This payment glossary gives short, plain definitions of the payment, banking and crypto terms we use on SharPay. Each term links to a full guide.
3
3-D Secure 3DS
An extra check of the cardholder during an online payment, usually a code or a confirmation in the banking app. It shifts liability for fraud from the merchant to the issuer.
Learn more: 3-D Secure
A
A2A payment account-to-account payment
A payment that moves money directly from the payer’s bank account to the payee’s, without card networks in between.
Learn more: A2A payment
Account updater
A card-network service that sends a merchant the new card details when a customer's card is reissued, so subscriptions keep charging without asking the customer again.
Learn more: account updater
Acquiring merchant acquiring
Acceptance of card payments for a merchant by a licensed acquirer: it authorises each payment, collects the funds from card schemes and settles them to the merchant.
Learn more: acquiring
Alternative payment methods APM
Ways to pay other than cards: bank transfers, e-wallets, local payment schemes, crypto.
Learn more: alternative payment methods
AML anti-money laundering
The rules and checks financial institutions use to detect and stop money of criminal origin, from customer screening to transaction monitoring and reporting.
Learn more: AML
Approval rate authorization rate
The share of payment attempts the issuers approve. It is the number that decides how much traffic turns into revenue.
Learn more: approval rate
Authorization card authorization
The issuer’s approval of a card payment at the moment of purchase. It confirms the card is valid and the funds are there, and reserves the amount.
Learn more: authorization
B
Bank account
An account at a bank or another licensed institution that holds money and is used for payments and transfers.
Learn more: bank account
BIC SWIFT code
The code that identifies a bank in international transfers, 8 or 11 characters long.
Learn more: BIC
BIN bank identification number
The first six to eight digits of a card number. They identify the issuer, the card type and the country.
Learn more: BIN
Blockchain
A shared digital ledger where transactions are recorded in linked blocks and cannot be changed after confirmation. It is the base layer for cryptocurrencies and stablecoins.
Learn more: blockchain
Business IBAN
An IBAN account opened in a company's name and used to receive and send business payments, separate from the owners' personal money.
Learn more: business IBAN
C
Card decline code
A short code the issuing bank returns with a refused card payment. It tells the merchant whether to retry, ask the customer for action or fix something on their side.
Learn more: card decline code
Card issuer issuing bank
The bank or institution that issues a payment card to the cardholder and approves or declines each payment made with it.
Learn more: card issuer
Card-not-present fraud CNP fraud
Fraud with card details used online or by phone, where the physical card is never shown. It is the main source of fraud chargebacks in e-commerce.
Learn more: card-not-present fraud
Chargeback
A forced reversal of a card payment that the cardholder starts through their bank. The merchant loses the amount and pays a fee unless the dispute is won.
Learn more: chargeback
Clearing payment clearing
The exchange of transaction details between the acquirer and the issuer after authorization, so both sides agree what is owed before money moves.
Learn more: clearing
Contactless payment NFC
A card or phone payment made by holding the device near the terminal. It works over NFC, a short-range radio standard.
Learn more: contactless payment
Corporate account
An account held by a company for its day-to-day operations: receiving revenue, paying suppliers and salaries, holding balances in several currencies.
Learn more: corporate account
Corporate card
A payment card issued to an employee on the company's account, with spending limits set by the company.
Learn more: corporate card
Correspondent bank
A bank that passes an international transfer on when the sender’s and the recipient’s banks have no direct relationship. Each one can take a fee.
Learn more: correspondent bank
Crypto card
A payment card that lets you spend cryptocurrency or stablecoins: the balance is converted to fiat at the moment of payment.
Learn more: crypto card
Crypto mass payouts
Sending many crypto or stablecoin payments in one batch, for example to partners, affiliates or freelancers in different countries.
Learn more: crypto mass payouts
Crypto off-ramp crypto to fiat
A service that turns cryptocurrency back into fiat money and sends it to an account or a card.
Learn more: crypto off-ramp
Crypto on-ramp fiat to crypto
A service that turns fiat money into cryptocurrency, for example buying USDT with euro.
Learn more: crypto on-ramp
Crypto payment gateway
A service that lets a website accept payments in cryptocurrency and, if needed, convert them to fiat before settlement.
Learn more: crypto payment gateway
Crypto payment processing crypto processing
Accepting payments in cryptocurrency with transaction checks, conversion and settlement to the merchant.
Learn more: crypto payment processing
Crypto wallet
Software or a device that holds the private keys to your crypto and lets you send, receive and store coins.
Learn more: crypto wallet
Currency conversion fee currency exchange fee
The cost of changing money from one currency to another: an explicit fee, a markup on the exchange rate, or both.
Learn more: currency conversion fee
Current account
An everyday account for receiving income and making payments, as opposed to a savings or deposit account.
Learn more: current account
Custodial wallet crypto custody
A crypto wallet where a provider holds the keys on the customer’s behalf, much like a bank holds deposits.
Learn more: custodial wallet
CVV CVC
The three-digit security code on the back of a card, used to confirm online payments. Merchants are not allowed to store it.
Learn more: CVV
D
Debit card
A card that spends money already on the account, unlike a credit card, which spends money borrowed from the issuer.
Learn more: debit card
Dispute card dispute
A cardholder’s claim against a payment, filed through their bank. If it is not resolved, it becomes a chargeback.
Learn more: dispute
Dunning dunning management
The process of recovering failed subscription payments: retries, reminders to the customer and card updates before the subscription is cancelled.
Learn more: dunning
E
Electronic money institution EMI
A licensed company that issues e-money and provides payment accounts, cards and transfers without being a bank.
Learn more: electronic money institution
E-money electronic money
Money stored electronically and issued by a licensed e-money institution. It is used for payments and transfers in the same way as money on a bank account.
Learn more: E-money
Escrow escrow account
Holding a buyer’s money with a third party until the deal is completed, then releasing it to the seller.
Learn more: escrow
Euro IBAN
An IBAN account in euro that receives and sends SEPA and SWIFT transfers.
Learn more: euro IBAN
E-wallet
An online account that stores money and makes payments from a phone or browser, without a card in hand.
Learn more: E-wallet
F
Fiat fiat currency
Money issued by a state, such as the euro or the dollar, as opposed to cryptocurrency.
Learn more: fiat
Fraud prevention anti-fraud
Rules and models that score each payment and block or check the suspicious ones before they are approved.
Learn more: fraud prevention
Friendly fraud chargeback fraud
A chargeback from a real customer who made the purchase and then disputes it, for example after forgetting about a subscription.
Learn more: friendly fraud
H
Hard decline do not honor
A final refusal: the card is closed, lost or stolen. Retrying does not help and can draw attention to the merchant’s traffic.
Learn more: hard decline
High risk high-risk payments
A risk category for businesses whose payments are more likely to end in chargebacks, fraud or regulatory trouble. It means stricter checks, higher fees and often a rolling reserve.
Learn more: High risk
High-risk business
A business that acquirers place in a higher risk category because of its industry, chargeback level, regulation or sales model.
Learn more: high-risk business
High-risk merchant account
A merchant account for businesses that standard acquirers decline. It comes with stricter onboarding, higher fees and often a rolling reserve.
Learn more: high-risk merchant account
High-risk payment gateway
A payment gateway built for high-risk merchants: several acquiring routes, fraud filters and chargeback tools in one connection.
Learn more: high-risk payment gateway
Hosted payment page payment page
A payment form hosted by the provider instead of the merchant’s own site, which keeps card data away from the merchant.
Learn more: hosted payment page
I
IBAN International Bank Account Number
A standard account number of up to 34 characters that identifies an account and its country for international transfers.
Learn more: IBAN
Interchange fee
The part of every card payment fee that goes to the card issuer. It is set by the card schemes and is the largest part of what a merchant pays.
Learn more: interchange fee
International money transfer
Sending money to an account in another country, usually by SEPA in euro or by SWIFT in other currencies.
Learn more: international money transfer
Internet acquiring
Acquiring for online sales: accepting card payments on a website or in an app.
Learn more: internet acquiring
Involuntary churn
Subscribers lost because their payment failed, not because they decided to cancel.
Learn more: involuntary churn
K
KYB Know Your Business
Verification of a company before it gets a financial service: registration, owners, directors and the business it actually runs.
Learn more: KYB
KYC Know Your Customer
Identity verification of a person before they get a financial service, usually an ID document and a selfie or video check.
Learn more: KYC
L
Low risk
The category for businesses with predictable sales and few disputes, such as a typical online shop. They get the simplest onboarding and the lowest fees.
Learn more: Low risk
M
MATCH list
A Mastercard database of merchants whose accounts were closed for reasons such as excessive chargebacks or fraud. A listed merchant finds it hard to get a new account.
Learn more: MATCH list
MCC merchant category code
A four-digit code that tells card schemes what kind of business a merchant runs. It affects fees, risk checks and whether some cards are accepted.
Learn more: MCC
Merchant account
An account that lets a business accept card payments: the acquirer collects customer payments into it and settles them to the business.
Learn more: merchant account
Merchant account declined
A refusal by an acquirer to open a merchant account, most often because of the industry, chargeback history or missing documents.
Learn more: merchant account declined
Merchant discount rate MDR
The total percentage a merchant pays the acquirer for each card payment, covering interchange, scheme fees and the acquirer’s margin.
Learn more: merchant discount rate
Middle risk medium risk
The category between low and high risk: subscriptions, travel and online services that need closer monitoring than a regular shop but do not fall into high risk.
Learn more: Middle risk
Mobile banking
Managing an account and payments from a phone app: transfers, card payments, statements and card settings.
Learn more: mobile banking
Multi-currency account
An account that holds balances in several currencies at once, so money can be received and paid out without converting it each time.
Learn more: multi-currency account
N
Neobank
A financial service that works only online, through an app, without branches.
Learn more: neobank
Network fee gas fee
The fee paid to a blockchain network for processing a transaction. It depends on the network and how busy it is.
Learn more: network fee
Non-resident company account
An account for a company registered in one country that operates or receives payments in others.
Learn more: non-resident company account
O
Open banking
Secure access for licensed third parties to account data and payments, with the account holder's consent, through standard APIs.
Learn more: open banking
P
PayFac payment facilitator
A company that onboards sub-merchants under its own master merchant account and handles their payments.
Learn more: payFac
Payment card debit card
A plastic or virtual card linked to an account and used to pay in shops, online and to withdraw cash.
Learn more: payment card
Payment gateway
The technical service that passes payment data from a website or app to the acquirer and returns the result.
Learn more: payment gateway
Payment integration payment gateway integration
Connecting a website or app to a payment gateway so customers can pay at checkout, through a plugin, a hosted payment page or an API.
Learn more: payment integration
Payment link pay by link
A link to a ready payment page that a business sends by email or chat. The customer opens it and pays without a website checkout.
Learn more: payment link
Payment orchestration
A layer that connects several acquirers and payment methods behind one integration and decides where each payment goes.
Learn more: payment orchestration
Payment processing
Everything that happens between the customer paying and the merchant receiving funds: authorisation, clearing, settlement.
Learn more: payment processing
Payment processing fees merchant fees
What a merchant pays to accept payments: a percentage per transaction, fixed fees and sometimes monthly charges.
Learn more: payment processing fees
Payment processor payment processing company
A company that moves card payment data between the merchant, the card schemes and the banks, and handles authorisation and settlement.
Learn more: payment processor
Payment retry
Repeating a failed payment later, on a schedule, to recover soft declines without the customer's involvement.
Learn more: payment retry
Payment routing payment cascading
Sending a payment to another acquirer when the first one declines it, or choosing the route with the best chance of approval.
Learn more: payment routing
Payment service provider PSP
A company that lets businesses accept and send payments, combining acquiring, a gateway and other services under one contract.
Learn more: payment service provider
Payment system
The rules, technology and participants that move money from payer to payee, from card schemes to bank transfer networks.
Learn more: payment system
Payout hold funds on hold
A temporary freeze of the money a provider owes a merchant, usually while it reviews risk, disputes or documents.
Learn more: payout hold
Payouts mass payouts
Sending many outgoing payments at once, for example to sellers, partners or contractors.
Learn more: payouts
PCI DSS
The card industry security standard for anyone who stores, processes or transmits card data.
Learn more: PCI DSS
Personal IBAN
An IBAN account in a private person’s name for receiving salary, payouts and transfers and for everyday payments.
Learn more: personal IBAN
Politically exposed person PEP
A person with a prominent public role, or their close family or associates. Financial providers apply extra checks to them.
Learn more: politically exposed person
P2P payment peer-to-peer
A transfer of money directly from one person to another, usually through an app.
Learn more: P2P payment
Pre-authorization pre-auth hold
A temporary hold of an amount on the card without charging it, used by hotels, car rentals and deposits. The final charge comes later or the hold is released.
Learn more: pre-authorization
Prepaid card
A card you load with money in advance and spend only what is on it, with no credit line.
Learn more: prepaid card
Private key
The secret key that signs crypto transactions and proves ownership of the coins at an address.
Learn more: private key
PSD2
The EU payment services directive that introduced open banking and strong customer authentication.
Learn more: PSD2
R
Recurring billing
Automatic charging of a customer on a schedule, for example monthly for a subscription.
Learn more: recurring billing
Recurring invoice
An invoice a business issues to a client on a fixed schedule, with the same amount and dates and no manual work each month.
Learn more: recurring invoice
Refund
Money a merchant returns to a customer on its own initiative. Unlike a chargeback, it carries no penalty fee and does not count against the merchant.
Learn more: refund
Representment chargeback representment
The merchant’s answer to a chargeback with evidence that the payment was valid. If the issuer accepts it, the money comes back.
Learn more: representment
Rolling reserve
A share of each settlement that the acquirer holds back for a set period to cover future chargebacks and refunds.
Learn more: rolling reserve
S
Sanctions screening sanctions check
Checking customers and payments against sanctions lists before an account is opened or money is sent.
Learn more: sanctions screening
Seed phrase recovery phrase
A set of 12 or 24 words that restores a crypto wallet. Whoever has it controls the funds, so it is never shared.
Learn more: seed phrase
SEPA Single Euro Payments Area
The system for euro transfers between European countries, usually free or cheap and completed within a business day.
Learn more: SEPA
SEPA Direct Debit
A way for a business to collect euro payments from a customer’s account with their prior permission, often used for subscriptions.
Learn more: SEPA Direct Debit
SEPA Instant instant SEPA transfer
A euro transfer within the SEPA area that arrives in seconds, at any time of day.
Learn more: SEPA Instant
Settlement payment settlement
The actual transfer of money for cleared transactions: the issuer pays the acquirer, and the acquirer pays the merchant.
Learn more: settlement
Settlement period T+1
The time between a customer paying and the money reaching the merchant, written as T+1, T+2 and so on in business days.
Learn more: settlement period
Smart contract
A program on a blockchain that runs automatically when its conditions are met.
Learn more: smart contract
Soft decline
A temporary refusal, such as insufficient funds or an unfinished check. The same card may work later, so a scheduled retry is allowed.
Learn more: soft decline
Source of funds
Where the money in an account or a payment comes from. Providers may ask for documents that show it, such as contracts or statements.
Learn more: source of funds
Split payment escrow
A payment that a marketplace divides between sellers and itself, sometimes holding funds until the order is delivered.
Learn more: split payment
Stablecoin
A cryptocurrency whose price is pegged to a fiat currency, most often the US dollar, such as USDT or USDC.
Learn more: stablecoin
Strong Customer Authentication SCA
The European requirement to confirm online payments with two of three factors: something you know, have or are.
Learn more: strong Customer Authentication
Sub-merchant
A business that accepts payments under a platform’s or PayFac’s merchant account instead of its own.
Learn more: sub-merchant
Subscription billing
Software that charges subscribers on schedule, handles plan changes, trials and failed payments, and issues invoices.
Learn more: subscription billing
SWIFT
The international network banks use to send payment messages between countries and currencies.
Learn more: SWIFT
T
Token
A digital asset issued on an existing blockchain, as opposed to a coin that runs on its own network.
Learn more: token
Tokenization payment tokenization
Replacing a card number with a random token, so the merchant can charge the card again without storing the real number.
Learn more: tokenization
Transaction monitoring
Ongoing review of payments for patterns that point to fraud or money laundering.
Learn more: transaction monitoring
TRC-20 and ERC-20
Token standards on the Tron and Ethereum networks. The same USDT exists on both, and it must be sent on the network the recipient uses.
Learn more: TRC-20 and ERC-20
U
Ultimate beneficial owner UBO
The person who ultimately owns or controls a company, usually with 25 percent or more. Payment providers must identify them.
Learn more: ultimate beneficial owner
USDT Tether
The most widely used stablecoin, pegged to the US dollar and issued on several blockchains.
Learn more: USDT
V
VAMP Visa Acquirer Monitoring Program
A Visa programme that tracks fraud and dispute levels of merchants and acquirers and penalises those above the thresholds.
Learn more: VAMP
Virtual card
A payment card that exists only as card details in an app, used for online payments and subscriptions.
Learn more: virtual card
Virtual IBAN
An IBAN that routes incoming payments to a main account, so a business can use separate numbers for clients, countries or purposes.
Learn more: virtual IBAN
W
Wallet address crypto wallet address
A string of letters and numbers that identifies a crypto wallet on a blockchain. Coins are sent to it, much like an account number.
Learn more: wallet address
White-label e-wallet
A ready e-wallet platform that a fintech launches under its own brand.
Learn more: white-label e-wallet
White-label payment gateway
A payment gateway that a company runs under its own brand on another provider's technology.
Learn more: white-label payment gateway
White-label PSP
A full payment service platform rented and branded by a company, so it can offer payments to its own clients.
Learn more: white-label PSP
How to use this payment glossary
Find a term by its first letter, read the short definition and follow the link to the full guide. The payment glossary grows as we publish new articles. Official rules of the SEPA schemes are published by the European Payments Council.