Payments Dictionary

Acronyms List

Terms List

3-D Secure (3DS)

Advanced authentication solution; an XML-based protocol that is designed to add an extra layer of security for online credit and debit card transactions. The major global payment networks use this common protocol to authenticate purchases across three domains (3-D): the acquiring bank, the issuing bank, and an interoperability protocol, which taken together made up 3-D Secure. Refer to our 3-D Secure guide.

3-D Secure 2.0 (3DS2)

The new global specification for card payment security developed by EMVCo. It is designed to deliver frictionless payment authentication across a range of devices, including mobile devices. Unlike previous versions of 3DS, it allows for more seamless integration with merchants’ e-commerce customer experiences. 3DS 2.0 is being deployed across Europe starting in September 2019. For information on the previous version, see 3-D Secure.

Account Information Service Providers (AISP)

AISPs offer online services which can provide a consolidated view of a consumer’s payment accounts.

Account Updater

Card brand product, available through a payment processor, that provides updated account numbers, expiration dates, account status, and cardholder contact information to merchants.

Acquirer

An acquirer (also known as acquiring bank) is a bank or financial institution that processes credit or debit card payments on behalf of a merchant and is licensed to settle funds to the merchant.

Address Verification Service (AVS)

Method of validating the cardholder’s address against the address held by the issuer, with the purpose to help reduce fraudulent transactions. The issuer will return a code specifying the accuracy of the address.

Alternative Payment Method

These are payment methods that are used as an alternative to mainstream credit and debit cards. Some examples would include: wire transfer, online banking meth, and many others.

American Express

American Express (also known as Amex), a multinational financial services corporation, is a credit card used in many countries, most popularly the United States, where it accounts for approximately 24% of the total dollar volume of credit card transactions.

Authorization

Verification of the validity of a shopper’s card (credit or debit) and the available balance on the shopper’s line of credit.

Bank Identification Number (BIN)

The first four to six digits of a card that identifies the institution issuing the card.

Bank Transfer

A bank transfer is a general term used to represent a wide range of payments that are credit transfers: such as cash payments and wire transfers. These transfers are always made through an associated bank.

Cadence

A set of communication rules that can be used to automate any customer billing scenario.

Capture

Merchant submission for payment from the Issuer on an authorized transaction after the goods/services have been rendered to the shopper

Card Not Present (CNP)

Transaction in which a card (credit or debit) is physically not present at the time of the sale. The merchant does not see or swipe the card and no shopper signature is obtained. These transactions will typically be done online or via the telephone.

Card on File

For repeat shoppers or for shoppers with subscriptions, you can obtain your shopper's consent to store their card information for future purchases and then flag each transaction as a single purchase or as a regularly scheduled subscription.

Card Present

Transaction type in which a card (credit or debit) is physically present at the point of sale. The merchant will physically swipe the card and obtain signature from the shopper.

Card Verification Value (CVV)

Numeric value found on the back of Visa, Mastercard and Discover cards (3 digits) or the front of American Express cards (4 digits). CVV acts as a security feature designed to mitigate fraud on card not present transactions.

Chargeback

A chargeback is the process initiated by a cardholder when they contact their issuing bank to dispute a transaction on their account. Once initiated, the funds are debited from the merchant and returned to the shopper. A chargeback can be initiated for reasons such as fraud, goods damaged/not received, etc.

Credit Card

Plastic payment card accepted as a payment method by merchants. Users are able to pay balances off over time, with interest added to the outstanding balance.

Cross-Border Payments

Payments originating from a shopper in one country to a merchant located in a different country.

Customer Lifetime Value

Prediction of the net profit attributed to the entire future relationship with a customer.

Customer-Initiated Transaction (CIT)

A transaction in which the customer provides their payment information. Types of CIT include: card present, card on file, and MOTO.

Debit Card

Plastic payment card linked to the cardholders’ bank account. When a debit card is used as the method of payment, the funds are immediately taken from the shopper’s bank account.

E-Wallet

An e-wallet is a secure environment that allows a person to store multiple payment cards and bank account numbers. This eliminates the need for customers to enter in their account information multiple times when making a payment. Examples of e-wallets are: Apple Pay and Samsung Pay.

Europay Mastercard Visa (EMV)

The chip card transactions improve protection against fraud when compared to traditional magnetic stripe credit cards. EMV can be used for credit and debit card transactions and most recently, NFC mobile payments. Unlike its predecessors, EMV-enabled cards use a smart chip, instead of a magnetic stripe, to hold the data required to complete a purchase.3

European Banking Authority (EBA)

An independent European Union Authority that help to maintain financial stability in the EU by managing European banking regulations.

European Economic Area (EEA)

The countries that are part of the EEA include Austria, Belgium, Bulgaria, Czech Republic, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.

Gateway

The service that automates the payment transaction between the shopper and an online merchant. The payment gateway is the connection that allows a merchant to accept credit card and other forms of electronic payment.

General Data Protection Regulation (GDPR)

This regulation came into final force on 25-May-2018 and replaces the various regulations and national laws that were in place across the European Economic Area (EEA) and the UK previously. It increases the level of control EEA and UK citizens/residents have over their personal data in the new digital age and presents a more unified environment for international business across Europe. The Regulation impacts any business that receives, processes, stores or transfers personal data of EEA or UK-based individuals, regardless of its location.

Intelligent Payment Routing

Automatic transaction routing between multiple acquiring banks to assure maximum success rates.

Issuer

Financial institution that issues credit and debit cards to customers.

Mail Order Telephone Order (MOTO)

A purchase made by the customer by mail or by phone.

Mastercard

Mastercard is a major credit card and debit card /company that administers and regulates the use of Mastercard credit and debit cards between issuing banks and merchants.

Merchant-Initiated Transaction (MIT)

A transaction initiated by the merchant without the customer being involved in the current transaction, such as a recurring subscription charge.

Mobile Payments

Mobile payments usually refer to payments done via the use of a mobile device. However, the payment methods used to pay, and the technology they use could be many: mobile wallets, single card NFC payments, alternative payment methods such as bank transfers.

Omnichannel

Omnichannel is a multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is buying from a desktop, mobile device, telephone, etc.

Pay by Bank (Open Banking)

An open banking payment method that lets a shopper transfer funds from their bank account directly to a merchant account. When a shopper selects Pay by Bank during checkout, they are redirected to their online banking portal. The shopper authenticates with their usual banking credentials and authorizes the transaction from the portal. When the shopper is done, they are redirected back to the merchant site.

Payment Card Industry (PCI)

PCI is a Data Security Standard, a set of requirements designed to ensure that all companies that process, store and/or transmit credit and debit card information maintain a secure environment.

Payment Initiation Service Providers (PISP)

PISPs initiate payment transactions at the request of the consumer from an account held by the consumer at another payment service provider.

Payment Processor

Payment processors are the financial institutions that work in the background to provide the core payment processing services used by an online merchant. These core processing services include authorization and refunding of transaction requests. Payment processors usually have partnerships with other companies, such as BlueSnap, who directly deal with merchants to handle all the processing needs.

Payment Service Provider (PSP)

A company that provides businesses and organizations with the ability to accept a variety of payment methods including credit/debit cards, ACH/ECP, SEPA, eWallets, and so on. For more details refer to: Payment Types/Methods

Payments Intelligence

The ability to better know and understand customers through data and information uncovered from the way they choose to pay.

Prepaid Credit Card

Secured credit card (usually branded with the logo from a major card scheme) carrying a pre-deposited amount. The card is then used as a credit card until the funds run out.

Presentment Currency

The currency in which the shopper purchases goods/services from the merchant.

Recurring Billing

Allows a merchant to charge a customer’s credit or debit card on a regular basis for recurring services such as membership fees and subscriptions.

Refund

A credit to a cardholder, usually due to remediate the return of a goods/service.

Revised Directive on Payment Services (PSD2)

A mandate that governs regulated payment service providers within the European Union and the European Economic Area. It is designed to increase competition and participation in the European payments system for merchants and other stakeholders.

Secure Remote Commerce (SRC)

An industry standard for secure checkout. For more information, refer to the EMVco site.

Settlement Currency

The currency the merchant receives funding in.

Strong Customer Authentication (SCA)

A key mandate that’s included in the PSD2 within the European Economic Area that requires electronic payments initiated by the buyer to be authenticated by at least two independent factors.

Three Domain Secure (3DS)

See 3-D Secure

Transaction Risk Analysis (TRA)

An evaluation of a transaction based on a predetermined set of criteria to determine if the transaction poses a low level of risk.

Velocity Check

This is a method used to detect fraud by looking a number of times at a particular data element (card number, name, address, etc.) within a predetermined time frame.

Visa

Visa is a major credit card and debit card company that administers and regulates the use of Visa credit and debit cards between the issuing banks and merchants.

Wire Transfer

A wire transfer is an electronic payment service for transferring funds by wire, for example through SWIFT, the Federal Reserve Wire Network or the Clearing House Interbank Payments System.

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