Glossary

Acceptance is the process where a merchant allows a customer to use a payment card for transactions. The acceptance rate is the percentage of attempted transactions successfully accepted by the merchant.

Refers to the percentage of initiated payment transactions successfully authorized by a payment system, representing the ratio of approved to total attempted transactions over time.

A service from credit card networks that updates cardholder information in merchant systems when details change due to expiration, loss, or card switching. Offered by major companies like Visa, Mastercard, Discover, and Amex, it helps businesses retain recurring customers by minimizing transaction failures and ensuring smooth payments, thus enhancing customer retention and revenue continuity.

A financial institution that holds merchant accounts and processes card transactions, acting as an intermediary between merchants and card networks. It enables businesses to accept electronic payments by securely routing card data for issuer authorization and provides merchant accounts for card payments, often collaborating with the acquirer processor, which may be the same entity.

Acquirer processors connect merchants, the network, and the acquiring bank or payment gateway for payment acceptance. They provide technical capabilities for communication with authorization and settlement entities. Sometimes, the acquiring bank and acquirer processor are the same.

A unique identifier is assigned to financial transactions by the acquiring bank or payment processor, serving as a critical reference in the payment ecosystem. This number tags card transactions as they progress through the acquirer, card network, issuer, and processors, enabling acquirers and merchants to monitor specific transactions.

APMs offer transaction methods beyond credit and debit cards, including digital wallets, bank transfers, and mobile payments. They are defined as any payment form excluding cash or major bank credit cards, with examples such as mobile payments, digital wallets, bank transfers, BNPL, and prepaid cards, also referred to as local payment methods.

Involves systems, strategies, and legal frameworks to detect, prevent, and investigate financial fraud and corruption. Key elements include risk assessment methodologies, control measures, advanced technologies like AI and blockchain, strong internal policies, and cooperation among national and international bodies to protect public funds and maintain trust.

Software interfaces that facilitate data exchange and communication between payment systems and applications, such as online forms and checkout processes. They allow systems to interact programmatically, with common types being web services and library-based APIs.

The procedure for a member to resolve a chargeback dispute with another member.

Software interfaces that facilitate data exchange and communication between payment systems and applications, such as online forms and checkout processes. They allow systems to interact programmatically, with common types being web services and library-based APIs.

Authorization requests are crucial for verifying and reserving funds during payment transactions at card terminals. This process checks if the cardholder has sufficient funds or credit for the transaction, with the issuer approving based on the account status. It confirms the card's validity, ensures compliance with business rules, and places a temporary hold on the funds.

Is the initial six digits of a credit or debit card that uniquely identifies the issuing financial institution. Acting as the card's first line of defense in transaction processing, the BIN allows merchants and financial institutions to swiftly identify the card's origin. Crucial in fraud prevention, the BIN aids in determining the card type, level of authorization required, and potential geographic restrictions.
This numeric sequence serves as an identifier for various attributes associated with the card, including the following: The issuing bank: Identifies the financial institution that issued the card. Type of card: Distinguishes between debit, credit, prepaid, or other types of cards. Card level: Indicates the card’s tier, such as standard, gold, or platinum. Country of issuance: Identifies the country where the card was issued.

A method for transferring electronic funds between individuals or entities.

Refers to the address linked to the payment method, usually a credit or debit card. It acts as a verification point in transactions, enabling merchants to confirm the cardholder's identity.

The merchant receives a test webhook of the specified type (with the contract structure, mocked test data, etc.); as a result, they can test their own integration with the selected webhook type.

The merchant receives a test webhook of the specified type (with the contract structure, mocked test data, etc.); as a result, they can test their own integration with the selected webhook type.

A payment card is issued to individuals or entities for financial transactions by a card-issuing institution, usually a bank.

A CAID is a numeric string, 1 to 15 characters long, that uniquely identifies a store location or transaction point for payment transactions from the merchant's acquiring bank. Its main purpose is to assist acquiring banks and card brands in tracking, processing transactions, and communication.

Card associations connect card issuers with merchants and promote credit and debit cards. Major ones like Visa, MasterCard, American Express, and Discover establish regulations for issuance, transaction processing, interchange fees, and dispute resolution.

Happens when a payment is made without the physical card, common in online and phone purchases where swipes or chip insertions are absent. Cardholder details are provided electronically, and even if a customer inputs their card information, it is still classified as card-not-present.

Occurs when a customer presents their payment card to a merchant for an in-person purchase. Customers use their card by swiping, inserting, or tapping, enabling the merchant’s terminal to securely read and process payment information. CP transactions are generally more secure than CNP transactions due to direct card and cardholder verification.

Refers to securely storing a cardholder’s credit or debit card information on a merchant’s server for future transactions. The cardholder consents to this storage during a purchase or when setting up a recurring payment, like a subscription service.

The merchant receives a test webhook of the specified type (with the contract structure, mocked test data, etc.); as a result, they can test their own integration with the selected webhook type.

The merchant receives a test webhook of the specified type (with the contract structure, mocked test data, etc.); as a result, they can test their own integration with the selected webhook type.

The merchant receives a test webhook of the specified type (with the contract structure, mocked test data, etc.); as a result, they can test their own integration with the selected webhook type.

The merchant receives a test webhook of the specified type (with the contract structure, mocked test data, etc.); as a result, they can test their own integration with the selected webhook type.

The merchant receives a test webhook of the specified type (with the contract structure, mocked test data, etc.); as a result, they can test their own integration with the selected webhook type.

Occurs when a card transaction fails to get approval from the issuer, with various potential reasons involved.

A numerical or alphanumeric identifier from a card issuer indicates unsuccessful authorization during a payment. Each code corresponds to a specific rejection reason, such as insufficient funds, expired cards, suspicious activity, or exceeding credit limits.

An application that securely stores users' payment information, like credit card details, enables convenient electronic transactions. Digital wallets can be mobile apps, software, or cloud-based solutions, streamlining payments by linking payment cards or bank accounts and eliminating the need to input card details for each transaction.

A reduction on a final payment amount helps businesses boost sales, cash flow, or reward loyalty, that can apply to individual items or the entire invoice and is percentage-based. It may be offered for reasons such as early payment, high-volume purchases, or retry logics (in case of insufficient funds).

A card owner can dispute a transaction's validity, like unauthorized purchases or undelivered goods. Disputes usually involve the cardholder, issuing card program, card network, and merchant.

A payment processing method where authorization and settlement occur in separate messages, mainly for transactions needing signature confirmation (in-person or electronic).

A financial service enabling cardholders to make international purchases in their home currency while using credit or debit cards abroad. When a transaction occurs in a foreign currency, the merchant offers to convert the amount to the cardholder's native currency at the point of sale, based on real-time exchange rates for transparency regarding transaction costs.

A descriptor that can vary by transaction, benefiting businesses with different names, services, or products, enhancing customer understanding and satisfaction.

A technique of automatically scrambling sensitive data in the terminal, site, or computer before transmission for security and anti-fraud purposes.

Unauthorized or deceptive transactions occur when an individual's or organization's payment or identity information is illicitly acquired and misused. This malicious activity is carried out by individuals or groups seeking financial gain through unauthorized access to sensitive information.

An alert from an issuing bank to merchants when a transaction is suspicious of fraud, indicating that the cardholder's account or card details may be compromised. It urges businesses to investigate and take preventive actions against potential fraudulent transactions.

A risk management technique for financial institutions assesses the likelihood of fraudulent transactions. This predictive modeling analyzes factors like transaction history and customer behavior to assign a numerical score to each transaction, indicating its risk level for quick identification of potential fraud.

A type of fraud involving a customer first making an online purchase with their own credit card. Then, after receiving the purchased goods or services, a customer requests a chargeback from the issuing bank.

An intermediary facilitates information and transaction flow between systems, bridging merchants, payment processors, and financial institutions to enable electronic payment authorization and settlement.

The foundation for location services and location-aware apps involves tracking a user or device's geographical location.

A broad consumption tax on goods and services in countries like India and Singapore, replacing multiple indirect taxes such as VAT and excise duty.

A hard decline prevents further charge attempts, often due to fraud or invalid card details. Customers should contact their bank or use a different payment method to resolve it.

Transactions with an increased risk profile due to factors such as the business nature, customer location, transaction magnitude, and payment mode.

A secure webpage provided by a third party allows customers to enter their payment details to complete a transaction instead of doing so directly on the merchant's website.

An HTML element that embeds another document is called an iframe. An iframe payment page integrates a secure payment form from a gateway onto a merchant's website, allowing customers to enter payment details without leaving the checkout page.

Electronic payments via mobile apps are popular as they allow users to pay without leaving the app.

A first-time card charge that creates a token during the transaction.

A financial institution issues payment cards to consumers, assessing credit risk, setting limits, and providing physical or digital cards. This entity is crucial in the payment processing cycle, enabling consumers to access funds or credit for transactions.

A process by financial institutions to verify the identity and legitimacy of corporate entities involves collecting and verifying information about a business, including registration details, ownership structure, financial standing, and activities.

A regulatory process for financial institutions to verify customer identities, preventing financial crimes like money laundering, fraud, and terrorist financing by ensuring thorough customer understanding.

Refers to a low likelihood of chargebacks, fraud, or financial risks. Factors for low-risk classification include the merchant’s industry, average transaction size, processing history, chargeback ratio, operational duration, financial stability, and compliance history.

A four-digit number assigned by credit card networks like Visa and MasterCard, reflecting a business's primary activities. Each business receives an MCC indicating its products or services, such as airlines and retail stores. Banks and credit card companies use MCCs to categorize transactions, impacting processing fees. MCCs also affect reward programs, as some cards offer bonuses for specific categories, and are utilized in fraud prevention and corporate spend analysis.

A unique numerical identifier for each merchant with a merchant account, MIDs distinguish them in electronic payment systems. They are essential for transaction tracking, reporting, and settlement. Acquiring banks or payment service providers assign MIDs when creating a merchant account, embedding them in transaction data to identify the merchant in each electronic payment.

An electronic payment initiated by the merchant for the customer, often in a recurring or subscription model. Unlike traditional customer-initiated transactions, MITs occur without the customer's direct involvement. Examples include subscription renewals, installment payments, and scheduled billing cycles.

A company that sells goods or services online or in physical locations is essential to the payment processing ecosystem, initiating transactions by charging customers.

A customer identity verification method requiring multiple information pieces for online account login.

Involves replacing sensitive card data with unique identification symbols (tokens) that retain essential information without compromising security. This process protects payment information and reduces the scope of PCI compliance.

An identifier, assigned by the payment system (e.g., Visa, MasterCard), is unique to each transaction, detailing the operation type and processing network for routing. The Scheme ID ensures the transaction goes through the correct payment system without substituting card data with tokens.

A customer-initiated transaction uses a one-click payment method for purchases with a single button click. This solution allows customers to pay without entering full card and address details, streamlining the process for returning customers. With consent, all details are stored after the first purchase, needing only the CVC/CVV for future orders. Such transactions usually utilize card tokens.

refers to the strategic management and optimization of various payment methods, providers, and channels within a unified framework. It involves dynamically selecting the most suitable payment methods and providers based on factors such as transaction type, customer preferences, and regional considerations.

A unique order identifier is created when the user navigates to the checkout page or generates a bank link and/or auto-renewal. The Order aggregates all related payment attempts for a single order and is the primary unit for grouping purchase logic.

The unique number on a credit, debit, or payment card usually has 14 to 19 digits printed on the front. This number identifies the card for transaction processing, unlike a bank account number that identifies the bank account.

A streamlined solution for merchants to accept card payments quickly. Unlike traditional processors, payment facilitators use existing bank relationships for simplified onboarding and ready-made solutions.

A service or transaction charge covers administrative and operational costs, including government fees for permits and licenses and business charges for processing payments, especially credit or debit card sales. Fees vary based on the service, transaction type, involved parties, and associated risks.

Include credit card, debit card, electronic transfer, and mobile app.

A company contracted by the merchant manages transactions from various channels, including credit and debit cards, for merchant acquiring banks. They validate, approve, and post transaction details, ensuring funds transfer from the customer’s account to the merchant’s account.

A set of security standards ensures that companies accepting, processing, storing, or transmitting credit card information maintain a secure environment. Major credit card companies established these standards to protect cardholder data and reduce fraud.

Unique identifying information in forms like a Personal Identification Number (PIN) for transactions, a Social Security Number (SSN) or national ID for verification, and a personal identity code used in some countries for official records.

A payment card with a limited fund amount, not directly linked to a bank account or credit line.

A EU regulatory framework seeks to enhance competition, security, and innovation in the payments market. Building on the original Payment Services Directive, PSD2 introduces key provisions like Strong Customer Authentication (SCA), requiring extra authentication steps for certain electronic transactions.

A third-party company facilitates secure electronic payment transactions between merchants and consumers. PSPs act as intermediaries, providing efficient payment processing for businesses accepting online, mobile, or in-store payments. Besides enabling card and bank payments, they offer various services that enhance the payment experience for customers and merchants.

A Visa-backed automated system helps merchants prevent chargebacks by resolving customer disputes with immediate refunds based on predefined rules. This proactive approach addresses disputes before they escalate, protecting the merchant's dispute ratio, reducing fees, and enhancing customer experience.

A financial transaction that reverses a previously processed payment, returning funds to the customer. Merchants typically initiate refunds for various reasons, including product returns, cancellations, or dispute resolutions.

A percentage of transactions resulted in a refund.

A preconfigured pattern a transaction follows in case the original charge attempt failed. A common use case would be processing failed subscription auto-renewal payments (e.g., setting up charge attempts repeated with a specific frequency).

A set of knowledge, skills, services, techniques, and systems that payment processors use to filter transactions based on associated risk.

An advanced payment gateway feature optimizes online transactions using algorithms and real-time data to route them to the best acquiring bank or processor based on success rate, cost, card type, and location, increasing approval rates, reducing costs, and enhancing efficiency.

A general tax on the sale of goods or services paid at the time of the transaction in the US. Sales tax rates vary by location, with each state and locality setting its own rate.

A security protocol required by regulatory authorities, like the EU's Revised Payment Services Directive (PSD2), to improve authentication and protect electronic payment transactions.

A software development kit (SDK) is a set of tools for easy installation. In payments, this SDK enables in-app payments on mobile devices by embedding a card entry form in a mobile application.

The mechanism divides the payment into a principal amount and a service fee, lowering chargeback and VAMP rates by increasing successful transactions. This generates extra tokens for rotation, prolonging the subscription lifecycle. The flexible monetization approach enables adaptation of the revenue model to various markets and audiences without altering the base.
*an internal name of a specific logic

Refers to the final stage of payment, where the acquiring bank collects funds from the cardholder's issuing bank and deposits them into the merchant's account, minus any processing fees.

A payment processing method where all stages of a transaction occur in a single message. Mostly used for transactions that require PIN confirmation.

A card decline that doesn’t stop further charge attempts. A soft-declined transaction usually follows cascading and retry patterns.

Refers to initiating a payment, marking the start of the transaction. Clicking the "Submit" button or link signals the user's intent to proceed, activating the transfer of funds or purchase completion.

An automated system charges customers at fixed intervals (e.g., monthly, annually) for ongoing access to a service or product. This model provides businesses with a predictable revenue stream and customers with continuous access, often at a lower cost per item through convenient recurring payments.

The report that issuing banks send to Visa for fraudulent transactions in its Risk Identification Service helps assess merchant risk regarding fraud and chargebacks. Since fraud occurrences correlate with chargeback frequency, data that identifies fraud issues can aid in managing chargebacks.

A unique payment card identifier represents encrypted sensitive card information stored on a device or website. Hiding real card details behind tokens enhances transaction security and reduces fraud risk. A token is generated during the initial charge and used for autocharges and one-click orders.

The process of reinitializing a recurring payment involves transforming autocharge and one-click into an initial payment, which can be transferred to another MID. It is used to redirect traffic from closed MIDs due to blocked currencies, locations, or card brands, and to enhance throughput for specific user segments.

The procedure for selecting another token among the active buyer tokens

The process of binding non-tokenized subscriptions to an available token that meets the configuration conditions

A process that occurs when a customer pays for goods or services. It typically involves authorization, capture, and settlement.

A unique identifier assigned to a financial transaction within a payment card network serves as a reference key that tracks the transaction, given by the payment provider

UUIDs ensure uniqueness through a combination of components. They consist of 128 bits represented as a 36-character string divided into five sections, separated by hyphens in the pattern 8-4-4-4-12. The identifier uniquely represents information in computer systems, with the record number's order being irrelevant.

An offer of a product that enhances the primary deal, increasing cost while adding value. This strategy encourages customers to choose a higher-end version than intended and enables selling multiple items or a single, more valuable item.

A consumption tax is assessed on the value added to goods and services. It applies to most goods and services purchased for use or consumption in the UK, EU, US, and several other countries worldwide.

A fraud prevention measure that monitors the frequency or speed of transactions for specific data points, such as credit card numbers, emails, or IP addresses.

A financial operation that cancels a credit card transaction before settlement is called a void. Voiding removes the authorization, preventing it from appearing on the customer’s account, unlike a refund, which reverses a transaction only after settlement.

An automated message (an HTTP POST request) from a payment service to your application is triggered by specific events, such as a successful payment or a failed transaction.

This protocol enhances security for online card transactions by verifying the cardholder's identity, reducing unauthorized transactions and fraud liability. It involves three key participants: the cardholder, merchant, and issuer.