Glossary

Your essential guide to the most important terms in payments, FinTech, and payment orchestration, designed to help you navigate complex industry language with clarity and confidence.

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A/B Testing (in Payments)

A/B testing in payments involves comparing two versions of a payment flow or configuration, such as different checkout layouts, authentication prompts or payment options, to determine which version results in higher conversion or better performance.

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ACH (Automated Clearing House)

ACH is a US-based electronic network for bank-to-bank transfers, including payroll, bill payments and direct debits. ACH payments are normally processed in batches rather than in real time.

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AML (Anti-Money Laundering)

AML encompasses laws, regulations and procedures intended to prevent the use of financial systems for money laundering or financing illegal activities. AML processes often include customer due diligence, transaction monitoring and record keeping.

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API (Application Programming Interface)

An API is a structured set of rules and protocols that allows different software systems to communicate. In payments, APIs are used to initiate transactions, manage payment operations, exchange data and integrate with service providers.

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APMs (Alternative Payment Methods)

APMs refer to payment methods that operate outside traditional card networks. Examples include digital wallets, bank transfer schemes, buy-now-pay-later services, mobile payments and region-specific payment solutions.

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ATO (Account Takeover)

Account takeover occurs when an unauthorised individual gains access to a customer’s account and uses stored payment details or initiates actions without permission. This type of fraud often involves stolen login credentials.

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AVS (Address Verification Service)

AVS is a fraud-prevention tool that verifies the billing address provided during a card-not-present transaction against the address held by the card issuer.

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Account Updater

An account updater is a service offered by card schemes or acquirers that automatically updates stored card details when a customer’s card is replaced or renewed, helping reduce payment failures for recurring or stored-card transactions.

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Acquirer (Acquiring Bank)

An acquirer is a financial institution that enables merchants to accept card payments. It connects the merchant to the card schemes (such as Visa, Mastercard, and American Express) and manages authorisation, settlement and chargebacks.

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Acquiring Processor

An acquiring processor is the technical service provider that handles the data flow required to process card transactions. It routes information between the merchant, the acquirer and the card schemes and ensures that authorisation and settlement messages are transmitted correctly.

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Approval Rate (Authorisation Rate)

Approval rate refers to the percentage of payment attempts that are successfully authorised by an issuer or payment provider. It is a key metric for understanding payment performance and customer conversion.

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Authorisation (Payment Authorisation)

Authorisation is the process in which the card issuer evaluates a payment request and decides whether to approve or decline it. This step checks factors such as available funds, card validity and potential fraud risk.

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BIC (Business Identifier Code)

A BIN is the first 6–8 digits of a payment card number and identifies the issuing bank or financial institution. BINs are used to determine card type, issuer location and the appropriate routing of a transaction.

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BIN (Bank Identification Number)

BIN (Bank Identification Number) is the first 6–8 digits of a payment card number and identifies the issuing bank or institution. It helps determine card type, issuer location and the routing of a transaction.

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BIN Range

A BIN range is a group of BINs assigned to a card issuer. BIN ranges help payment systems identify card attributes such as brand, product type or geographic region.

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BIN Routing

BIN routing is the process of determining which acquirer or payment provider should handle a transaction based on the card’s BIN. This is often used to optimise routing paths or comply with regional scheme rules.

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BNPL (Buy Now, Pay Later)

BNPL is a payment option that allows customers to split purchases into instalments or delay payment. BNPL services are typically offered by specialised providers and are common in e-commerce.

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BaaS (Banking-as-a-Service)

BaaS refers to technology platforms that provide access to banking capabilities, such as account creation, cards, payments, or compliance, via APIs. These services enable non-banks to embed financial functionality into their products.

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Bank Transfer

A bank transfer is the movement of funds directly from one bank account to another. Bank transfers may be processed in real time or via batch systems, depending on the country and payment scheme.

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Batch Processing

Batch processing is the method of handling multiple payment transactions together at scheduled intervals, rather than processing each transaction individually in real time.

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Beneficiary

The individual or organisation that receives funds in a payment or transfer. The term is commonly used in bank transfers and cross-border payments.

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Billing Address

A billing address is the address associated with a customer’s payment method. It is used for verification purposes, particularly in card-not-present transactions through tools such as AVS.

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Billing Descriptor

A billing descriptor is the text that appears on a customer’s bank or card statement to identify a merchant or transaction. Clear descriptors can reduce disputes and customer confusion.

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Bounce Rate (in Payments)

In the context of payments, bounce rate refers to the proportion of users who leave the checkout process before completing a payment. It is influenced by factors such as page design, user experience, available payment methods and loading times.

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Bridging Currency

A bridging currency is an intermediary currency used to complete a cross-border transaction when direct conversion between two currencies is not available. It enables settlement and exchange across different currency pairs.

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Business Model Authentication

Business model authentication is the process of validating that a merchant’s business model complies with regulatory and scheme-specific requirements. This may be conducted during merchant onboarding or periodic reviews.

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C2B (Consumer-to-Business)

C2B (Consumer-to-Business) refers to a payment or transaction flow where an individual consumer pays a business. This includes online purchases, subscriptions, point-of-sale card payments or any transaction where funds move from a consumer to a merchant.

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C2C (Consumer-to-Consumer)

C2C (Consumer-to-Consumer) describes payments made directly between individual consumers. These payments are often facilitated by digital wallets, peer-to-peer transfer apps or online marketplaces.

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CDD (Customer Due Diligence)

A regulatory requirement involving verification of customer identity and assessment of risk as part of anti-money laundering processes.

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CNP (Card-Not-Present)

CNP (Card-Not-Present) refers to transactions where the physical payment card is not used at a point of sale. Typical examples include e-commerce, in-app payments and phone orders. CNP transactions generally carry a higher fraud risk compared to card-present transactions.

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CP (Card-Present)

CP (Card-Present) describes transactions where a physical card is used in person, usually at a terminal or point of sale. Technologies such as chip-and-PIN, contactless or magnetic stripe may be involved. CP transactions typically carry lower fraud risk.

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Card Scheme

Card Scheme refers to a global or regional card network, such as Visa, Mastercard, American Express or domestic schemes, that sets the rules, standards and infrastructure enabling card payments.

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Card Scheme Fee

Card Scheme Fee is a charge applied by card schemes to acquirers or issuers for processing card transactions. These fees contribute to the cost structure of a card payment and may be reflected in merchant fees.

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Card Verification Code (CVC/CVV)

CVC/CVV is a security code printed on a payment card (typically three or four digits) used to verify card-not-present transactions. It helps confirm that the customer is in possession of the card details.

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Cardholder Authentication

Cardholder Authentication is the process of verifying a cardholder’s identity during a transaction. Methods may include 3D Secure, biometrics, passwords or one-time passcodes.

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Chargeback

A chargeback is the reversal of a card transaction initiated by the cardholder’s issuing bank. Reasons may include unauthorised use, non-delivery of goods or services or processing errors. Chargebacks can lead to financial loss and additional fees for merchants.

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Chargeback Ratio

Chargeback Ratio measures the number of chargebacks compared with the total number of transactions over a given period. Card schemes use this ratio to assess merchant risk and may impose penalties if levels exceed set thresholds.

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Checkout

Checkout is the stage in an online or in-app purchase where customers review their order, provide payment details, select shipping options and complete the transaction.

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Clearing

Clearing is the stage in payment processing where transaction information is exchanged between acquirers, issuers and card schemes to calculate the final amounts owed. Clearing occurs before settlement.

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Compliance

Compliance refers to adherence to regulations, standards and network rules within the payments industry. This may include AML, KYC, PCI DSS, data protection laws and card scheme requirements.

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Consumer Authentication

Consumer Authentication is the verification performed to confirm the identity of the customer. In card payments, this often involves 3D Secure or other multi-factor authentication methods.

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Contactless Payment

Contactless Payment allows a customer to pay by tapping a card or mobile device on a compatible terminal using NFC (near-field communication) technology. These transactions are typically quick and often exempt from PIN for low-value payments.

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Conversion Rate (in Payments)

Conversion Rate in payments measures the percentage of customers who successfully complete a transaction after initiating the checkout process. It can be affected by user experience, payment method availability, authentication and approval rates.

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Cross-Border Payment

Cross-Border Payment refers to a transaction where the payer and the recipient are located in different countries. These payments may involve currency conversion, correspondent banking or additional regulatory checks.

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Crypto Payment

Crypto Payment is a payment made using a cryptocurrency such as Bitcoin, Ethereum or stablecoins. Acceptance varies by merchant and jurisdiction and processing may involve specialised payment providers.

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Currency Conversion

Currency Conversion is the process of converting the value of one currency into another during an international transaction. Rates are determined by market conditions or set by financial institutions.

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DPA (Data Processing Agreement)

DPA (Data Processing Agreement) is a contract outlining responsibilities and requirements between a data controller and data processor under data protection laws such as the UK GDPR.

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DSRP (Digital Secure Remote Payment)

A remote payment method used in mobile wallets where a tokenised version of the card is used to improve security during card-not-present transactions.

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Daily Settlement

Daily Settlement refers to the process where funds from processed transactions are transferred to the merchant’s account every business day, rather than on weekly or monthly cycles.

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Data Breach

Data Breach is an incident where unauthorised individuals gain access to sensitive information such as card details, customer data, or account credentials.

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Decline Code

Decline Code is a numerical or alphanumeric response sent by the issuer or payment provider indicating why a transaction was not approved (e.g., insufficient funds, suspected fraud, or invalid card details).

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Delayed Capture

Delayed Capture is a payment flow where a transaction is authorised first and captured later. This is common in industries such as travel, hospitality and retail logistics.

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Deposit

Deposit is an upfront payment or partial payment made in advance of goods or services being provided.

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Descriptor

Descriptor refers to the text displayed on a customer’s bank or card statement that identifies the merchant or transaction. Clear descriptors help reduce confusion and disputes.

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Device Fingerprinting

A fraud-prevention technique that identifies a user’s device based on characteristics such as browser type, operating system and IP address.

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Digital Wallet

Digital Wallet is an application or service that stores payment credentials electronically and allows users to make payments using a mobile device or online. Examples include Apple Pay, Google Wallet and PayPal.

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Disbursement

Disbursement refers to the payout or distribution of funds from a business to a customer, contractor, supplier or partner.

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Dispute

A dispute occurs when a cardholder questions a transaction on their account, leading to an investigation by the issuer. If unresolved, it may result in a chargeback.

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Dynamic Currency Conversion (DCC)

DCC (Dynamic Currency Conversion) is a service offered at point of sale or during online checkout that allows customers to pay in their home currency rather than the merchant’s local currency.

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Dynamic Descriptor

Dynamic Descriptor is a billing descriptor that can be customised per transaction or per product to help customers recognise specific charges on their statements.

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Dynamic Routing

Dynamic Routing is the process of directing a payment transaction through different acquirers or providers based on predefined rules such as cost, performance, geography or card type.

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EAN (European Article Number)

EAN (European Article Number) is a globally recognised barcode standard used for identifying retail products. It is sometimes used in payments for product cataloguing or inventory-linked transactions.

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EDD (Enhanced Due Diligence )

EDD (Enhanced Due Diligence) involves additional checks performed on higher-risk customers or transactions as part of anti-money laundering procedures.

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EDGE Authentication

A form of risk-based authentication used in certain payment systems to assess transaction risk and determine whether additional customer verification is required.

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EFT (Electronic Funds Transfer)

EFT (Electronic Funds Transfer) refers to the digital transfer of money from one bank account to another without the need for paper documents or physical cash movement.

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EMI (Electronic Money Institution)

EMI (Electronic Money Institution) is a regulated entity permitted to issue electronic money, provide digital payment services and store client funds in safeguarded accounts.

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EMV (Europay, Mastercard, Visa)

EMV refers to the global standard for chip-based payment cards and payment terminals, enhancing transaction security compared with magnetic stripe cards.

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EU Regulation 2015/751 (Interchange Fee Regulation – IFR)

IFR (Interchange Fee Regulation) is EU legislation that caps interchange fees on consumer card payments and introduces rules to increase transparency and competition in the payments industry.

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Ecommerce (Electronic Commerce)

Ecommerce refers to the buying and selling of goods or services over the internet, typically involving online checkout flows and digital payment methods.

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Electronic Invoice

An electronic Invoice is an invoice issued, received and stored in digital format. It can be integrated with payment systems to enable streamlined billing and payment flows.

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Encryption

Encryption is the process of converting data into a secure, unreadable format to protect it during transmission or storage, widely used to safeguard payment information.

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Escrow

A financial arrangement where funds are held by a trusted third party until predefined conditions, such as delivery of goods, are met.

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Exemption (SCA Exemption)

Exemption refers to specific circumstances under which Strong Customer Authentication (SCA) is not required, such as low-value transactions or trusted beneficiaries, subject to issuer acceptance.

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Expiry Date (Card Expiry Date)

Expiry Date is the month and year printed on a payment card, indicating when the card becomes invalid and must be replaced.

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External Payment Provider

External Payment Provider is a payment processor, gateway, acquirer or service connected to a merchant but operated outside the merchant’s own infrastructure or platform.

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FATF (Financial Action Task Force)

FATF is an intergovernmental body that sets global standards for combating money laundering, terrorist financing and related financial crime.

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FPS (Faster Payments Service)

FPS (Faster Payments Service) is a UK payment system that enables near real-time bank transfers between participating banks and financial institutions, typically within seconds.

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FTP (File Transfer Protocol)

A standard network protocol used to transfer files between systems. In payments, FTP is often used for batch reports, reconciliation files or settlement data exchange.

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Fallback

Fallback refers to an alternative payment route or method used when the primary option fails. This may involve switching to a different acquirer, provider or authentication method to complete the transaction.

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Fee Structure

Fee Structure refers to the pricing model applied to payment processing, which may include interchange fees, scheme fees, acquirer fees, gateway fees or service charges.

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FinTech

FinTech refers to technology-driven financial services or companies that use software and digital innovation to deliver payments, banking, lending or financial infrastructure solutions.

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Financial Institution

Financial Institution is an organisation that provides financial services such as banking, payments, credit or money transmission. Examples include banks, EMIs and payment service providers.

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Firewall

Firewall is a security system that monitors and controls incoming and outgoing network traffic, used to protect payment systems and sensitive financial data from unauthorised access.

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First-Party Fraud

First-Party Fraud occurs when a genuine customer misuses their own identity or payment details to commit fraud, such as falsely claiming a transaction was unauthorised or that goods were not received.

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Foreign Exchange (FX)

The process of converting one currency into another. In payments, FX may occur during cross-border transactions, settlement or multi-currency pricing.

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Fraud

Fraud in payments refers to unauthorised or deceptive activity intended to obtain goods, services or funds dishonestly. Common types include card-not-present fraud, account takeover and identity fraud.

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Fraud Detection

Fraud Detection involves identifying potentially suspicious or unauthorised transactions using tools such as rules engines, machine learning, device intelligence and behavioural analysis.

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Fraud Score

Fraud Score is a numerical risk rating assigned to a transaction based on multiple data points. Higher scores indicate a greater likelihood of fraud and may trigger additional checks or decline rules.

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Fulfilment

Fulfilment refers to the process of preparing, packaging and delivering goods to a customer after an order is placed and payment is authorised.

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Funding

Funding describes the movement of money into an account, such as transferring funds into a merchant account, digital wallet or prepaid card balance.

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Funding Instructions

Funding Instructions are details provided to specify how and where funds should be transferred, such as bank account information, reference numbers and settlement identifiers.

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GDPR (General Data Protection Regulation)

A data protection regulation governing how personal data is collected, processed, stored and transferred within the UK and EU. It imposes strict requirements on organisations handling customer information, including payment data.

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GL (General Ledger)

General Ledger is an accounting record that summarises all financial transactions of a business. Payment data may feed into GL systems for reconciliation, reporting and financial control.

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Gateway (Payment Gateway)

Gateway refers to the technology that securely transmits payment information between a merchant’s checkout, the acquirer and the card schemes. It supports transaction authorisation, encryption and communication with payment providers.

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Gateway Timeout

Gateway Timeout occurs when a payment gateway does not receive a response from an acquirer, issuer or provider within the required timeframe, causing the transaction to fail or return an error.

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Geolocation

Geolocation refers to identifying the approximate physical location of a user or device based on IP address or other data. In payments, it may be used for fraud prevention, localisation or compliance checks.

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Gift Card

Gift Card is a prepaid payment instrument that holds a stored monetary value. It can be used as a payment method online or in-store until the balance is used.

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Gross Settlement

Gross Settlement is a settlement process where each transaction is settled individually rather than being netted against others. This method provides finality for each payment but may involve higher liquidity requirements.

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Guaranteed Payment

Guaranteed Payment refers to a payment method or provider model where funds are guaranteed to the merchant once the transaction is approved, reducing the merchant’s risk of non-payment or fraud chargebacks.

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HPP (Hosted Payment Page)

HPP (Hosted Payment Page) is a payment page hosted by a third-party provider. Customers are redirected to this page to enter their payment details, helping reduce PCI DSS scope for the merchant.

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HS Code (Harmonised System Code)

HS Code (Harmonised System Code) is an internationally standardised system of names and numbers used to classify traded products in customs and international trade.

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HSM (Hardware Security Module)

HSM (Hardware Security Module) is a secure physical device used to generate, store and manage cryptographic keys, supporting secure PIN processing, encryption and tokenisation in payments.

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HTTP 3DS Method URL

HTTP 3DS Method URL is part of the 3D Secure protocol that allows issuers to collect device and browser data for risk assessment during the authentication process.

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Hard Decline

Hard Decline is a permanent refusal of a transaction by the issuer, typically due to reasons such as a closed account, invalid card number or suspected fraud. The transaction cannot be retried without new information.

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Hashing

Hashing is a cryptographic process that converts data into a fixed-length value that cannot be reversed, used to protect sensitive information such as passwords or identifiers.

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High-Risk Merchant

High-Risk Merchant describes a business category with elevated fraud, chargeback rates or regulatory scrutiny, such as some travel, gaming or subscription models.

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IBAN (International Bank Account Number)

IBAN is a standardised international bank account format used to identify bank accounts when sending or receiving cross-border payments.

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ICA (Interbank Card Association Number)

A unique identification number assigned by Mastercard to acquirers, processors and other participants in its network for routing and settlement purposes.

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ID Verification (Identity Verification)

ID Verification is the process of confirming that an individual is who they claim to be, often through document checks, biometrics or database lookups.

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IFR (Interchange Fee Regulation)

IFR (Interchange Fee Regulation) is legislation in the UK/EU that caps interchange fees on consumer card payments and sets rules to improve transparency and competitiveness in the payment sector.

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IFSC (Indian Financial System Code)

IFSC is an 11-character code used in India to identify bank branches for domestic transfers such as NEFT, IMPS and RTGS.

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Identity Fraud

Identity Fraud occurs when someone’s personal information is used without permission to access accounts, make payments or bypass security checks.

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Interchange Fee

Interchange Fee is a fee paid by the acquirer to the issuer for every card transaction, set by the card schemes and forming one component of merchant service charges.

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Internal Transfer

Internal Transfer is the movement of funds between two accounts held within the same financial institution.

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International Payment

International Payment refers to a transaction where the payer and recipient are in different countries, often involving foreign exchange, correspondent banking and additional compliance checks.

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Issuer

The financial institution or bank that provides a card to the cardholder and is responsible for authorising or declining transactions.

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JAN (Japanese Article Number)

A barcode standard used primarily in Japan for identifying retail products. It is similar to the EAN system and may appear in international e-commerce and product cataloguing.

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Joint Account

A joint account is a bank account owned by two or more individuals who share legal responsibility for the funds. Payments can typically be made or received by any authorised account holder.

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Jurisdiction

Jurisdiction refers to the legal territory (such as a country, state, or region) whose laws and regulations apply to a financial service, payment or contractual arrangement.

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KBA (Knowledge-Based Authentication)

An identity verification method that asks users questions based on personal information, such as past addresses or account history. It is commonly used in online verification flows.

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KID (Kreditor Identification Number)

KID (Kreditor Identification Number) is a structured reference number used in Nordic countries, particularly Norway, to identify the payer or payment purpose in invoicing and reconciliation.

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Kiosk Payment

Kiosk Payment refers to a payment made via a self-service terminal, often used in transport, ticketing, retail or food service environments.

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Know Your Business (KYB)

KYB (Know Your Business) is the process of verifying the legitimacy and identity of a business entity, including its ownership structure and associated risks. It is part of regulatory compliance for financial and payment institutions.

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Know Your Customer (KYC)

A regulatory requirement involving the verification of a customer’s identity using documents, biometrics or database checks to prevent fraud and financial crime.

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LAN (Local Area Network)

LAN (Local Area Network) is a computer network covering a limited geographic area, such as an office or building. In payments, LANs may support point-of-sale systems and internal processing infrastructure.

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LEI (Legal Entity Identifier)

LEI (Legal Entity Identifier) is a 20-character code used to uniquely identify legal entities involved in financial transactions, required in various regulatory and reporting contexts.

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Late Payment Fee

A charge applied when a customer does not pay an invoice or credit balance by the due date. It is commonly used in lending, billing and subscription models.

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Latent Fraud

Latent Fraud refers to fraudulent activity that is not immediately detected and may only be identified after a period of time, often during chargeback cycles or post-transaction analysis.

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Laundering (Money Laundering)

Laundering is the process of disguising illegally obtained funds as legitimate income through financial transactions. It is addressed under AML regulations.

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Ledger

An accounting record that logs all financial transactions for a business. Ledgers are used for reconciliation, reporting and financial control.

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Liability Shift

Liability Shift is the transfer of responsibility for certain types of fraud losses from one party to another, for example from merchant to issuer after successful 3D Secure authentication.

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Limit Management

The practice of setting and maintaining transaction, account, or risk limits, such as daily spending caps or per-transaction maximums, to manage exposure and comply with internal or regulatory rules.

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Liquidity

Liquidity is the availability of cash or readily accessible funds to meet short-term obligations such as settlement, payouts and operating costs.

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Local Payment Method

A Local Payment Method is a payment option specific to a country or region, such as iDEAL in the Netherlands or BLIK in Poland.

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Loyalty Programme

A rewards scheme where customers earn points, credits or other benefits based on their spending or behaviour, which can later be redeemed for discounts or rewards.

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MAC (Message Authentication Code)

A cryptographic checksum is used to verify the integrity and authenticity of a message or transaction, ensuring it has not been altered.

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MAG (Merchant Aggregator)

MAG (Merchant Aggregator) is a service provider that processes payments on behalf of multiple merchants under a single master account, simplifying onboarding for small businesses or micro-merchants.

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MCC (Merchant Category Code)

MCC (Merchant Category Code) is a four-digit code assigned to a merchant to classify its line of business. It is used for risk assessment, interchange fees, reporting and scheme rules.

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MDR (Merchant Discount Rate)

MDR (Merchant Discount Rate) is the fee a merchant pays to accept card transactions, typically including interchange, scheme fees and acquirer markup.

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MID (Merchant Identification Number)

MID (Merchant Identification Number) is a unique code assigned to a merchant by an acquirer to identify the merchant during payment processing, settlement and reporting.

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MIT (Merchant Initiated Transaction)

A payment initiated by the merchant without the cardholder present (e.g., subscriptions, instalments), based on prior consent.

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MOTO (Mail Order / Telephone Order)

MOTO transactions are card-not-present payments where card details are given over the phone or via written order.

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MPS (Merchant Plug-in Server)

MPS (Merchant Plug-in Server) is software enabling merchants to access 3D Secure authentication services via card scheme directories.

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MRC (Merchant Risk Council)

A global membership group focused on fraud prevention, payments and risk management.

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MRR (Monthly Recurring Revenue)

MRR (Monthly Recurring Revenue) is a predictable monthly income generated from subscription or recurring billing customers.

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MWS (Merchant Web Service)

Refers to APIs provided by a payment processor to perform tasks such as authorisations, refunds and transaction queries.

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Merchant Account

A type of bank or payment provider account that allows businesses to accept and process card payments, receiving settled funds.

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Merchant Dashboard

Merchant Dashboard is an online interface provided by a payment service that allows merchants to view transactions, settlements, performance metrics and account settings.

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Micropayment

A Micropayment is a very low-value transaction, common in digital services, gaming or micro-content purchases.

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Mobile Wallet

A Mobile Wallet is an app storing payment credentials digitally for in-app or contactless payments (e.g., Apple Pay, Google Wallet).

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Mode of Payment

Mode of Payment refers to the method used to pay for goods or services, such as card, bank transfer, wallet or cash.

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Multi-Currency Processing

Multi-Currency Processing allows merchants to accept and process transactions in multiple currencies.

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NACHA (National Automated Clearing House Association)

NACHA is the organisation that oversees the ACH network in the United States and defines the operating rules for electronic bank-to-bank transfers.

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NFC (Near Field Communication)

NFC (Near Field Communication) is a short-range wireless communication technology used to enable contactless payments between cards or devices and payment terminals.

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NLP (Natural Language Processing)

NLP (Natural Language Processing) is a field of artificial intelligence that allows computers to understand and process human language. In payments, it can be used for chatbots, customer support and analysing unstructured data.

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NPP (New Payments Platform)

Australia’s real-time payments infrastructure allows participating institutions to send and receive payments with richer data almost instantly.

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NYCE (New York Currency Exchange)

NYCE is a US-based electronic funds transfer (EFT) debit network that processes ATM and point-of-sale debit card transactions.

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Negative Balance

A Negative Balance occurs when more funds are withdrawn from an account than are available, resulting in a balance below zero. This can be caused by fees, chargebacks or overdrafts.

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Negative File

A list of accounts, cards, merchants or identifiers that have been flagged due to fraud, chargebacks or other issues and are therefore blocked or restricted.

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Net Settlement

Net Settlement is a process where multiple transactions are aggregated and only the net amount owed between parties is transferred, rather than settling each transaction individually.

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Network Token

A tokenised replacement for a card number generated by card schemes (such as Visa or Mastercard) to secure digital and recurring payments and reduce exposure of the underlying PAN.

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Network Tokenisation

Network Tokenisation is the process of replacing a card’s primary account number (PAN) with a scheme-generated network token for use in digital transactions, helping to improve security and sometimes approval rates.

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Nudge Messaging

Nudge Messaging refers to prompts or reminders designed to encourage users to complete an action, such as finishing a checkout, updating payment details or retrying a failed payment.

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OCT (Original Credit Transaction)

OCT (Original Credit Transaction) is a card scheme method that allows funds to be pushed to a card, often used for payouts or refunds.

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OData (Open Data Protocol)

A standard protocol for querying and updating data via RESTful APIs.

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OLO Payment (One-Leg-Out Payment)

OLO Payment refers to a payment where one party is inside a regulated region (e.g., EU) and the other is outside it.

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OMS (Order Management System)

OMS (Order Management System) tracks orders, inventory, fulfilment and payment status across the purchase lifecycle.

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OTP (One-Time Password)

OTP (One-Time Password) is a single-use code used for authentication in payments or account access.

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Offline Authorisation

Offline Authorisation occurs when a terminal approves a transaction without contacting the issuer in real time.

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Offline PIN

Offline PIN is a cardholder verification method where the chip on the card validates the PIN instead of the issuer.

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Omnichannel Payments

Omnichannel Payments allow customers to pay seamlessly across online, in-store, mobile and other channels with unified reporting.

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On-Us Transaction

An On-Us Transaction is where the issuer and acquirer are the same institution, allowing faster processing.

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Open Banking

Open Banking allows customers to share financial data or initiate payments via secure APIs.

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Open Loop System

A payment system usable across different merchants or platforms (e.g., Visa, Mastercard).

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Operational Resilience

Operational Resilience is the ability of an organisation to prevent, adapt to and recover from disruptions.

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Optimisation (Payment Optimisation)

Payment Optimisation refers to improving acceptance, routing, authentication, costs or checkout performance.

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PAN (Primary Account Number)

The long card number printed on the front of a payment card, used to identify the card issuer and the individual account.

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PCI DSS (Payment Card Industry Data Security Standard)

A global security standard designed to protect cardholder data and ensure secure handling of payment information.

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PDP (Product Detail Page)

PDP (Product Detail Page) is the webpage that displays a product’s key information before it is added to cart, often influencing conversion rates in ecommerce.

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PDS2 (Payment Services Directive 2)

PSD2 (Payment Services Directive 2) is EU/UK regulation that governs electronic payments, introduces Strong Customer Authentication (SCA) and enables Open Banking.

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PISP (Payment Initiation Service Provider)

PISP is an authorised third party under Open Banking that initiates payments directly from a customer’s bank account with their consent.

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PIV (Personal Identity Verification)

PIV (Personal Identity Verification) is an authentication method based on verifying a user’s identity using credentials stored on a smart card or secure device.

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PKI (Public Key Infrastructure)

The system of certificates, cryptographic keys and trusted authorities used to secure digital communications.

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POS (Point of Sale)

POS (Point of Sale) refers to the physical or digital location where transactions occur, such as a checkout terminal or e-commerce checkout flow.

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PSP (Payment Service Provider)

A company that enables merchants to accept payments, often providing gateway, processing, routing and settlement services.

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PUR (Purchase Return)

PUR (Purchase Return) is a transaction type indicating a refund or reversal of a previous purchase.

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Payment Acquirer (Acquirer)

A Payment Acquirer is a financial institution that processes card payments on behalf of merchants and connects them to the card schemes.

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Payment Attempt

A Payment Attempt is any try by a customer or a system to process a transaction, regardless of whether it is successful, declined or fails.

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Payment Authorisation

Payment Authorisation is the step where the issuer approves or declines a transaction request before funds are captured.

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Payment Facilitator (PayFac)

A service provider that enables sub-merchants to accept payments under a single master merchant account.

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Payment Gateway

A Payment Gateway securely transmits payment data between the merchant, the acquirer and card schemes.

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Payment Method

A Payment Method refers to the way a customer pays. For example, card, bank transfer, wallet, or BNPL.

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Payment Orchestration

Payment Orchestration is the coordinated routing and management of payment flows across multiple providers, acquirers and payment methods.

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Payment Processor

A Payment Processor is the technical intermediary that handles the authorisation, clearing and settlement of transactions between the merchant, acquirer and issuer.

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Payment Reference

A Payment Reference is an identifying string included in a transaction to facilitate reconciliation.

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Payment Routing

Payment Routing is directing a transaction through a specific acquirer or provider based on rules such as cost, performance, geography or card type.

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Payout

A Payout is a disbursement of funds from a business to a customer, supplier, contractor or partner.

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Posted Transaction

A Posted Transaction is a payment that has completed authorisation and has been added to the customer’s account statement or balance.

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Pre-Authorisation (Pre-Auth)

Pre-Authorisation temporarily reserves funds on a customer’s account without capturing them immediately, used often in travel, hospitality or rentals.

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Prepaid Card

A Prepaid Card is a payment card loaded with funds in advance. It can be used until the balance is depleted.

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Processing Fee

A Processing Fee is a charge associated with handling a payment, typically covering acquirer, scheme and processor costs.

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Push Payment

A Push Payment is initiated by the payer, sending funds to the recipient (e.g., bank transfers, ACH credits, OCTs).

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QR Code (Quick Response Code)

A QR Code is a machine-readable square barcode that can store information such as URLs or payment details. In payments, QR codes are widely used for wallet payments, bank transfers, invoice payments and in-store digital checkout.

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QSA (Qualified Security Assessor)

QSA (Qualified Security Assessor) is a professional or firm certified by the PCI Security Standards Council to assess and validate an organisation’s compliance with PCI DSS.

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Quarantine Payment

A transaction that has been temporarily held, isolated or flagged for manual or automated review due to potential risk, suspected fraud or compliance concerns.

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Query API

A Query API is an interface that allows systems or merchants to request information from a payment platform, such as transaction status, settlement details, customer records or reporting data.

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Queued Transaction

A Queued Transaction is a payment that has been placed in a queue for later processing, often due to system load, network issues, offline operation or scheduled batch runs.

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RBAC (Role-Based Access Control)

A security model where user permissions are assigned based on defined roles within a system, used to manage access to dashboards, payment tools and sensitive financial data.

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RGCS (Refund Guarantee Chargeback Scheme)

RGCS is a scheme-level mechanism used in some markets to manage or guarantee refunds related to disputed transactions.

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RTS (Regulatory Technical Standards)

RTS (Regulatory Technical Standards) are detailed rules under PSD2 that define how Strong Customer Authentication (SCA) and secure communication must be implemented.

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Real-Time Payment

A Real-Time Payment is a bank transfer processed instantly or within seconds, with immediate confirmation for both the sender and the recipient.

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Recurring Payment

A repeating transaction made on a schedule (e.g., monthly subscriptions), usually based on a prior mandate or stored payment method.

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Refund

A Refund returns funds to a customer after a purchase is cancelled, disputed or adjusted.

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Retrieval Request

A request from the issuer to the acquirer or merchant for more information about a transaction, often preceding a dispute or chargeback.

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Reversal (Payment Reversal)

A Reversal is the cancellation of a transaction before it has been fully settled, returning the funds to the cardholder or payer.

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Risk Engine

A Risk Engine is a system that analyses transactions, behavioural data and risk signals to identify fraud or suspicious activity in real time.

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Risk Score

A Risk Score is a numerical value assigned to a transaction, user or merchant to indicate the likelihood of fraud or risk exposure.

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Routing Logic

Routing Logic refers to the rules that determine how a payment is directed to a specific acquirer or provider, based on factors like cost, card type or geography.

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SAR (Suspicious Activity Report)

SAR is a mandatory report submitted to financial authorities when suspicious or potentially criminal financial activity is detected.

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SCA (Strong Customer Authentication)

A regulatory requirement under PSD2 that requires multi-factor authentication for many electronic payments to reduce fraud.

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SDK (Software Development Kit)

SDK (Software Development Kit) is a set of tools, code libraries and documentation used by developers to integrate payment functionality into apps or websites.

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SEPA (Single Euro Payments Area)

SEPA (Single Euro Payments Area) is an EU/EEA initiative enabling simplified euro bank transfers across participating countries using standardised rules.

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SMS OTP (Short Message Service One-Time Password)

A single-use passcode sent via SMS for authentication, often used in 3D Secure, login flows or account verification.

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SWIFT (Society for Worldwide Interbank Financial Telecommunication)

SWIFT is the international messaging network used by banks for secure financial communication, including payment instructions.

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Settlement

Settlement is the process of transferring funds from the acquirer to the merchant after transactions have been authorised and cleared.

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Settlement Delay

Settlement Delay occurs when there is a lag between transaction processing and the merchant receiving funds, often due to processing windows, risk holds or banking schedules.

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Settlement File

A Settlement File is a structured report detailing the transactions and amounts included in a settlement batch.

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Soft Decline

A Soft Decline is a temporary refusal of a transaction by the issuer, often due to authentication issues or technical failures and may succeed if retried.

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Standing Order

A Standing Order is an instruction allowing a bank to make regular, fixed payments to a recipient automatically.

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Strong Match (AVS Strong Match)

A Strong Match occurs when the address verification service (AVS) returns a result indicating that both numeric elements of the address (postcode and street number) match the issuer's records.

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Sub-Merchant

A merchant operating under a payment facilitator (PayFac) master account rather than holding its own direct acquiring relationship.

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Subscription Payment

A Subscription Payment is a recurring charge made on a scheduled basis for ongoing access to goods or services.

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Surcharging

Surcharging is the practice of adding an extra fee to a transaction when a customer uses a specific payment method, subject to legal restrictions in many jurisdictions.

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Switching Fee

A Switching Fee is charged when a transaction is routed through certain payment networks or switching services.

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Synthetic Identity Fraud

Synthetic Identity Fraud involves creating a false identity using a mix of real and fabricated information to commit financial fraud.

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TAC (Terminal Authentication Certificate)

A digital certificate used to authenticate a payment terminal within secure card networks or EMV environments.

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TAV (Transaction Availability Validation)

TAV (Transaction Availability Validation) is a method used to validate the availability or eligibility of a transaction before it is fully processed.

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TID (Terminal Identification Number)

A unique identifier assigned to a payment terminal so that transactions can be tracked, authenticated and reconciled.

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Token

A Token is a substitute value that replaces sensitive payment data (such as a PAN) to secure transactions without exposing the underlying card number.

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Tokenisation

Tokenisation is the process of replacing sensitive payment data with non-sensitive tokens to reduce exposure to fraud and improve security.

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Transaction ID

A Transaction ID is a unique identifier generated for each transaction, used for tracking, reconciliation and support queries.

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Transaction Lifecycle

Transaction Lifecycle refers to the stages a payment goes through from initiation to authorisation, clearing, settlement and potential dispute.

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Transaction Routing

The process of directing a payment to a particular provider or acquirer based on rules like cost, performance, currency or geography.

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TransferWise (now Wise)

TransferWise (Wise) is a global payment provider that enables low-cost international money transfers, now operating under the brand “Wise.”

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Treasury Management

Treasury Management refers to how businesses manage liquidity, payments, cash flow forecasting and financial risk at the organisational level.

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Trial Payment

A Trial Payment is a small initial charge used to test a payment method in subscription or recurring billing models before full billing begins.

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Two-Factor Authentication (2FA)

2FA (Two-Factor Authentication) is an authentication method requiring two separate elements (e.g., password + OTP) to verify user identity.

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Txn (Transaction)

Txn is a commonly used abbreviation for the word “transaction,” appearing in logs, dashboards and technical systems.

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UAT (User Acceptance Testing)

The final phase of testing where real users validate that a payment system or feature works as intended before going live.

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UBO (Ultimate Beneficial Owner)

UBO (Ultimate Beneficial Owner) refers to the natural person(s) who ultimately own or control a business, relevant in KYB and AML compliance.

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UCN (Unique Customer Number)

An identifier assigned to a customer within a payment or banking system for tracking and verification purposes.

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UCOF (Unscheduled Credential on File)

A type of merchant-initiated card transaction made without the cardholder present and without a set schedule, based on previously stored payment credentials.

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UDD (Unpaid Direct Debit)

UDD (Unpaid Direct Debit) occurs when a direct debit instruction cannot be completed, usually due to insufficient funds or account restrictions.

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UI (User Interface)

UI (User Interface) is the visual layer of a payment system or checkout flow that customers interact with.

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URL (Uniform Resource Locator)

A URL is the address used to identify webpages or API endpoints, including those used in payment integrations.

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UTR (Unique Transaction Reference)

UTR is a unique identifier assigned to bank transfers (e.g., in India’s NEFT/IMPS/RTGS systems) to track and confirm payments.

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Unbanked

Unbanked individuals lack access to traditional banking services and therefore often rely on alternative financial tools or cash-based payments.

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Underwriting (Merchant Underwriting)

Underwriting is the process of assessing the risk profile of a merchant before allowing them to process payments.

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Unilateral Payment

A payment made without requiring reciprocal financial action from the recipient, such as a one-way transfer or payout.

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Unlocking Fee

An Unlocking Fee is a charge applied to restore access to a payment service or account after it has been restricted or suspended.

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Unmatched Transaction

An Unmatched Transaction is a payment record that cannot be paired with corresponding settlement or order data during reconciliation.

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Unpaid Invoice

An Unpaid Invoice is a bill that has been issued but not yet settled by the customer.

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Uptime

Uptime is the percentage of time a payment system or service remains operational and available.

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User Authentication

The process of verifying a customer’s identity before allowing account access or completing a payment.

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VA (Virtual Account)

VA (Virtual Account) is a unique, digital-only bank account reference assigned to a payer or transaction to automate reconciliation and track incoming payments.

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VAN (Visa Account Number)

VAN is the primary account number associated with a Visa payment card, used for identifying the cardholder’s account.

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VCN (Virtual Card Number)

VCN (Virtual Card Number) is a single-use or limited-use card number generated to replace a physical card number for secure online or corporate payments.

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VPA (Virtual Payment Address)

VPA is a unique identifier used in some real-time payment systems (such as India’s UPI) to send or receive payments without sharing bank details.

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Velocity Check

A fraud prevention control that monitors how often a user, card, or account performs actions (e.g., number of payment attempts) within a certain timeframe.

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Verification Code

A Verification Code is a numeric or alphanumeric value used to confirm a user’s identity or authorise a transaction (e.g., OTP, CVV).

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Verification Flow

The series of steps a customer goes through to verify identity, account ownership or payment details.

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Virtual Terminal

A Virtual Terminal is an online interface that allows merchants to manually enter card details to process card-not-present transactions.

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Visa Direct

Visa Direct is Visa’s push-payments solution enabling near real-time transfers to eligible Visa cards and accounts.

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Voice Authorisation

Voice Authorisation is a manual process where a merchant calls an issuer or acquirer to request approval for a card transaction.

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Void Transaction

The cancellation of a payment before it has been captured or settled, preventing funds from moving.

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WAF (Web Application Firewall)

A security tool that monitors, filters, and blocks malicious traffic to web applications, protecting online payment flows and checkout pages.

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Wallet Payment

A Wallet Payment is a transaction completed using a digital or mobile wallet such as Apple Pay, Google Wallet or PayPal.

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Webhook

A Webhook is a real-time notification sent from one system to another when an event occurs, such as payment success, failure or refund creation.

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Whitelist

A Whitelist is an approved list of IPs, domains, cards or users that are permitted to access a service or bypass certain risk checks.

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Wire Transfer

A Wire Transfer is a bank-to-bank electronic payment, typically used for high-value or international transfers.

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Withdrawal

The removal of funds from an account, such as transferring money from a platform, wallet or merchant balance to a bank account.

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Workflow Automation

Workflow Automation refers to automating operational processes such as reconciliation, risk checks, onboarding or payout scheduling within payment systems.

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Write-Off

The accounting process of recognising that a receivable (such as an unpaid invoice or failed direct debit) is unlikely to be collected.

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XID (Transaction Identifier for 3D Secure 1)

A unique value generated during 3D Secure 1 authentication to identify the authentication request. It is passed between the merchant, directory server and issuer.

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XML (Extensible Markup Language)

XML is a structured data format used for transmitting information between systems. In payments, XML is common in settlement files, bank instructions and API integrations.

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XPAY (Cross-Payments / External Pay Services)

XPAY is a general term used by some providers to describe services supporting cross-border or external payment processing, allowing businesses to accept payments across multiple markets or channels.

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XSS (Cross-Site Scripting)

XSS is a security vulnerability where malicious scripts are injected into webpages. Payment pages must be protected from XSS to prevent data theft or manipulation.

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YTD (Year-To-Date)

YTD refers to financial or operational metrics accumulated from the beginning of the calendar or financial year up to the current date, commonly used in reporting dashboards and payment performance analysis.

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Yield Rate

Yield Rate in payments refers to the percentage of successfully completed transactions out of all attempted ones, often used as a KPI to measure checkout performance or routing effectiveness.

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Youth Account

A bank or payment account designed specifically for minors, often with spending limits, parental controls or restricted payment features.

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YubiKey

A YubiKey is a physical security key used as a strong authentication factor, often for securing access to payment systems, dashboards or developer environments.

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ZATCA (Zakat, Tax and Customs Authority)

ZATCA is the regulatory authority in Saudi Arabia responsible for tax, customs and e-invoicing compliance. In payments, ZATCA standards may affect invoicing formats and reporting.

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ZIP (Buy Now, Pay Later Provider)

ZIP is a buy now, pay later (BNPL) service offering instalment-based payments for online and in-store purchases.

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ZKP (Zero-Knowledge Proof)

ZKP is a cryptographic method that allows one party to prove knowledge of information without revealing the information itself, used in advanced authentication and privacy-preserving payment solutions.

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Zero-Auth (Zero-Amount Authorisation)

An authorisation request for a value of £0 used to validate a card before charging it. It confirms card validity without reserving funds.

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Zero-Day Vulnerability

A Zero-Day Vulnerability is a security flaw that is unknown to the system vendor and has no available patch, posing high risk to payment systems and infrastructure.

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Zero-Rating

Refers to goods or services that are taxed at a 0% VAT rate, affecting invoice and payment calculations.

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Zeroisation

The secure deletion of cryptographic keys and sensitive data from hardware security modules (HSMs) or other secure devices to prevent unauthorised use.

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eID (Electronic Identification)

eID (Electronic Identification) is a digital method used to confirm a customer's identity, often employed in regulatory onboarding, authentication or eGovernment services.

Utility Classes

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