Jargon Buster for Card Payments

Account Updater

Service that updates customer card details automatically for regular or repeat payments, so businesses don’t have to worry about outdated cards.

Acquirer (Acquiring Bank)

Bank or company that processes card payments for businesses, making sure funds go from the customer’s bank to the business’s bank account.

Acquirer Net Revenue

Amount the acquirer earns from processing card payments, after paying out fees to card networks.

Acquirer’s Markup

Small fee the acquirer adds to cover costs and make a profit on each transaction; often negotiable.

Acquirer Reference Number (ARN)

Unique code given to each card payment, making it easy to track a transaction through the payment process.

Address Verification System (AVS)

Checks the cardholder’s billing address against the one on file with their bank to reduce fraud.

Application Programming Interface (API)

Bit of software that lets payment systems talk to each other, making online checkouts and forms work smoothly.

Assessment Fees

Small fees paid to card networks (like Visa or Mastercard) for using their systems.

Authorisation

Process of confirming that the cardholder has enough funds to cover a payment.

Batch

Group of transactions sent to the bank for processing, usually at the end of each day.

Blended Pricing

Pricing model where all fees are combined into one rate, making it easier to understand overall costs.

Cardholder

Person who owns the card and is authorised to use it for payments.

Cardholder Verification Method (CVM)

Way to confirm the customer is the rightful card owner, often with a PIN or signature.

Card-acquiring Services

Services provided by banks or processors to help businesses accept card payments.

Card Issuer

Bank or company that issued the credit or debit card to the customer.

Card Network

Companies like Visa and Mastercard that run the systems connecting banks and businesses for card payments.

Card Number (PAN)

Unique number on the front of a credit or debit card that identifies the cardholder’s account.

Card Not Present (CNP) Transaction

Payment where the card isn’t physically present, like online or over the phone.

Card Payment System

Overall system that allows payments by credit or debit card to happen.

Card-present Transaction

Payment where the card is physically present, like in a shop using a card machine.

Card Transaction

Any payment made with a card, including purchases, refunds, and chargebacks.

Card Security Code (CVC, CVV, CID)

The 3- or 4-digit code on the card used for security, especially in online payments.

Chargeback

When a customer disputes a payment, and the bank reverses the charge, returning money to the customer.

Chargeback Fee

Fee the bank charges the business to handle a chargeback.

Chargeback Period

Time a customer has to raise a dispute about a transaction, usually between 45 and 180 days.

Chargeback Process

Steps followed to resolve a disputed transaction.

Clearing

Part of the process where payment information is exchanged between banks to approve or reject a payment.

Contactless

Payment method where the customer taps their card or device to pay, no need to enter a PIN.

Credit Card Processor

Company that manages card payment details between the customer, business, and the banks involved.

Debit

Taking money out of an account, like when a payment is made.

Decline

When a payment is refused, often due to lack of funds or suspected fraud.

Disbursement

Process of dividing and sending out funds from a completed transaction.

Discount Rate

Rate charged by processors for handling credit card payments.

Dispute

When a customer questions a payment, potentially leading to a chargeback.

Early Termination Fee

Fee charged if a business ends its contract with a payment provider early.

Ecommerce Platform

Online software that allows you to build a website and sell products or services.

Electronic Funds Transfer (EFT)

Moving money electronically from one bank account to another without cash.

Electronic Point of Sale (EPOS) System

System that allows businesses to accept in-person payments and manage inventory, often includes card machines.

EMV (Europay, Mastercard and Visa)

Chip-and-PIN standard for credit and debit cards that adds security to in-person transactions.

Fixed Pricing

Pricing model with one flat rate for processing payments, making costs predictable.

Floor Limit

Maximum amount you can charge without online authorisation from the customer’s bank.

Gateway Identification Number (GID)

Unique ID used to identify the payment network your business uses.

Incidental Fees

Extra charges for things like setting up an account, handling chargebacks, or security checks.

Interchange Plus (IC+) Pricing

Pricing model that splits the service charge into interchange fees and a processor markup, so you see each cost separately.

Interchange Plus Plus (IC++) Pricing

Similar to IC+ but also breaks down scheme fees for a clearer look at all costs.

Independent Sales Organisation (ISO)

Company that sells payment processing accounts and services on behalf of acquirers.

Independent Software Vendor (ISV)

Business providing software, like an EPOS system or e-commerce platform, to help businesses sell products.

Instant Payment Notification (IPN)

Real-time alerts to track online purchases and other transactions.

Integrated Payment

Payment system linked to business management software to keep track of sales and inventory all in one place.

Interchange

Process where fees and transaction information are exchanged between banks for payment processing.

Interchange Fee

Fee that acquirers pay to issuers for handling a payment, usually passed on to the business.

Issuer

Bank or institution that issued the credit or debit card to the customer.

Know Your Customer (KYC)

Process of verifying customer identities to help prevent fraud.

Merchant

Business or person that accepts payments for goods or services.

Merchant Account

Bank account that lets businesses accept card payments.

Merchant Account Provider

Company that helps businesses set up accounts to accept card payments.

Merchant Agreement

Contract between a business and a payment provider detailing each side’s responsibilities.

Merchant of Record (MoR)

Entity responsible for accepting payments and managing customer transactions, refunds, and disputes.

Merchant ID Number (MID)

Unique code given to a business by their payment processor to identify them in transactions.

Merchant Service Charge (MSC)

Fee that merchants pay to cover processing, network, and other service costs.

Merchant Service Provider

Company that offers payment processing and other services, like fraud protection, to businesses.

Mobile Point of Sale (mPOS)

Portable device or app that lets businesses accept payments on the go.

Multi-factor Authentication (MFA)

Security check that requires multiple types of verification, like a password and a fingerprint.

Net Settlement

Final stage where the payment is completed, and funds are distributed.

Next-day Funding

Service that lets businesses get funds from transactions as soon as the next business day.

Near Field Communication (NFC)

Contactless technology that lets customers tap to pay using a card or mobile device.

Non-sufficient Funds (NSF) Fee

Fee for transactions that bounce due to lack of funds in the merchant’s account.

Omnichannel

Sales approach that allows customers to pay in various ways, like online, in-store, or through an app.

One-click Payment

Quick payment option that saves customer details for future purchases, needing only a security code to confirm.

Operator of a Card Payment System

Company that manages a card payment system, allowing banks to issue cards and process transactions.

Payee

Person or business receiving payment in a transaction.

Payment Aggregator

Also known as a third-party processor, lets businesses accept card payments without needing their own merchant account.

Payment Card Industry (PCI)

Sector focused on managing and securing cardholder information.

PCI Data Security Standard (PCI DSS)

Required security standards for businesses that handle cardholder information, helping to prevent data breaches.

Payment Facilitator (PayFac)

Company offering card acceptance and processing services, often acting as an intermediary between merchants and banks.

Payment Gateway

Software that securely collects and sends card payment details to the payment processor for approval.

Payment Method

Type of payment used, like credit card, debit card, or bank transfer.

Payment Processor

Company that connects a merchant’s bank account with a customer’s account to process payments.

Payment Service Provider (PSP)

Company working with acquirers to enable merchants to accept electronic payments and offer other services like fraud protection.

PDQ Machine

Card machine or POS terminal used for in-person transactions.

PIN Verification

Security check where the cardholder enters their PIN to confirm their identity.

Point of Sale (POS)

Location and device where a business processes a card payment, like a card machine in a shop.

Point-to-Point Encryption (P2PE)

Encryption method that protects card data from the POS terminal to the payment processor to prevent fraud.

POS Terminal

Device used at the point of sale to process a card-present transaction.

Prepaid Card

Debit card that uses preloaded funds, not linked to a bank account.

Reconciliation

Process of matching transactions in a business’s system with bank account records.

Recurring Payment

Payment charged to a customer’s card at regular intervals, like monthly subscriptions.

Refund

Transaction that returns funds to a customer for a cancelled or returned purchase.

Scheduled Payment

Payment set to be taken from a customer’s card on a specific date.

Scheduled Fees

Regular fees that acquirers charge to keep a merchant account open, often monthly.

Scheme Fees

Fees acquirers pay to card networks for each transaction, typically passed on to merchants.

Scheme Rules

Policies and regulations that govern how card payments work, such as transaction rules and participant requirements.

Settlement

Completion of a transaction where funds are transferred to the merchant.

Standard Pricing

Another term for Blended Pricing, where all fees are combined into a single rate.

Strong Customer Authentication (SCA)

Security check for online payments requiring two forms of verification.

Terminal Fee

Fee businesses pay to rent or use a POS terminal.

Terminal Identification Number (TID)

Unique ID code for each POS terminal a business uses.

Third-party Payment Processor

Also called a payment aggregator, allowing businesses to process payments without their own merchant account.

Transaction Fee

Fee for processing each card payment, generally higher for credit cards and international cards.

Value-added Services

Extra services provided by payment processors, like data analytics and customer management tools.

Void

Cancelling a transaction before funds are transferred to the business.

White Label Payment

Payment services a company can rebrand and offer as their own.

Wholesale Fees

Fixed fees charged by card networks to use their services, non-negotiable.