Payment Industry Glossary
From acquirers to zero-knowledge proofs — understand the language of modern payments with clear, jargon-free definitions.
Terms and Definitions
Search or browse key acronyms, financial concepts, and technical definitions shaping global payments.
- Acquirer
- A financial institution or bank that processes credit or debit card payments on behalf of a merchant, settling funds into the merchant's account.
- ACH (Automated Clearing House)
- An electronic network in the United States used for direct bank-to-bank financial transfers, such as payroll deposits or vendor bills.
- APM (Alternative Payment Method)
- Any payment option that does not rely on traditional credit or debit card networks, such as digital wallets, BNPL, bank transfers, or mobile money.
- BNPL (Buy Now, Pay Later)
- A short-term retail credit service that allows consumers to purchase items and pay for them in interest-free installments, while the merchant is paid upfront.
- Chargeback
- A transaction reversal initiated by a cardholder's bank, pulling funds back from the merchant in response to customer disputes or card fraud.
- IBAN (International Bank Account Number)
- An internationally agreed system of identifying bank accounts across national borders, primarily used in Europe and the Middle East.
- Interchange Fee
- A transaction fee charged by card-issuing banks to merchants for processing credit or debit card transactions, usually a percentage of the total transaction cost.
- Open Banking
- A secure banking system that allows third-party financial service providers to access banking transaction data and initiate payments directly from the customer's account using APIs.
- PSD2 (Payment Services Directive 2)
- A European Union regulation requiring banks to expose secure API rails to authorized third-party applications, facilitating open banking.
- Tokenization
- A payment security process that replaces sensitive card or bank details with a unique, single-use digital token, protecting transaction credentials from theft.
- 3D Secure (3DS)
- An authentication protocol that adds an extra security layer for online card transactions, requiring cardholder verification via password, biometric, or OTP.
- Boleto Bancário
- A popular Brazilian payment method that generates a boleto (a bank slip) that consumers can pay at banks, lottery outlets, or online banking portals.
- Digital Wallet
- A software-based system that securely stores payment credentials and passwords, enabling users to make contactless or online payments via mobile devices or computers.
- Faster Payments
- A UK banking initiative enabling near-instantaneous electronic payments between bank accounts 24/7, with funds typically available within seconds.
- Giropay
- A German online payment method that allows customers to pay via direct online bank transfer through their own banking portal, popular in German-speaking markets.
- Issuer
- A financial institution that issues credit or debit cards to consumers on behalf of card networks, such as Visa or Mastercard.
- M-Pesa
- A mobile phone-based money transfer and financial service platform launched in Kenya, enabling users to deposit, withdraw, transfer money, and pay for goods via SMS.
- Payment Gateway
- A technology service that authorizes and processes online payments by encrypting transaction data and transmitting it between the merchant's website and the acquiring bank.
- PIX
- An instant payment system created by the Central Bank of Brazil that allows real-time peer-to-peer and business payments 24/7 using QR codes or key identifiers.
- SEPA (Single Euro Payments Area)
- A European payment integration initiative that harmonizes euro-denominated bank transfers and direct debits across 36 member countries, enabling seamless cross-border payments.
- UPI (Unified Payments Interface)
- An Indian real-time payment system developed by the National Payments Corporation of India that enables instant inter-bank transactions through mobile platforms.
- USSD (Unstructured Supplementary Service Data)
- A mobile communication protocol used in GSM networks, enabling basic feature phones to access financial services like mobile money without requiring a data connection.
- Zelle
- A US-based digital payments network that enables direct bank-to-bank transfers between US bank accounts using an email address or phone number, typically settling in minutes.
- QR Code Payment
- A contactless payment method where consumers scan a merchant's QR code or display their own QR code at checkout to initiate a payment via a mobile banking or wallet application.
- Real-Time Payment (RTP)
- An electronic payment system where money moves from the sender's account to the receiver's account in near real-time, available 24/7/365.
- Payment Orchestration
- A platform layer that routes transactions across multiple payment providers, acquirers, and methods to optimize authorization rates, reduce costs, and improve resilience.
- KYC (Know Your Customer)
- A regulatory process requiring financial institutions and payment providers to verify the identity of their clients to prevent fraud, money laundering, and terrorist financing.
- Stablecoin
- A type of cryptocurrency whose value is pegged to a stable asset, such as the US dollar, to minimize price volatility and enable reliable digital payments.
- e-Money (Electronic Money)
- A digital alternative to cash that stores monetary value electronically and can be used for payments with third parties, regulated under e-money directives in many jurisdictions.