The cashless payments glossary

A risk-based authentication protocol for card-not-present transactions, currently in its 2.x generation.

Automated Clearing House - a batch-processed electronic funds transfer system in the United States operated by Nacha.

A bank or processor that enables merchants to accept card payments and settles funds from the card networks.

A network identifier used to trace a specific card transaction across the settlement lifecycle.

Commerce in which AI agents complete purchases on behalf of users under delegated authority and a defined spend policy.

The issuer's real-time decision to approve or decline a specific transaction request.

Banking-as-a-Service - the delivery of regulated banking primitives through APIs by a licensed sponsor bank to a non-bank distributor.

Bank Identification Number - the leading digits of a card number that identify the issuing institution.

A cardholder verification method that authenticates the buyer using a biometric signal such as face or fingerprint.

Buy Now, Pay Later - installment credit offered at checkout, typically interest-free for short durations.

A transaction in which the card and cardholder are not physically presented to the merchant.

Central Bank Digital Currency - a digital liability of the central bank issued to households or financial institutions.

A consumer-initiated reversal of a card transaction processed through the network's dispute mechanism.

The proportion of a merchant's transactions that result in chargebacks, monitored by networks.

The process of transmitting, reconciling, and confirming payment instructions before settlement.

A scheme that verifies the payee's name against the account before a payment is initiated.

The bilateral arrangement by which banks hold accounts with each other to facilitate cross-border payments.

A network token enabled for use across jurisdictional boundaries.

A short numeric security code printed on a card used to verify card-not-present transactions.

A software application that stores tokenized payment credentials and authorizes transactions on behalf of the user.

European Banking Authority - the regulator that issues technical standards under EU payments law.

The delivery of regulated financial products inside non-financial software experiences via APIs.

The chip-card standard maintained by EMVCo, used for in-person card authentication.

An electronically captured direct-debit authorization.

An arrangement in which funds are held by a neutral party until the conditions of a transaction are met.

The U.S. Federal Reserve's real-time interbank payment service launched in 2023.

An open authentication standard for phishing-resistant credentials, widely used in passkeys.

A merchant-side service that captures, tokenizes, and routes payment data to acquirers and PSPs.

Hardware Security Module - a tamper-resistant device that performs cryptographic operations and protects keys.

A client-supplied identifier that lets a server safely de-duplicate retried write operations.

The fee paid by the acquirer to the issuer for each card transaction, set by the network.

An XML-based message standard adopted globally for payments, replacing legacy MT messages.

The bank that issued a payment card to a consumer or business and bears credit risk on its use.

A negative authorization response from the issuer.

Know Your Customer - the regulatory process of verifying a customer's identity and risk profile.

A network rule that moves chargeback liability from one party to another when defined authentication steps are completed.

An RTGS feature that nets queued payments to reduce intra-day liquidity needs.

A standing authorization to debit a payer's account under defined conditions, common in direct debit schemes.

Merchant Category Code - a four-digit code identifying a merchant's primary line of business.

The legal entity responsible for processing the transaction, regulatory compliance, and consumer relationship.

Magnetic Ink Character Recognition - the bottom-of-check encoding used in legacy U.S. paper clearing.

A scheme-issued surrogate value that replaces a PAN at the merchant and is bound to a specific context.

Replacement of the PAN with a scheme-issued token bound to a specific device, channel, or merchant.

The U.S. Office of Foreign Assets Control, which administers and enforces sanctions programs.

Regulated, consent-based access to bank account data and payment initiation through APIs.

A platform layer that routes transactions across multiple PSPs to optimize approval, cost, and resilience.

Primary Account Number - the long number printed on a payment card.

A payment flow in which funds move directly from the payer's bank account to the merchant's, often via open banking rails.

The Payment Card Industry Data Security Standard, governing the handling of cardholder data.

Personal Identification Number - a knowledge-based CVM used in card-present authorization.

Brazil's instant payment system operated by the central bank.

The European Union's revised Payment Services Directive, which mandates open banking access and strong customer authentication.

Payment Service Provider - a company that processes payments on behalf of merchants.

A payment initiated by the payer, in contrast to a pull payment initiated by the merchant.

A network flow that sends funds to a card account in near real time.

Account-to-account payments that settle in seconds, irrevocably, on 24/7 rails.

Matching transaction events to settlements and bank-account credits.

A push-based flow in which a merchant requests a payment from a payer who then approves it.

Real-Time Gross Settlement - a wholesale interbank settlement system in central bank money.

The Clearing House's Real-Time Payments network in the United States.

Strong Customer Authentication - a multi-factor authentication requirement under PSD2.

A card network such as Visa, Mastercard, or UnionPay, that sets the rules for participating institutions.

The Single Euro Payments Area - a harmonized euro-denominated payments zone.

The actual movement of funds that finalizes a payment, separate from clearing.

The defined window in which a network settles authorized transactions to participating institutions.

An authorization decline that may succeed on retry, in contrast to a hard decline.

Software-only payment acceptance on a commercial smartphone, without dedicated hardware.

A digital asset whose value is pegged to a reference asset such as a fiat currency.

A fee added by a merchant to recover the cost of accepting a particular payment method.

The global member-owned messaging cooperative used for cross-border payments and securities instructions.

A fabricated identity composed of real and fake attributes used to commit fraud.

The replacement of sensitive account data with a non-sensitive surrogate value.

An entity that issues and manages payment tokens on behalf of a scheme or institution.

A commercial bank deposit represented on a shared ledger for programmable settlement.

A PSD2 exemption that allows low-risk transactions to bypass strong customer authentication.

India's Unified Payments Interface, a real-time interbank payment system.

A consent-based recurring debit under open banking, defined by spending limits rather than fixed schedules.

A secure store of tokenized payment credentials managed by a gateway or PSP.

The process of loading a payment credential into a digital wallet.

An HTTP callback delivered by a server to notify a subscriber of an asynchronous event.

A bank-to-bank credit transfer, typically high-value and settled same-day.