Payment terms, decoded .
Every acronym, rail, and mechanism in modern payments — explained in plain language. 140 terms and counting.
140 terms
A
- Abandonments Shopping cart abandonment is when a customer puts a product into a shopping cart but does not place an order.
- Acceptance rate Acceptance rate is the percentage of payment attempts successfully accepted after authorisation, risk checks, authentication, and technical processing.
- Account-to-account payments (A2A) Account-to-account payments move money directly from one bank account to another without using card networks.
- ACH payment An ACH payment is an electronic bank transfer processed through the Automated Clearing House network in the United States.
- Acquirer The acquiring bank or acquirer is a financial institution that enables merchants to accept online payments by opening merchant accounts for them.
- Acquirer reference number (ARN) An acquirer reference number, or ARN, is a unique transaction reference used to track card payments and refunds through the acquiring and card network flow.
- Affiliate payment processing Affiliate payment processing is the fuel that drives affiliate marketing. Without the ability to make payments to affiliates, merchants won’t be able to benefit from this powerful business growth channel.
- Alternative payment method An alternative payment method is any payment method that does not rely on traditional card payments. Learn what APMs are and why businesses offer them.
- API API, or application programming interface, is one of the essential technical terms in programming. It signifies a documented interface that allows applications to exchange information and use each other`s data or functionality to work.
- Authorization Payment authorization is the process of checking whether a transaction can be approved before funds are captured or settled.
- Authorization hold An authorization hold is a temporary reservation of funds on a customer’s account before a payment is captured, cancelled, or released.
- Authorization rate Authorization rate is the percentage of payment attempts approved by issuers or payment providers out of all submitted authorization requests.
- Automatic payments Automatic payments are payments that are automatically debited from the payer's bank account on a certain date/period for a specified amount.
- AVS (address verification) AVS is a fraud prevention check that compares a customer’s billing address with the address held by the card issuer.
B
- B2B payment processing B2B payment processing refers to how a business that works with other businesses handles its transactions. Let’s divide the term into two parts.
- Bank identification number (BIN) A bank identification number or BIN is a 6-digit number that identifies the card issuer within the payment system during authorisation and processing.
- Bank payment processing Bank payment processing greatly simplifies paying for purchases online. Transaction processing occurs almost instantly, which is convenient for both the business and the client.
- Betting payment processing Sports betting payments refer to the methods and systems that enable secure deposits, withdrawals, and fraud protection in online betting platforms.
- BIN attack A BIN attack is a type of payment fraud where criminals test card number combinations using the same Bank Identification Number.
- BIN sponsorship Learn what BIN sponsorship is, how it enables PSPs and fintechs to issue payment cards without direct card scheme membership, and why it's a common path to launching card programmes.
- Bitcoin as a payment method Many companies that have already implemented Bitcoin as a payment method liked the safety of online payments, the absence of fraud and chargebacks, as well as low transaction fees.
- Bitcoin payment gateway Integrating a crypto payment gateway into a payment system is of utmost importance for merchants looking to expand globally.
- Blockchain in payment processing The use of blockchain in payment processing helps to mitigate operational risks during payments processing due to a distributed ledger-based accounting system.
- Business identifier code Business identifier code or BIC is essential while making cross-border payments.
- Buy now pay later (BNPL) Buy now, pay later is a payment method that allows customers to make purchases immediately and pay for them over time in installments or through deferred payments.
C
- Card network A card network is an organisation that operates the rules and infrastructure for card payments.
- Card on file Card on file means a merchant stores a customer's card details or payment token for future authorized payments.
- Card validation code (CVC/CVV) CVC or Сard Validation Code and CVV or Card Verification Value are 3-digit security authentication numbers printed on the back of payment cards.
- Card vault A card vault is a secure system for storing payment card information and generating tokens for future transactions, without exposing sensitive card data.
- Casino payment methods Find out what are the most popular casino payment methods and how to choose the best ones.
- CESOP CESOP is the EU Central Electronic System of Payment information used to collect and analyse cross-border payment data for VAT fraud detection.
- Chargeback A chargeback is a card payment dispute where funds may be returned to the cardholder. Learn why chargebacks happen, how they work, and how merchants can reduce them.
- Chargeback ratio Chargeback ratio is a metric that shows how many chargebacks a merchant receives compared with its total transaction volume.
- Checkout In online shopping, checkout is a page, or a set of pages customers see as they proceed to the purchase.
- Co-branded card Co-branded credit cards are financial products created by banks and partner brands, designed to provide special rewards, loyalty points, and exclusive offers.
- Crypto payment processing Cryptocurrency payment processing lets businesses accept crypto payments and settle in crypto or fiat. Learn how crypto payment gateways work, their benefits, risks, and key features.
- Customer-initiated transaction (CIT) A customer-initiated transaction is a payment started by the customer during an active checkout or payment session.
D
- Decline codes Decline codes are response codes that explain why a payment transaction was rejected by an issuer, acquirer, processor, or payment provider.
- Decline recovery Decline recovery is the process of reducing failed payments by retrying, rerouting, or adjusting payment flows after a transaction is declined.
- Device fingerprinting Device fingerprinting is a fraud-prevention technique that identifies devices by their characteristics to detect suspicious activity and reduce payment fraud.
- Direct debit Direct debit is a payment method that allows a business to collect funds from a customer's bank account with the customer's prior authorisation.
- Dynamic currency conversion (DCC) Dynamic currency conversion lets customers pay in their home currency while the merchant receives the payment in another currency.
E
- E-billing E-billing or electronic billing is a paperless and automated invoicing and billing process that requires minimum time and manual input.
- E-commerce payment processing E-commerce payment processing is a must for all companies or stores that sell their products or services online.
- EDI payments EDI payments use Electronic Data Interchange to exchange payment-related documents such as invoices, purchase orders, and remittance data in a standardised digital format.
- Electronic funds transfer (EFT) Electronic funds transfer (EFT) is the process of transferring money electronically from one bank account to another.
- Embedded payments Embedded payments let platforms, marketplaces, and software products integrate payment acceptance directly into their user experience.
- EMI license An EMI license allows a company to issue electronic money, store customer balances, and provide related payment services.
F
- False decline A false decline is a legitimate payment that is incorrectly rejected because it is mistaken for a risky or invalid transaction.
- Fraud scoring Fraud scoring is a risk assessment method that assigns a score to a transaction, customer, or merchant based on the likelihood of fraud.
- Freelancer payment methods Freelancers cooperate with a number of customers – individual entrepreneurs, self-employed people, and legal entities. This implies certain challenges in payments and this is what freelancer payment methods are for.
- Friendly fraud Friendly fraud happens when a customer disputes a legitimate payment, often claiming they did not authorise the transaction or receive the product.
I
- Independent sales organization (ISO) An Independent Sales Organization, or ISO, is a third-party company that sells merchant payment services on behalf of acquirers, processors, or PSPs.
- Interchange fees Interchange fees are transaction fees paid between banks during card payments.
- Interchange++ pricing Interchange++ pricing is a card payment pricing model that separates interchange fees, scheme fees, and provider markup.
- International payment gateway International payment gateway solutions allow merchants to process global transactions, accept different currencies, and ensure secure cross-border payments.
- Issuer An issuer, or issuing bank, provides payment cards, manages cardholder accounts, and approves or declines card transactions. Learn how issuers work in payment processing.
K
- Know your business (KYB) KYB is a verification process financial institutions and payment providers use to confirm a company's identity, ownership, and legitimacy before providing services.
- Know your customer (KYC) KYC is the verification of clients' data, usually by financial institutions in order to protect them against fraud, corruption, money laundering, etc.
L
- Liability shift Liability shift is the transfer of financial responsibility for certain fraudulent or disputed transactions from one payment party to another.
- Local acquiring Local acquiring means processing payments through an acquirer located in the same country or region as the customer or transaction.
M
- Mastercard SecureCode Mastercard SecureCode is an authentication service that protects bank cards from unauthorised withdrawals during online purchases with a unique security code.
- MATCH list (TMF) The MATCH list, also known as TMF, is a Mastercard database used by acquirers to identify merchants terminated for certain risk or compliance reasons.
- Merchant account A merchant account is a type of business bank account intended to accept electronic payments from customers.
- Merchant account payment processing The concept of a merchant account is all about online payments processing. The process of opening it involves the registration of an account for a legal entity in a banking institution to accept payments from Mastercard, Visa, and other payment systems.
- Merchant bank A merchant bank is a financial institution primarily focusing on international trade transactions.
- Merchant category code (MCC) A merchant category code, or MCC, is a four-digit code that identifies the type of business or activity a merchant is involved in.
- Merchant discount rate (MDR) Merchant discount rate is the fee a merchant pays to accept card or digital payments, usually calculated as a percentage of each transaction.
- Merchant identification number (MID) A merchant identification number, also known as MID, is a unique set of characters that identifies the business to a payment processing system.
- Merchant of record A merchant of record is the legal seller responsible for processing payments, collecting funds, handling taxes, refunds, disputes, and compliance.
- Merchant underwriting Merchant underwriting is the process that payment providers use to assess a business before approving it to accept payments.
- Merchant-initiated transaction (MIT) A merchant-initiated transaction is a payment started by the merchant using stored payment credentials after the customer has given prior consent.
- Mobile payment Mobile payment is a transaction made using a portable device — a mobile phone or tablet. There are plenty of technologies that make mobile payments possible.
- Mobile payment methods Mobile payments are all financial transactions made with smartphones, tablets, or other internet-enabled devices via apps, browser, or physical card readers.
- Mobile wallet A mobile wallet is a solution that enables its users to pay and accept payments with the help of a mobile phone without using cash or a bank account.
- Money transmitter license A money transmitter license allows a company to legally transfer money or monetary value on behalf of customers in a regulated jurisdiction.
N
- Near-field communication NFC or near-field communication is a technology that enables the exchange of digital content, making payments, and connecting digital devices via touching or just nearing one another.
- Network tokenization Network tokenization replaces card details with secure tokens issued by card networks to improve payment security and card lifecycle management.
P
- Payee A payee is an individual or organisation that receives payment in any form, including cash, checks, or wire transfers.
- Payment acceptance The term “payment acceptance” means the process of accepting payments online or offline, or the share of successful payments out of all attempted payments.
- Payment aggregator A payment aggregator lets merchants accept payments through a third-party payment provider without setting up a direct merchant account with an acquiring bank.
- Payment capture Payment capture is the step where a merchant confirms an authorised payment so the funds can move towards clearing and settlement.
- Payment cascading Payment cascading is an automatic failover process that retries a failed payment through another eligible provider or route.
- Payment conversion rate Payment conversion rate is the percentage of payment attempts that turn into successful completed payments.
- Payment dispute A payment dispute is when a customer challenges a payment and requests a review or reversal of the transaction through their bank, issuer, or payment provider.
- Payment facilitation as a service (PFaaS) Payment facilitation as a service, or PFaaS, helps platforms offer merchant payment acceptance without building the full PayFac stack internally.
- Payment facilitator A payment facilitator, or PayFac, helps merchants accept payments as sub-merchants under a managed acquiring setup. Learn how the PayFac model works and who uses it.
- Payment gateway for multiple merchant accounts Multiple payment gateway integration enables merchants to process transactions through various providers, thereby improving conversion rates and enhancing payment acceptance globally.
- Payment gateway for travel website Let's find out what a merchant account and payment processing solutions for travel businesses should look like.
- Payment gateway for website Learn the essentials of choosing and setting up a payment gateway for your website to ensure secure and convenient payment processing
- Payment infrastructure Payment infrastructure is the technical and operational foundation that helps businesses accept, process, route, settle, and manage payments.
- Payment institution license (PI) A payment institution license allows a company to provide regulated payment services without becoming a bank.
- Payment methods Payment methods are the ways customers pay and merchants receive payments. Learn about cards, wallets, bank transfers, APMs, and how to choose the right payment mix.
- Payment operations Payment operations are the processes and workflows businesses use to monitor, manage, troubleshoot, and optimise payments.
- Payment orchestration Payment orchestration is the process of managing payment providers, methods, routing, and transaction flows through one infrastructure layer.
- Payment page The payment page is a web page designed to enable the purchasing process on your site. It is where customers enter their payment details to make a purchase.
- Payment processor A payment processor is a mediator between a merchant and financial institutions, which is responsible for the entire transaction process.
- Payment reconciliation Payment reconciliation is the process of matching transaction records with provider reports, settlements, and bank statements to confirm payment accuracy.
- Payment reversal A payment reversal is the cancellation or return of a payment transaction before funds are permanently settled or transferred to the intended recipient.
- Payment routing Payment routing is the process of directing transactions to the most suitable payment provider, acquirer, or payment method based on predefined rules.
- Payment service provider (PSP) A payment service provider, or PSP, helps businesses accept and manage payments through cards, wallets, bank transfers, and other payment methods.
- Payment Services Directive (PSD) The Payment Services Directive is a European regulatory framework that governs payment services and payment providers.
- Payment stack A payment stack is the set of tools, providers, systems, and workflows a business uses to accept, process, manage, and reconcile payments.
- Payment switch A payment switch is a system that routes payment transactions between merchants, banks, processors, networks, and other payment participants.
- Payout Payout or pay-out represents an act of paying out the funds to a recipient.
- PCI DSS PCI DSS is a global security standard for protecting cardholder data. Learn who needs to comply, what the main requirements are, and how PCI DSS affects payment processing.
- Personal identification number (PIN) Personal Identification Number (PIN) refers to a numeric password that ensures secure access to accounts, cards, and digital platforms.
- Phishing Phishing or phishing attack is an illegal act to find out personal information (bank card number, password, etc.) for further misuse.
- Primary account number (PAN) Primary account number is the unique numeric identifier of a payment card that is embossed or laser-printed on it.
- Processing fees Processing fees are the charges businesses pay to accept and process payments.
- PSP license A PSP license is regulatory permission that allows a payment service provider to offer payment services in a specific jurisdiction.
- Push-to-card Push-to-card is a payment method that allows funds to be sent directly to an eligible payment card, enabling faster payouts and fund transfers.
R
- Real-time payment (RTP) A real-time payment is an electronic payment that is initiated, processed, and made available to the recipient within seconds.
- Recurring billing Recurring billing is repeated or regular payments carried out within a particular schedule. This payment scenario doesn’t require re-entering payment data.
- Rolling reserve A rolling reserve is a portion of merchant funds temporarily held by a payment provider or acquirer to cover potential refunds, chargebacks, or risk exposure.
S
- SaaS payment gateway Learn what a SaaS payment gateway is, how it works, and why it's essential for your online business success
- SaaS payment processing The way customers pay for the SaaS solutions, or billing process, can be referred to as SaaS payment processing.
- Scheme fees Scheme fees are charges set by card networks for using their payment infrastructure to process card transactions.
- Secure payment gateway Dive into the world of secure payment gateways with Corefy's comprehensive glossary. Learn how they safeguard your transactions and why they are essential for your business.
- Secure payment methods Each payment involves at least two parties – a payer and a payee, and each is concerned about the security of their funds and all the data used while paying.
- Secure payment processing Secure online payment processing is when the data and money of a customer and a merchant are protected based on specific standards, regulations, and measures.
- Settlement Payment settlement is the process of transferring approved payment funds from the payer’s side to the merchant or payee after processing.
- Single Euro Payments Area (SEPA) SEPA was created to unify and harmonise domestic and cross-border funds transfers in European countries.
- Small business payment system Payment system for small business is an online payment solution that allow business owners to accept, process and manage payments from their customers.
- Soft decline A soft decline is a temporary payment decline that may be recoverable through retrying, rerouting, re-authentication, or updated payment details.
- Software as a service SaaS is a model of software delivery where a company provides access to software applications over the internet.
- Sponsor bank Learn what a sponsor bank is, how it gives PSPs and fintechs access to Visa and Mastercard, how it differs from an acquiring bank, and why sponsor banking is essential for modern payment businesses.
- Stablecoin Stablecoin is a cryptocurrency designed to maintain a stable value by being linked to fiat currencies, commodities, or other financial instruments.
- Strong Customer Authentication (SCA) Strong Customer Authentication is a European regulatory requirement that uses multi-factor authentication to verify a payer's identity and reduce payment fraud.
- Sub-merchant A sub-merchant is a business that accepts payments through a payment facilitator or platform instead of maintaining its own direct acquiring relationship.
- SWIFT code Using the SWIFT code, you can make international payments for education, medical treatment or holidays abroad. It is also beneficial to transfer money to individuals outside the country.
T
- Tokenization Tokenization replaces sensitive payment data with a secure token that can be used for processing without exposing the original data.
- Transaction laundering Transaction laundering is a type of payment fraud where illegal or hidden businesses process payments through another merchant account.
V
- Virtual IBAN A virtual IBAN is a unique account reference that helps businesses receive, identify, and reconcile bank transfers without opening separate physical bank accounts.
- Void transaction A void transaction is one that a vendor or a merchant cancels before it is processed and the funds are debited.