The ultimate glossary of payment terms

As technology continues to advance rapidly, we are committed to keeping you informed about the latest developments in cross-border payments. Our payments glossary serves as a comprehensive reference guide, simplifying complex industry terminology. We encourage you to bookmark this page and visit regularly, as we will update the glossary to reflect new terms and innovations as they arise.

Account Information Service Provider (AISP)

A service that provides read-only access to users’ bank account data, enabling financial insights without managing transactions.

Accounts Payable (AP)

A business accounting process for tracking and paying outstanding supplier invoices.

Africa Regional Payment Systems (RPS)

Multi-country payment networks supporting trade and financial settlement within African regions such as ECOWAS (Economic Community of West African States).

Airtel Money

A mobile money service used across various African countries for transactions, transfers, and bill payments.

Application Programming Interface (API)

A digital bridge enabling seamless communication between different software applications.

Authorization Rates

Metrics showing the percentage of successfully approved payment transactions.

Authorization Retries

Strategies to attempt processing declined payments again, improving approval rates.

Automated Clearing House (ACH)

A network managing electronic bank-to-bank payments like payroll or bill payments.

Automatic Funds Transfer

Pre-scheduled payments directly from a bank account, often for recurring bills or subscriptions.

Bank Identification Number (BIN)

The initial digits of a card that identify the issuing bank and card type.

Bank Transfer

Direct transfers of funds from one bank account to another, used for personal or business transactions.

Banking-as-a-Service (BaaS)

A model allowing third-party companies to embed financial services into their platforms using APIs.

Biometric Authentication

Security methods using physical traits like fingerprints or facial recognition to verify identity.

Blockchain

A decentralized ledger technology powering cryptocurrencies and enhancing payment transparency and security.

Buy Now, Pay Later (BNPL)

Flexible payment options splitting purchase costs into installments, often interest-free.

Card Account Updater

A service for automatically updating stored payment card details for recurring transactions.

Card-Not-Present (CNP) Transactions

Payments made without physical card presence, common in e-commerce.

Cash Flow Management

Business strategies and tools for tracking and optimizing incoming and outgoing funds.

Central Bank Digital Currency (CBDC)

Government-backed digital currencies designed to complement traditional cash.

China UnionPay (CUP)

A global payment network facilitating card payments, widely accepted in China and internationally.

Contactless Payment Technology

Payments processed through NFC-enabled devices or cards, requiring no physical touch.

Cross-Border Payments

Transactions that involve parties in different countries, requiring currency conversion and regulatory compliance.

Cross-Border RMB Payments

Systems supporting transactions in Renminbi (RMB), streamlining trade and business operations with Chinese partners.

Cryptocurrency (Crypto)

Digital currencies utilizing cryptography for secure transactions, independent of central authorities.

DLOCAL

A payment aggregator specializing in LATAM, integrating local payment options like Boleto Bancário and OXXO for global merchants.

Debit Card

A payment card linked directly to a bank account, allowing purchases without accruing debt.

Digital Invoice

Electronic billing sent via email or messaging platforms for quicker payment processing.

Digital On/Off Ramps

Solutions enabling users to convert fiat to cryptocurrency or vice versa for seamless transitions.

Digital Wallet

A virtual tool for securely storing and managing multiple payment methods, including cards and cryptocurrencies.

Direct Debit (DD)

Authorizes businesses to withdraw payments directly from customers' bank accounts.

Dynamic Currency Conversion (DCC)

Enables cardholders to pay in their home currency during international purchases.

Ecommerce

The buying and selling of goods or services online, with payments handled digitally.

Electronic Funds Transfer (EFT)

Transfers made electronically from one bank account to another, commonly for payroll or bills.

Embedded Payments

Payments integrated directly into apps or platforms, allowing transactions without leaving the user interface.

Faster Payments Service (FPS)

A UK-based initiative reducing payment settlement times to seconds instead of days.

Fiat Money

Government-issued currencies like the US dollar, not backed by a physical commodity like gold.

Foreign Exchange (Forex) Rates

The conversion rates for exchanging one currency into another for international transactions or trading purposes.

Gift and Loyalty Programs

Payment-linked rewards to incentivize repeat purchases and customer retention.

Global Payment Rails

Systems enabling cross-border payments, including SWIFT and blockchain-based systems.

Global Treasury Management

Financial services allowing businesses to optimize liquidity and handle multi-currency payments.

Hashing

A cryptographic function ensuring data integrity in blockchain and digital payments.

Hosted Payment Page

A secure, third-party webpage that handles payment processing for online transactions, reducing merchant responsibility for PCI compliance.

Hybrid Payment Systems

Payment models combining traditional (fiat) and digital (cryptocurrency) transactions to cater to diverse customer needs.

Instant Payments

Payment systems enabling immediate fund transfers, reducing traditional clearing times.

International Bank Account Number (IBAN)

A standardized format for identifying bank accounts internationally.

Jurisdiction-Specific Payment Regulations

Laws and guidelines governing payment systems within specific countries or regions, such as GDPR for data protection in Europe or PCI DSS for card payments globally.

Just-in-Time Payments

Payments timed precisely with operational needs to optimize cash flow and reduce the risk of holding excess funds.

Key Management Services (KMS)

Security systems that manage cryptographic keys used for encrypting payment data and securing digital transactions.

Kiosk Payments

Payment systems integrated with physical kiosks, allowing users to make transactions or pay bills in locations such as malls, transport hubs, and convenience stores.

Know Your Business (KYB)

A regulatory requirement where financial institutions verify the legitimacy and ownership of businesses to prevent fraud, money laundering, and illicit activities.

Know Your Customer (KYC)

A regulatory process requiring financial institutions and payment providers to verify the identities of their customers to prevent fraud and money laundering.

Liquidity Management

Financial solutions ensuring enough cash flow for smooth business operations.

Local Payment Methods (LPMs)

Region-specific payment systems catering to cultural and economic preferences, such as PIX in Brazil, iDEAL in the Netherlands, and SEPA in Europe.

Loyalty Points Conversion Systems

Platforms allowing customers to redeem or convert loyalty points into payments or alternative rewards, bridging loyalty programs and financial systems.

M-Pesa

A widely used mobile money service enabling payments, transfers, and financial services in African countries.

MercadoPago

A popular payment platform in LATAM offering services like e-wallets, card payments, and cash-based methods like PIX.

Mobile Money Interoperability

Systems allowing cross-platform mobile money transfers between providers like M-Pesa, MTN Mobile Money, and Airtel Money.

NACHA (National Automated Clearing House Association)

The organization managing the ACH Network in the United States, which handles electronic bank-to-bank transactions like direct deposits and bill payments.

Near Field Communication (NFC)

A wireless technology enabling secure, contactless payments between devices, commonly used in mobile wallets like Apple Pay and Google Pay.

Network Tokenization

A security technology replacing sensitive payment card information with encrypted tokens to protect cardholder data during transactions.

Non-Bank Financial Institutions (NBFIs)

Institutions like fintech companies and mobile money operators offering financial services outside the traditional banking framework.

Omnichannel

A retail strategy that ensures a seamless shopping experience across all platforms, including in-store, mobile, and online channels.

On-Demand Payments

On-demand payments enable immediate, real-time transactions, allowing users to pay as needed, bypassing traditional payment delays.

Open Banking

Open banking allows regulated third-party providers to access consumers' bank accounts and financial data, with the consumer's explicit consent. This access enables third parties to offer enhanced financial insights or facilitate account-to-account payments.

PSD2 Open Banking (Europe)

A European regulation under the Payment Services Directive 2, enabling secure API-based payment service integration, promoting innovation, and improving transparency.

Pan-African Payment Settlement System (PAPSS)

An African Union initiative enabling instant cross-border payments across African countries using local currencies.

Payment Rails

Infrastructure networks enabling the transfer of money, such as SWIFT or ACH.

Payroll

The process of compensating employees, including the calculation and distribution of wages.

Peer-to-Peer (P2P) Payments

Transactions made directly between individuals using platforms like Venmo or PayPal.

Quick-Response (QR) Codes

Scannable barcodes enabling instant access to payments, menus, or apps.

Real-Time Payments (RTP)

Payment systems that process and clear transactions in seconds, offering immediate availability.

Recurring Payments

Automated transactions for subscriptions or regular services, streamlining payment processes.

Remittance Payments

Cross-border transfers, often sent to support family members in other countries.

Remote Payroll

Payroll services enabling businesses to manage compensation for employees working in different locations or countries.

SEPA Instant Credit Transfer (SCT Inst)

A real-time payment initiative under the Single Euro Payments Area (SEPA) allowing euro transfers to be completed within seconds.

Smart Contracts

Blockchain-based contracts automating payment or action upon meeting specific conditions.

Software as a Service (SaaS)

Subscription-based software delivery model accessed via the cloud.

Stablecoins

Cryptocurrencies pegged to stable assets like fiat money to minimize price volatility.

Terminal Identification Number (TID)

A unique identifier assigned to a payment terminal for accurate transaction tracking.

Tokenization

Replacing sensitive payment data with encrypted tokens for enhanced transaction security.

Treasury Management Systems (TMS)

Tools for businesses to manage cash flow, payments, and financial risks.

UPI (Unified Payments Interface)

An instant real-time payment system used primarily in India, enabling seamless money transfers.

Vehicle Commerce

In-car payment systems enabling purchases like tolls or fuel directly through the vehicle.

Virtual Terminal

A web-based tool allowing merchants to accept payments without a physical POS system.

Wallet-to-Wallet Payments

Transfers made directly between digital wallets, common in cryptocurrency transactions.

Wire Transfer

Secure, bank-mediated electronic fund transfers, often used for large payments.

X-Currency Payments

Streamlined systems for cross-currency transactions in global trade.

Yield Optimization

Strategies for businesses to maximize returns from financial assets, including staking.

Zero-Fee Processing

Payment options minimizing or eliminating processing fees for merchants or users.