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Jargon buster Learn the language of ecommerce

Ecommerce has a whole language of its own, and it can be a challenge to get familiar with all the different terms in use. Here’s a handy jargon buster to help you navigate your way through ecommerce terminology.

We’re also including separate sections for our partner merchant services providers, explaining the words they use.

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Acquiring bank or merchant bank
The acquiring bank accepts and processes card payments such as Visa and MasterCard on the retailer’s behalf. This involves a card network, which connects to the retailer’s own bank (the issuing bank), via a payment gateway. This system verifies any pending card payments. The acquiring bank takes on the full risk responsibility for card payment transactions.
Anonymous checkout
The process which allows a customer to buy from an online store without registering with it and creating an account.
Average order value (AOV)
The average amount of spend per customer order. This is a commonly used performance metric.
Category
Grouping products into a hierarchy of different categories and subcategories can make it easier for shoppers to search for and find them.
Checkout
The checkout process is how the ecommerce site gathers information from the customer to enable them to purchase the items in their shopping cart. It includes payment information, address and order verification. The final stage in this process is when the customer reviews and places their order (see order confirmation).
Conversion
The process by which a site visitor turns into a confirmed customer by completing a transaction.
Conversion rate
The ratio of site visits to confirmed sales is an ecommerce site’s conversion rate. It’s a valuable digital performance metric.
Coupon code or discount code
During a transaction, a customer may enter a special code which gives them a discount for the goods they’re purchasing. Coupon codes are a useful marketing tool for merchants.
Drop-ship
This is a way of fulfilling orders where the retailer can have orders shipped directly from the supplier or manufacturer to the customer. This means the merchant doesn’t need to store these goods as inventory items.
Ecommerce
Selling of goods and services over the internet.
Ecommerce platform
The software programme or application that enables a merchant to sell online as a business. Different ecommerce platforms have different features, but generally include: product information, customer account information, order management, product search, shopping cart, and checkout processes.
Fulfilment
This is the process where the ecommerce store completes and finishes the delivery of goods or services that the consumer has bought.
Interchange
This refers to the fees that the merchant account (see below) must pay each time a customer makes a card transaction. They are paid to the acquiring bank to cover potential costs for approving these payments.
Inventory
A retailer’s complete list of current stock.
Issuing bank
The retailer’s own bank account provider, responsible for issuing and payment received from credit cards (as opposed to the acquiring bank’s responsibility for card payment transactions).
Merchandising
How the retailer places and displays their products to attract the interest of customers and entice them to purchase. This can include specific product promotions and recommendations.
Merchant account
This is the account the retailer holds with a bank or payment gateway provider. There will be a contractual agreement in place that allows the retailer to accept cards or other payment methods on their ecommerce site.
Merchant or Retailer
The person or company selling goods or services.
Order confirmation
The final step in the checkout process, where the retailer informs the customer that they have placed their order successfully.
PCI compliance
This stands for Payment Card Industry Data Security Standard and it is the set of requirements any company that processes, stores or transmits credit card information must meet.
Payment gateway
A payment gateway is a service provider that authorises payments, enabling the retailer to take online payments for goods or services.
Privacy policy
The statement that an ecommerce store makes to explain to customers how the retailer will collect, store and use their data.
Product feed
A file that lists a product inventory and product details, which can provide useful data for promoting products in the feed.
Product recommendation engine
Software that will recommend specific products to customers based on information available.
Registration
Creating a customer account on an ecommerce site, which will hold personal information such as the customer’s name, billing and shipping address and payment details.
Returns policy
This states to customers how, when and under what conditions they can return products they have purchased from the retailer.
SSL certificate
This is a web server file that ensures all the sensitive details transmitted on a website are encrypted, such as payment information. Having an SSL certificate signals to customers that a site is using a trusted and secure connection.
Shipping
Sending products the customer has purchased to their specified shipping address. Shipping can also refer to additional fees the online retailer charges the customer for this service.
Shopping cart
How an online store lets customers add multiple items to a single order.
Stock keeping unit (SKU)
A unique form of identification applied to individual products to differentiate between sales items, and to track inventory.
Tax
The total collectable taxes under local laws and policies as part of an online order.
Transactional email
An automated email sent in response to a specific transaction or event, such as a customer purchase or online enquiry.

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