Glossary

A

ABECS – Associação Brasileira das Empresas de Cartões de Crédito e Serviços.

Acquirers – Firms responsible for capturing, transmitting, processing and settling debit or credit card Transactions by implementing and managing the acceptance network and affiliating Merchants.

Acquiring Bank – A financial institution designated by the Merchant as the bank to which payment for transactions made with credit and debit cards will be directed.

Acquiring Bank Lockdown – A Merchant, in order to receive payments for card transactions and also advances on receivables, is required to have a merchant account with an

Acquiring Bank. For this purpose, a Merchant will typically agree not to change its acquiring bank for a given period, i.e. the Merchant will be locked down with a particular Acquiring Bank as its bank.

Active Merchants – A Merchant that has performed at least one Transaction in the one hundred and eighty (180) day period prior to any given verification.

Arbitration Chamber – The Market Arbitration Chamber organized by BM&FBOVESPA.

Arbitration Rules – The rules of the Arbitration Chamber, as amended, which will govern arbitration proceedings related with any dispute stated in the arbitration clause included in the Company’s Bylaws and also in the statement of consent of the managers and controlling shareholders.

 

B

BM&FBOVESPA – BM&FBOVESPA S.A. – São Paulo Stock, Commodities and Futures Exchange.

Board of Directors – The Company’s Board of Directors.

Brand – A company, usually an international one, with the rights to its brands and logos, which it licenses to Acquirers and Issuers, among others, in accordance with general rules of management and organization of credit and debit card systems and other payment methods.

Braspag Tecnologia em Pagamento Ltda. (“Braspag”) – A subsidiary of CieloPar, is engaged with providing e- commerce services. The Company’s indirect share, through subsidiary CieloPar, was 99.9% on December 31, 2011.

Bylaws – The Company’s Bylaws.

 

C

CAGR – Compound Annual Growth Rate, the annual growth rate of the Company for the periods addressed in this Prospectus.

Card – Means of identification and of physical or electronic payment, issued and assigned by Issuers for the personal, non-transferable use of Cardholders, and which may or may not have multiple functions such as debit, credit and direct consumer credit (CDC), among others.

Card Administrators – Non-financial institutions that issue and manage both their own and third-party cards, but that do not extend credit directly to their customers. Card issuers represent Cardholders with the financial institutions responsible for extending credit to Cardholders.

Cardholders – Individuals or legal entity representatives who hold cards and use products, goods and services provided by Issuers.

Cash back – A product that enables Cardholders using Visa Electron cards withdraw cash when making purchases with Merchants authorized by the Company.

CBLC – Companhia Brasileira de Liquidação e Custódia.

CDI – Interbank deposit certificate

Central Bank or BACEN – The Brazilian Central Bank.

CieloPar Participações Ltda. – A subsidiary of Cielo, and its corporate purpose is to hold participation in other companies as a partner, quota holder or shareholder. The Company’s direct share in CieloPar was 99.99% on December 31, 2011.

Client: Suppliers of goods and/or services purchased by Cardholders, authorized by Acquirers to accept card transactions.

Co-Branded Private Label Cards – Credit cards issued by large retailers for the purpose of creating customer loyalty, but with the benefits of an associate Brand.

COFINS – Contribution to Social Security Financing

Columbus – Columbus Holdings S.A., a corporation controlled by Banco Bradesco S.A.

Companhia Brasileira de Gestão e Serviços (Orizon) – An organization in which the Company directly holds an equity interest, with the purpose of processing information for companies from the medical area. On December 31, 2011, the Company’s share at Orizon was 40.95%.

Companhia Brasileira de Soluções e Serviços – CBSS (“Alelo”) – An organization that provides benefit voucher and coupon services. Its shareholders are the Company’s Controlling Shareholders.

Controlling Interest and similar terms such as Control, Controlling Shareholder, Controlled Subsidiary and Under Common Control – Power actually employed to direct the corporate activities and guide the operation of the Company’s bodies, directly or indirectly, either de facto or de jure. There is a relative presumption of control ownership in relation to the person or group of persons bound by a shareholders’ agreement or under common control (group of control) holding shares ensuring said person or group of persons an absolute majority of votes of shareholders attending the Company’s last three General Meetings, even though they do not, individually, hold enough shares to ensure them an absolute majority of the voting capital.

CSLL – Social Contribution on Net Income.

 

E

EBITDA – EBITDA consists of net income before income tax and social contribution, financial income (expenses) and depreciation and amortization.

EFT – Electronic funds transfers.

Electronic capture equipment – Data collection and transmission equipment such as POS and Pin Pad.

ERP – Enterprise Resource Planning

Executive Board – The executive officers of the Company, jointly considered.

 

F

Financial Transaction Volume – Financial volume of Transactions captured, transmitted, processed and settled by Acquirers or any other organization performing Transaction settlements.

 

G

Generally Accepted Accounting Principles in Brazil – Accounting principles accepted in Brazil pursuant to the Brazilian Corporation Law, as amended, and to standards and pronouncements issued by the CVM and IBRACON, as well as to the resolutions made by the Federal Accountancy Board.

 

I

IFRS – International Financial Reporting Standards, or International Accounting Rules.

 

Income Tax – Income Tax

Independent Member – Pursuant to the Novo Mercado Listing Rules, an “Independent Officer”: (i) has no bond with the Company, except for equity interest; (ii) is not a controlling shareholder, spouse or close relative of controlling shareholders, or is not or has not been years linked to a company or entity related to the Controlling Shareholder for the past three (persons tied to public education and/or research institutions are excluded from this restriction); (iii) has not been, for the past three years, an employee or a board member of the Company, its Controlling Shareholder, or a company controlled by the Company; (iv) is not a supplier or direct or indirect buyer of services and/or products of the Company to an extent implying loss of independence; (v) is not an employee or manager of the company or entity selling or buying services and/or products to/from the Company; (vi) is not a spouse or close relative of an manager of the Company; and (vii) does not receive other remuneration from the Company except for the Board Member’s compensation (proceeds from profit sharing are excluded from this definition). “Independent Officers” are also those appointed in accordance with the provisions of Article 141, paragraphs 4 and 5, or Article 239 of the Brazilian Corporation Law, which establish quorums and how minority shareholders can appoint members to the board of directors.

Installment Credit Plan – Credit line offered by partner banks, through the Company’s POS equipment. The Company is not related with the financial activity, only compensated by the distribution of the access to bank products.

Interchange Fee – A portion of the Management Fee charged by Acquiring Banks to Merchants that is passed through to credit and debit card Issuers as part of their compensation for approving Transactions performed with cards that they have issued. The Interchange Fee is fixed by Visa International.

IOF – Tax on Credit, Exchange and Insurance Transactions

IPCA – National Extended Consumer Price Index – IBGEIRPJ – Corporate Income Tax (IRPJ)

ISS – Tax on Services

Issuer – A domestic or foreign company, financial institution or otherwise, that extends credit to Cardholders and that is authorized by a Brand to issue cards and/or offer Products to Cardholders in Brazil and/or abroad, as well as to collect amounts from Cardholders in payment for transactions made with said card.

IT – Information Technology.

 

M

M4 Produtos e Serviços S.A. – A subsidiary of Multidisplay, which provides data transmission and fixed and cellular airtime purchase, mobile payment and technological consulting services, software development and licensing. The Company’s indirect share, through subsidiary Servrede, was 50.1% on December 31, 2011.

Management – The members of the Board of Directors and of the Executive Board

Merchant Discount Rate – A fee in the form of a percentage of the Transaction, charged by the Company from Merchants for providing capture, transmission, processing and settlement of Transactions.

Merchants or ME – Suppliers of goods and/or services purchased by Cardholders, authorized by Acquirers to accept card transactions.

Multibrand scenario – Acceptance of several debit and credit card brands.

Multidisplay Comércio e Serviços Tecnológicos S.A. (“Multidisplay”) – A subsidiary of Servrede, which provides data transmission and fixed and cellular airtime purchase. The Company’s indirect share in Multidisplay, through subsidiary Servrede, was 50.1% on December 31, 2011.

 

N

Net Merchant Discount Rate – The Merchant Discount Rate less the interchange fee. Interchange fees make up the commission revenue earned by the Company.

Novo Mercado Listing Rules – Rules that establish special corporate governance practices. Compliance with this regulation is required of any company intending to be listed on the Bovespa’s Novo Mercado.

 

P

Paggo Soluções e Meios de Pagamento S.A. (“Paggo Soluções”) – A subsidiary of CieloPar, which has as a corporate purpose the merchant registration forcredit and debit cards as mobile payment. The Company’s indirect share for Paggo Soluções, through subsidiary CieloPar, was 50.0% on December 31, 2011.

PDV – Merchant-owned POS equipment.

Pin Pad – PIN Pad

POS – Point-of-Sale. Abbreviation referring to POS or electronic equipment owned by the Company, used for capturing card sales. This equipment is installed and maintained by the Company.

Private Label Cards – Credit cards issued by large retailers for the purpose of building customer loyalty, without a Brand.

Products – Visa-branded products provided by the Company, such as Transaction data capture, routing and processing in Brazil.

 

R

Real, Reais ou R$ – Brazil’s currency.

 

S

Servrede Serviços S.A. – A subsidiary of the Company, its corporate purpose is to provide maintenance services and contact with commercial and service establishments. The Company’s direct share of Servinet on December 31, 2011 was 99.99%.

 

T

The Nilson Report – A U.S. publication providing information and insight about electronic payment systems.

 

Transaction – Any and all acquisitions of goods and services from authorized domestic Merchants performed by a Cardholder using a payment card. Where sales are closed to be paid for in subsequent installments, the Company treats each installment as a new Transaction performed.