Practice English vocabulary for card payment processing: authorization, capture, chargebacks, interchange fees, and card network terminology.
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What is the difference between 'authorization' and 'capture' in card payments?
Authorization reserves the funds on the cardholder's account (checking that funds are available). Capture (or settlement) is when the merchant actually claims the funds. Hotels, car rentals, and restaurants often pre-authorize then capture the final amount.
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What is a 'chargeback' in card processing?
A chargeback is a forced reversal of a card transaction, initiated by the cardholder's issuing bank. Merchants have a window to dispute it with evidence. High chargeback rates lead to penalties or loss of card acceptance.
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What is 'interchange fee' in card payments?
Interchange is set by card networks (Visa, Mastercard) and paid from the acquirer to the issuer. Rates vary by card type (debit vs. credit, consumer vs. commercial), merchant category, and region.
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What does '3DS (3D Secure) authentication' add to card payments?
3D Secure (3DS2 is the current version) adds a cardholder authentication step. When triggered, liability for fraud shifts from the merchant to the card issuer. It is required for strong customer authentication (SCA) under PSD2 in Europe.
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What is a 'card network' (e.g., Visa, Mastercard) and what role does it play?
Card networks (Visa, Mastercard, Amex) operate the rails that connect acquirers (merchant's bank) and issuers (cardholder's bank). They set the rules, manage dispute resolution, and charge network fees for using their brand and infrastructure.