check orders.

domain: A designation for particular location on the Internet. A domain, for example "MerchantWorkz.com," contains files that make up the content of Web pages under that address. MerchantWorkz.com/intro.htm and MerchantWorkz.com/report3.htm are different Web pages located within the same domain. Domain names are associated with IP addresses.

download: To transfer files or data from one computer to another. To download means "to receive"; to upload means "to transmit."

e-cash: A trial form of electronic funds transfer over the Internet (and soon by e-mail). The e-cash software stores digital money, signed by a bank, on the user's local computer. The user can spend the digital money at any shop accepting e-cash, without the trouble of having to open an account there first, or having to transmit credit card numbers. The shop just has to accept the money, and deposit it at the bank. The security is provided by a public key digital signature.

e-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. See also Internet commerce.

EDC (electronic data capture): The use of a POS terminal for validating and submitting credit card transactions to a merchant account provider or other credit card processor. In online credit card processing, software takes the place of the POS terminal.

EDI (electronic data interchange): EDI is a global computer network, separate from the Internet, used to handle financial transactions between banks and other institutions.

EFT (electronic funds transfer): Transfer of money initiated through electronic terminal, automated teller machine, computer, telephone, or magnetic tape. In the late 1990s, this increasingly includes transfer initiated via the Web. The term also applies to credit card and automated bill payments.

EMC (export management company): A firm that provides exporting services to other firms. The export management firm will either take title to act as an intermediary merchant or provide export management services in exchange for fees or a commission.

euro: The common currency shared by most of the members of the European Union (Britain, Greece, and Denmark are not participating). Introduced in January 1999, the euro will eventually replace national currencies such as the German mark, French franc, and Italian lira.

export license: Permission granted to ship a product to a foreign recipient. In the United States, export licenses are either general licenses or IVLs (individual validated licenses).

e-zine: A regular publication on some particular topic distributed in digital form, chiefly now via the Web but also by e-mail or floppy disk.

factoring: The purchase of debts owed, or "accounts receivable," in exchange for immediate payment at a discount. In e-commerce, the term is often applied to ISOs 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.

FAQ (frequently asked questions): A list of the answers to frequently asked questions, usually questions asked by visitors to a Web site.

file compression: You can use PKZIP, ZipIt, gzip, or another compatible archiver to compress a file (to code the data in it in a way that makes it more compact). Compressed files save storage space and are faster to transmit.

freight forwarder: A firm that handles export shipments for other firms.

front end: The user interface that appears on a Web page and allows a visitor to the site to interact with dynamic features, including databases, shopping cart programs, and online purchase processing software.

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.

gateway: A device that connects two computer networks that use different protocols. It translates between protocols so that computers on the connected networks can exchange data. For example, commercial online services often have gateways for sending e-mail to Internet addresses.

gateway page: Also known as a "jump," "doorway," or "bridge" page. In order to optimize a Web site's ranking with search engines, some Webmasters build gateway pages, pages customized to each search engine with specific meta tags and keywords. These pages are intended to appeal to search engine robots, and aren't always visible to customers who visit the Web site.

general license: A declaration by the U.S. Bureau of Export Administration that permits the open export of certain nonstrategic goods and services to designated countries. Exporters of these goods need not acquire an IVL (individual validated license).

GIF (graphic interchange file): A file type that contains a graphic, photo, or other image. GIFs are commonly found on the Web, along with another graphic file format, the JPEG. GIFs tend to take less memory and bandwidth than JPEGs, and can contain animation. JPEGs offer greater image clarity, especially for photo images.

holdback: 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.

HTML (hypertext markup language): A set of codes that determine how a Web page will appear, including graphics, links, and text characteristics. Other code sets that build on HTML include dHTML, VRML, and XML.

HTTP (hypertext transfer protocol): The protocol most often used to transfer information from Web servers to browsers, which is why Web addresses begin with "http://."

ICS (Internet commerce services): The services an Internet commerce provider offers to enable clients to handle many facets of their business on the Internet.

interchange: A standard format for sharing or transferring data electronically between parties that do not share a common application. Usually a format that is platform-independent is agreed upon as a standard. Examples of common interchange formats include EDI (electronic data interchange), ASCII (American Standard Code for Information Interchange), and GIF (graphics interchange format).

Internet commerce: A broad term covering all commercial transactional activities on the Internet. Internet commerce can range from vendors selling software from a Web storefront (Web site) to large corporate procurement systems using an Internet-based VPN (virtual private network) to deal with trading partners. Internet commerce is not synonymous with e-commerce, which covers all electronic commercial activities.

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.

ISO (independent service organization): A firm or organization that offers to process online credit card transactions, usually in exchange for transaction fees or a percentage of sales. Merchants must generally establish a merchant account before contracting for ISO services, although some ISOs claim not to require separate merchant accounts. See also factoring.

ISO 9000: A set of standards for electrical and electronic products, formulated by the International Standards Organization. Product quality standards in most nations must either meet or exceed ISO 9000 standards.

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.

issuing bank: The bank that maintains the consumer's credit card account and must pay out to the merchant's account in a credit card purchase. The issuing bank then bills the customer for the debt.

IVL (individual validated license): Written declaration by the U.S. Department of Commerce granting permission to export specified products to a specified foreign recipient. See also general license.

Java: 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).

JPEG (or JPG): A file format used for storing graphic images, usually photographs. JPEG files are larger than GIFs of the same image but offer better color control and clarity. See also GIF.

keyword: A word or phrase used in a search engine query, for example, to find Web documents relating to a particular subject.

LAN (local area network): A network that connects computers that are close to each other, usually in the same building, linked by a cable.

MAP (merchant account provider): A bank or other institution that hosts merchant accounts and processes online credit card transactions. The term is also often used broadly to include any credit card processing service, including ISOs.

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: A bank that holds a merchant account. After a consumer buys a product using a credit card, the merchant bank places funds into a merchant account in exchange for the right to collect on the debt owed by a consumer. See also merchant account provider.

meta tag: A special HTML tag that provides information about a Web page. Unlike normal HTML tags, meta tags do not affect how the page is displayed. Instead, they provide information such as who created the page, how often it is updated, what the page is about, and which keywords represent the page's content. Many search engines use this information when building their indices.

MP3: A digital audio compression algorithm that acheives a compression factor of about 12 while preserving sound quality. It does this by optimizing the compression according to the range of sound that people can actually hear. MP3 is currently (July 1999) the most powerful algorithm in a series of audio encoding standards developed under the sponsorship of the Motion Picture Experts Group (MPEG) and formalized by the International Organization for Standardization (ISO). MP3 files (filename extension ".mp3") can be downloaded from many Web sites and can be played using software available for most operating systems (also downloadable), e.g., Winamp for PC, MacAmp for Macintosh, and mpeg123 for Unix.

merchant services provider: A bank, ISO, or other firm 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. Some MSPs claim that they do not require merchant accounts; this may indicate factoring, which is illegal in many areas. See also holdback.

micropayment: 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.

monthly minimum: The minimum amount in fees and percentages charged by a merchant services provider in a given month. If account activity does not generate the monthly minimum, the account holder must make up the difference.

MOTO discount rate (mail order / telephone order discount rate): The discount rate charged by the merchant account provider for credit card transaction in which the actual credit card was not available to the merchant. MOTO discount rates are generally higher than swipe discount rates to account for the increased chance of fraud or nonpayment.

network: A group of interconnected computers, including the hardware and software used to connect them.

nexus: The process used to determine if a company must collect sales tax in a particular state. Generally, this is determined by whether a company has a substantial physical presence in the state, i.e., a store, an office, a warehouse, or a similar physical structure.

payment gateway: The code that transmits a customer's order to and from a merchant's bank's transaction-authorizing agent — usually a MAP (merchant account provider). See also payment gateway provider.

payment gateway provider: A company that provides code and/or software for an e-commerce site to enable it to transfer information from its shopping cart to the acquiring bank, and on through the rest of the credit card transaction. See also payment gateway.

Perl: Perl is a general-purpose programming language invented in 1987 by Larry Wall. With over one million users worldwide, it has become the language of choice for Web development, text processing, Internet services, mail filtering, graphical programming, systems administration, and every other task requiring portable and easily-developed solutions.

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

POS terminal (point of sale terminal): An electronic device used for verifying and processing credit card transactions. If the credit card is available, the merchant can swipe the card through the terminal. See also swipe discount rate and MOTO discount rate.

protocol: A set of rules that regulate the way data is transmitted between computers.

public key encryption: 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.

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

real-time processing: 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.

reserve account: See holdback.

retrieval request: A retrieval request is what happens when a card holder cannot remember a credit card transaction, or the bank wants order information for some reason. The card issuer initiates a retrieval request, in which the merchant has 10 days to respond with the order information or the retrieval request will turn into a chargeback. There is usually a retrieval request fee issued against the merchant also in these cases.

robot: A software application that automatically finds and retrieves information from the Web. Also called a "spider" or "crawler."

SET (secure electronic transaction): A system for encrypting e-commerce transactions, such as online credit card purchases. Developed by Visa, MasterCard, Microsoft, and several major banks, SET combines 1,024-bit encryption with digital certificates to ensure security. SET is still in development.

settlement: A process of completing fund transfers so that all parties in a transaction are paid for their goods or services.

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.

search engine: A remotely accessible program that lets you do keyword searches for information/sites on the Web.

secure server: A Web server or other computer connected to the Internet that is capable of establishing encrypted communication with clients, generally using SSL or SET.

server:The computer in a client/server architecture that supplies files or services. The computer that requests services is called the client.

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

shopping cart program: A software package that runs as part of a Web site to collect and record purchasing decisions by a visitor. Shopping cart programs are stored on Web servers.

smart card: A plastic card containing a computer chip that can store electronic "money." Unlike a credit card, a smart card can only spend out the dollar amount its owner has already put into the card account. It's similar in function to a prepaid calling card but is available for all purchases.

spam: Unsolicited e-mail. There are two common usages: 1) mass e-mailings by commercial sites to recipients who have not requested any contact, and 2) e-mail sent to intentionally annoy or harass the recipient, including crashing his or her computer by overloading its e-mail capacity.

spamexing: Stuffing a Web page full of words in the hope of making it high on the list for search engine robots. Sometimes a Web page will have a list of many words, or the same word repeated many times, with the text in the same color as the background. Spamdexed Web pages will be rejected by search engines.

spider: See robot.

swipe discount rate: The discount rate charged by a merchant account provider for transactions in which a credit card is available for inspection by the merchant. Swipe discount rates are generally lower than MOTO discount rates because the merchant can match signatures and perform other checks for fraud or misuse.

T-1 (also T-2, T-3): Commercial connections to the Internet. T-1 connections offer approximately 25 times the bandwidth of 56.6 Kps telephone modems.

tag: A code within a data structure that gives instructions for formatting or other actions. HTML documents are set up using HTML tags, which serve various functions, such as controlling the styling of text and placement of graphic elements and providing links to interactive programs and scripts.

tag line: A line of copy used in an ad that captures the theme of the advertisement or broader campaign and is placed prominently within it.

terminal: An end-use device (usually with display monitor and keyboard) with little or no software of its own that relies on a mainframe or another computer (such as a PC server) for its "intelligence." A variation of this kind of terminal is being revived in the idea of the thin client or network computer. The term is sometimes used to mean any personal computer or user workstation that is hooked up to a network.

thin client: A simple client program (not required to know how to interpret and display objects much more complex than menus and plain text ) or hardware device that relies on most of the function of the system being in the server.

transaction fee: A charge for each credit card transaction, collected by the MAP (merchant account provider) or ISO. Transaction fees usually fall between $0.20 and $1 (U.S.).

turnkey: A business solution in which the provider assumes total responsibility from design through completion of the project. For example, you can have a turnkey Web site (a complete site built according to your specifications), a turnkey e-commerce solution (which would include all the software and merchant accounts required to enable an e-store to accept credit cards), or a turnkey search engine submission service (which writes your keywords and submits your site to search engines and directories for you). Many consulting firms refer to themselves as turnkey solution providers, meaning that they can assess your needs and do all the coding required to build an entire e-commerce capable Web site.

turnkey application: Software that requires little or no modification when inserted into a Web site. In e-commerce, many MAPs (merchant account providers) and ISOs offer turnkey applications for processing credit card orders online.

URL (uniform resource locator): An address for a file (or page) located on the Internet, usually the Web. Example: "www.MerchantWorkz.com."

VPN (virtual private network): A private network of computers that's at least partially connected by public phone lines. A good example would be a private office LAN that allows users to log in remotely over the Internet (an open, public system). VPNs use encryption and secure protocols like PPTP to ensure that data transmissions are not intercepted by unauthorized parties.

VRML (virtual reality modeling language, or virtual reality markup language): A specification for displaying three-dimensional objects on the World Wide Web. You can think of it as the 3-D equivalent of HTML. It is used to create the illusion of three-dimensional objects for onscreen virtual reality environments. The computer shows an apparently three-dimensional object from a certain position, and then creates the illusion of movement by gradually changing the viewpoint. The objects can be programmed to respond to mouse clicks.

Web host: A Web hosting company (usually an ISP) leases server space and Web services to companies and individuals who wish to present a Web or e-commerce presence but do not wish to maintain their own servers. The servers are connected to the same fast Internet backbone as the ISP. Cost structures are determined by the amount and complexity of services offered, such as scripting tools, credit card processing, etc.

Webmaster: The alias or role of the person(s) responsible for the development and maintenance of one or more Web servers and/or some or all of the Web pages at a Web site. The term does not imply any particular level of skill or mastery. The Web master is often also the designer of some or all of the site’s pages.

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.

Web (short for simply Web): The entire collection of files written in HTML and similar mark-up languages available on the Internet. Clients on the Internet use their browsers to request these files from Web servers and then display them as Web pages. The Web is only a portion of the Internet; other parts include e-mail communication and FTP.

XML (extensible markup language): A metalanguage containing a set of rules for constructing other markup languages. With XML, people can make up their own tags, which expands the amount and kinds of information that can be provided about the data held in documents. It enables designers to create their own customized tags to provide functionality not available with HTML. For example, XML supports links that point to multiple documents, as opposed to HTML links, which can reference just one destination each.

zip: See file compression.