Glossary of Payment Related Terms

Two-Factor Authentication, a security process requiring two different authentication factors to verify user identity before accessing payment systems.

A security protocol for online card transactions, adding an authentication step for fraud prevention.

Automated Clearing House payments, a method for transferring funds between banks electronically in the United States, often used for direct deposits or eChecks.

An entity that processes payment card transactions for merchants. The payment gateway connects to an acquirer behind the scenes.

A unique identifier used to authenticate requests to payment gateway APIs, ensuring secure access to payment processing services.

A mobile payment and digital wallet service by Apple, enabling users to make secure purchases online or in-store.

The process of verifying that a customer has sufficient funds or credit available before completing a transaction.

Bankers’ Automated Clearing Services, the UK’s system for processing bulk electronic payments like direct debits and credits.

The method of grouping multiple credit card transactions together for settlement, typically processed at the end of each business day.

The process of collecting funds from a previously authorized transaction, transferring money from the customer’s account to the merchant.

The 3 or 4-digit security code on payment cards used to verify that the person making the transaction physically possesses the card.

The process of initiating a payment by a merchant to collect funds from a customer’s account.

A reversal of a payment transaction initiated by the customer’s bank, typically due to disputes or fraudulent activity.

The process of exchanging credit card transaction information between the acquiring and issuing banks before final settlement occurs.

Card Verification Value, the 3 or 4-digit security code on payment cards used to verify card possession during transactions.

The rejection of a payment transaction by the issuing bank or payment processor due to insufficient funds, security concerns, or other issues.

Australia’s batch electronic payment system for processing regular transactions like payroll and direct debits.

A formal challenge to a payment transaction initiated by a cardholder, often preceding a chargeback if not resolved.

Electronic Funds Transfer, Canada’s system for moving money between bank accounts electronically, including pre-authorized debits and credits.

Europay, Mastercard, and Visa chip technology that provides enhanced security for card-present transactions through embedded microprocessors.

A credit card authorization that is no longer valid due to time limits, typically expiring after 7-30 days depending on the card network.

The UK’s real-time payment system enabling instant transfers between participating banks, available 24/7.

The result of sending the raw card details to the payment gateway and tokenizing it there. The gateway token is then returned as the identifier for the stored card.

The General Data Protection Regulation (GDPR) is a European Union law governing the collection, use, and storage of personal data, enhancing consumer privacy rights.

A mobile payment platform developed by Google, allowing users to make payments using their Android devices or web browsers.

A temporary restriction placed on funds in a customer’s account following credit card authorization, reserving the amount until capture or release.

A secure payment form provided by the payment processor, reducing PCI compliance requirements for merchants.

Canada’s person-to-person electronic money transfer service that uses email or SMS to send funds between bank accounts.

A fee paid by the merchant’s bank to the customer’s bank for processing card transactions, typically a percentage of the transaction amount.

The financial institution that provides payment cards to customers and authorizes transactions on their behalf.

Know Your Customer procedures used to verify customer identity and assess potential risks for money laundering or fraud.

A specialized bank account that allows businesses to accept and process electronic payment transactions.

A unique identifier assigned to each merchant account by the payment processor for tracking and routing transactions.

Multi-Factor Authentication, a security method requiring multiple forms of verification before allowing access to payment systems or sensitive data.

National Electronic Funds Transfer, India’s system for one-to-one electronic fund transfers processed in hourly batches.

New Payments Platform, Australia’s real-time payment infrastructure enabling instant transfers with enhanced data capabilities.

The ability to capture only a portion of the originally authorized credit card amount, useful for partial shipments or adjusted orders.

A service that handles the technical aspects of processing payments, including authorization, clearing, and settlement.

Payment Card Industry Data Security Standard (PCI-DSS, or PCI for short) is a set of security standards to protect cardholder data.

The status of a credit card transaction that has been submitted for processing but has not yet been completed or declined.

A credit card process that verifies payment method validity and reserves funds without immediately charging the customer, commonly used for hotels and car rentals.

An automated payment system that charges customers at regular intervals for subscription services or ongoing purchases.

The return of funds to a customer’s payment method, typically processed through the original transaction channel.

The cancellation of a credit card transaction that undoes the effects of a previous authorization, capture, or settlement.

The process of identifying, assessing, and mitigating potential fraud or financial risks in payment transactions.

Real Time Gross Settlement, India’s system for high-value instant fund transfers processed individually in real-time.

A testing environment that simulates live payment processing without handling real money or affecting actual accounts.

Single Euro Payments Area, the European system standardizing euro payments across participating countries for seamless transfers.

The process of transferring funds from the customer’s account to the merchant’s account after a transaction is authorized and captured.

A digital certificate that encrypts data transmitted between a website and users, essential for secure payment processing.

The process of replacing sensitive payment data with unique identification symbols that retain essential information without compromising security.

A unique identifier assigned to each payment transaction for tracking, reference, and reconciliation purposes.

Unified Payments Interface, India’s real-time payment system enabling instant transfers using mobile apps and unique identifiers.

Visa Acquirer Monitoring Program is the way Visa assesses fraud and dispute rates in payments. It replaced Visa’s various existing fraud and dispute programs – including the Visa Fraud Monitoring Program (VFMP) and Visa Dispute Monitoring Program (VDMP) – and consolidates them into a single framework.

The cancellation of a payment transaction before it has been settled, preventing funds from being transferred.

An automated HTTP callback that notifies your application when specific payment events occur, enabling real-time updates.