Payment glossary: speak the banks' language.

Authentication protocol that adds a security layer during card payments. The buyer must confirm their identity through their bank (SMS code, banking app). Version 2.0 improves user experience with frictionless authentication.

Financial institution that processes card payments on behalf of the merchant. It receives funds from issuing banks and transfers them to the merchant after deducting fees.

Set of laws and procedures designed to prevent money laundering. PSPs must implement controls to detect and report suspicious transactions.

Interface allowing two systems to communicate. Payment APIs enable integration of payment features directly into a website or application.

First step of a card transaction where the issuing bank verifies card validity and fund availability. A successful authorization doesn't guarantee final payment.

The first 6 digits of a payment card that identify the issuing bank and card type. Used for transaction routing and fraud detection.

Action of finalizing a previously authorized transaction. Capture triggers the actual transfer of funds. Can be immediate or delayed based on business model.

Transaction where the physical card isn't presented (online purchases, phone orders). These transactions carry higher fraud risk and generally higher fees.

Reversal of a transaction by the customer's bank, usually following a dispute. The amount is debited from the merchant's account with additional fees. High chargeback rates can lead to merchant account closure.

Page or process allowing customers to complete their purchase and make payment. An optimized checkout reduces cart abandonment.

Adherence to applicable payment regulations and standards (PCI-DSS, GDPR, PSD2). Non-compliance can result in financial penalties and loss of payment acceptance capability.

Percentage of visitors who complete a purchase. In payments context, it measures the ratio between payment attempts and successful payments.

Decentralized digital currency using cryptography. Bitcoin, Ethereum, USDT are accepted by some PSPs. Advantages: no chargebacks, reduced fees. Disadvantages: volatility.

3 or 4 digit security code printed on the card. Required for CNP transactions, it proves the payer has physical access to the card.

Rejection of a transaction by the issuing bank. Possible causes: insufficient funds, expired card, fraud suspicion. Soft declines can be retried.

Global standard for chip cards (Europay, Mastercard, Visa). EMV chips generate a unique code per transaction, reducing counterfeit card fraud.

Techniques to detect and block fraudulent transactions: machine learning, address verification, behavioral analysis, 3D Secure.

Designation for sectors with elevated chargeback or fraud risks: gaming, CBD, crypto, coaching, nutraceuticals. These sectors require specialized PSPs.

International Bank Account Number - standardized international bank account number. Used for SEPA transfers in Europe.

Fees paid by the acquiring bank to the issuing bank for each transaction. These fees vary by card type, country, and business sector.

Bank that issued the customer's payment card. It authorizes or declines transactions and debits the cardholder's account.

Mandatory identity verification procedures for financial services. Includes verification of identity documents, address, and sometimes source of funds.

Four-digit code that classifies your activity with Visa and Mastercard. It sets your risk level and interchange fees; some MCCs are classified high-risk.

Specialized bank account for accepting card payments. Funds pass through before being transferred to the main bank account.

Unique identifier assigned to each merchant by the acquirer. Used to trace transactions and identify payment recipients.

Payment made via smartphone or tablet. Includes Apple Pay, Google Pay, Samsung Pay and in-app payments.

European regulation strengthening electronic payment security. Mandates strong customer authentication (SCA) for most online transactions.

System that transmits payment information between the merchant site and processing networks. It encrypts sensitive data and manages communication with banks.

Transfer of collected funds to the merchant's bank account. Frequency and timing vary by PSP and risk profile.

Payment Card Industry Data Security Standard - security standard for companies handling card data. 12 requirements covering network security, encryption, and access controls.

Payment service provider offering a complete solution: gateway, merchant account, risk management. Simplifies payment acceptance for merchants.

Regular automatic charge (subscriptions, memberships). Requires initial customer consent and secure card data storage (tokenization).

Voluntary return of funds to the customer by the merchant. Faster and cheaper than a chargeback. Preserves customer relationship.

Percentage of each payment (usually 5 to 10%, more in high-risk sectors) held by the provider as a guarantee against future chargebacks and refunds, then released on a rolling basis with a 90 to 180 day lag. Mostly applied during the first months, it is reduced or removed with a clean track record.

Strong customer authentication mandated by PSD2. Requires 2 factors among: knowledge (password), possession (phone), inherence (biometrics).

Single Euro Payments Area - unified payment zone for euro transfers and direct debits. Covers 36 European countries.

Process of final fund transfer between transaction parties. Occurs after transaction clearing.

Temporary transaction rejection that can be resolved by retrying. Causes: network issue, timeout. Unlike hard declines, a retry may succeed.

Replacing sensitive card data with a unique identifier (token). Enables secure storage for recurring payments without storing actual card data.

Cancellation of an authorized but not yet captured transaction. No fees, unlike refunds. Must occur before settlement.

Automatic notification sent by the PSP to the merchant's system upon events (successful payment, chargeback). Enables real-time system synchronization.

Customizable payment solution in the merchant's branding. The user stays on the merchant's site without redirect to an external payment page.