E-commerce Glossary


(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.


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.

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.


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 The amount of the disputed transaction is immediately withdrawn from the merchant's bank account, and the merchant has 10 days in which to dispute the chargeback with proof of purchase, signature, proof of delivery, etc.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.


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.

Content Manager:

A Web Application for frequent and efficient updating of Web site content.


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 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.


A file or file system containing organized information (for instance: Product Catalog, Inventory etc.) and, most commonly, a filing and retrieval system for storing information. Examples of database software: MySQL, MS Access, MS SQL Server, etc.

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, Javascript, and cascading style sheets.

Discount Rate:

A percentage fee paid to the merchant account provider 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.


A designation for particular location on the Internet. A domain, for example "www.SitesOutlet.com," contains files that make up the content of Web pages under that address. Domain names are associated with IP addresses.


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


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.

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.

HTML (Hypertext Markup Language):

A set of codes that determine how a Web page will appear, including graphics, links, and text characteristics.

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://."

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 "" IP addresses are associated with domain names.


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

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.

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.

Merchant Services Provider:

A bank 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.

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.

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.

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.


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

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.

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.

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 program that lets you do keyword searches for information on the Web or within a website.

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.


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:

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 remembers which items are selected while the cardholder views other items within the online web-store, keeps a running total, and may calculate taxes and shipping. The items in the shopping cart are eventually ordered if the cardholder chooses.


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.

Transaction Fee:

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

URL (Uniform Resource Locator):

An address for a file (or page) located on the Internet, usually the Web.  Example: "www.sitesoutlet.com."

Web Application:

A software application that is accessible using a web browser. It typically consists of a client tier (the web browser), a presentation tier (web servers) and a database tier. The application may be spread over multiple presentation tiers and indeed use multiple application tiers, using multiple database sources.

Web Browser:

A software application that allows for the browsing of the World Wide Web. Example: MS Internet Explorer.

Web Host:

A Web hosting company 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. Cost structures are determined by the amount and complexity of services offered, such as scripting tools, database tools, multimedia streams, statistics, etc.

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.

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