e-Commerce Glossary | Web Designer Tips Resources.

To better help you understand industry terms. We have compiled the bellow list from various recourses on the web.
E-commerce Glossary with Definitions.

e-Commerce is a recent addition to the English language. No matter how it is spelled, eCommerce, E-commerce, or e commerce. Our glossary is dedicated to introducing the meanings of many important words as they pertain to the subject and its role in internet sales and web design.

The fundamental definition of eCommerce is the transaction of goods, services, or information through electronic means, namely the Internet and all of its channels.

The addition, this branch of commercial mediums has brought with it its own terminology and additions to our rich and complex language, many of which we have listed with their corresponding definitions, as they relate to electronic commerce.


ACH (Automatic Check Handling) :
ACH is an electronic transferal system that is used as an “electronic check” clearinghouse, normally used to process lare quantities of relatively small denomination payments.

Automatic Check Handling transactions settle within 1 to 2 business days and function exactly like a check in respect to the fact that the clearinghouse sorts the ACH files by the banks in which they were deposited, compares them against the paying banks, and adjusts the accounts according to the check ammounts.

Address Verification System (AVS) :
Protocol for the verification that a customer’s billing address matches that which is listed for the credit cart he or she is using.

Affiliate Program :
A commision-based websales referal system utilized by websites to generate sales by having other websites direct visitors over to its site, paying its affiliates the corresponding comission agreed to for all sales originating from visitors that clicked through their individual websites.


B2B (Business to Business) :
The exchange of goods and services between businesses.

B2C (Business to Consumer) :
The exchange of goods and services with the end consumer being the target market.

Benchmark :
A standard derived from the comparisons of one’s counterparts in the same industry or area in order to measure goals or processes.


Card Verification Value (CVV) :
The card verification value consists of a three digit number located on the signature block on the back of most credit cards, save American Express which uses a four-digit code. This is designed to reduce credit card fraud by requiring that the user has in their possession the credit card in question and not just the credit card number and expiration date that can be easily obtained by dubious means.

Chargeback :
The occurrence of an item being debited against a merchant account in cases of refunds and fraudulent actions. A Chargeback normally causes a fee for which the merchant is liable for.

Certificate Authority :
An emitter of digital certificates that confirms the identity of the party which has a website. Obtaining a digital certificate is a must in the world of secure e-commerce.

Cobranding :
An agreement between two companies, one the original providor of a product or service, and the other a reseller which displays their corporate identity scheme on the provider company’s web application.

Cookies :
Cookies are small text files that ca web site stores on a computer when it is visited to record preferences for the usage of that particular site, and sometimes to track browsing habits. They are also crucial for the functioning of shopping cart applications, as they are key for remembering visitors as they navigate through the product pages.

CRM – Customer Relationship Management :
The entire chain of events that come with customer relations. This embarks pre-sales, sales, and service. There is a plethora of software available that permits the recording of this relationship from the initial contact made. Quality CRM software is superior to having disorganized and cluttered records being that time is saved in tracking communications with your clients.


eCheck :
An e-check is an electronic financial insturment that debits funds derectly from the bank account of the remitter, through a third party company that has agreements with a number of different banks. Most generally a check number is generated, and and echeck transaction is one of the most fraud resistant ecommerce transactions available.

EDI (Electronic Data Interchange) :
This is the concept of business to business “b2b” interchange of information between companies or within the same company. The tech boom of the 90’s saw the importance of the imformation/power relationship grow exponentially. Whatever creates power also generates money and therefore creates new enterprises to supply this information.

Encryption :
The process of using cryptic digital keys to transform data into a codified form that prevents outside people from deciphering it.

Etailing :
Etailing consists of virtual storefronts that are online product catalogues that enables consumers to purchase on the website using an ecommerce shopping cart system that enables online shoppers to use credit cards to effect their transactions.


Firewall :
A software utility that provides a computer or network system protection from unauthorized access.


Gateway :
The intermediate computer system that facilitates data transfers between networks; gateways are frequently utilized in ecommerce transactions that take place in a merchant/bank relationship.


Luhn algorithm :
Credit card number generation and verification relies on the LUHN algorithm.


Merchant account :
A merchant account is the recepticle account for funds generated from credit card sales and is a fundamental component of e-commerce.. Here it is received first and then later routed to your business account, normally in an automated fashion. The transfer can occur real-time or have a varied delay depending on the system being used.

Merchant Identification Number (MIDS) :
A unique identification number assigned to all merchants for use in all transactions.


Open Buying on the Internet (OBI) :
The process of interaction between the buyer’s server and the seller’s server that facilitates the exchange of product information and transactions.

Out of the box :
The concept of being able to install an application rapidly seamlessly into an existing system.


P2P (Peer-to-Peer) :
A system that utilizes a protocol which allows computers to exchan ge information between each other without an intermediary.

Payment threshold :
A minimum balance limit set by a company for their affiliates that must be reached before a commission is paid out.

Privacy policy :
The declaration placed on a company’s web portal which states its policy on information collection, use, rules of access, and procedures for removal, along with an advisory of the systems in place to protect the information of website visitors.


Scalability :
The versatility of an application for conforming to the need of an organization as it grows and experiences paradigm changes.

Secure servers :
Encrypted servers that protect the privacy of messages that pass through its system. Most often signified by “https://www” instead of “http://www”. Any credit card transaction system should have solid indications of a secured server, including the https: at the beginning of the URL.

Session cookie :
A single-use cookie temporarily ubicated on the visitor’s computer while a web site is being visited for the purposes of storing user preferences in the duration of the visit. Upon the visitor leaving the site, the coookie is removed from the computer’s memory.

Shareware :
Software that is released at no cost for a specifice lapse of time for evaluation and after the expiration of such, the user is expected to pay for and register the program.

Shopping cart :
Software designed to keep tabs on purchase selections of a visitor to your website until they “checkout” and purchase the items they have chosen.

SLA (Service Level Agreement) :
A policy utilized in merchant/business and merchant/consumer transactions that state the parameters of what service is obligated and under what conditions.

SSL (Secure Socket Layer) :
A secure data transmission protocol that safeguards the integrity of the information that passes through its channels.


Turnkey :
Describes an application or system that requires very few initial modifications or setup procedures, such as a shopping cart service where one just plugs in the information to make it operational.


Uptime :
Uptime is determined by the percentage of time that a website and/or its server is available and online. The acceptable standard defined by the industry benchmark is an uptime percentage of 99.99%.

User session :
The same as a web site visit made by an individual that is terminated upon leaving site or remaining inactive after a certain lapse of time.