The payment glossary is your go-to reference sheet for understanding key payment-related terms and concepts. Whether you're new to the world of payments or need a quick refresher, this glossary will help you become more familiar with important industry terminology.
Overview
In this section, you’ll find a comprehensive list of commonly used payment terms along with their definitions. This overview is designed to provide clear explanations to help you navigate through payment processes and concepts with confidence. If you need further assistance, please contact the NomuPay support team.
Term | Definition |
---|---|
Authorization | The process of verifying whether a payment card is valid and has sufficient funds available for a transaction. Usually included as payment type 'PA'. |
Acquirer | A financial institution that receives and settles processed transactions under a merchant account. |
Chargeback | A reversal of a credit card transaction, initiated by the cardholder’s issuing bank, usually due to disputes. |
Card on File (COF) | The process of storing (tokenizing) a payment card associated with a customer’s account for recurring payments or future transactions. |
Payment Gateway | The service that authorizes and processes credit card payments for online and in-store retailers. |
Tokenization | The process of replacing sensitive card information with a unique token. |
3D Secure | An additional layer of security for online transactions, requiring cardholder authentication. |
Settlement | The process of transferring funds from a customer’s bank to the merchant after a transaction has been authorized. |
Interchange Fees | Fees paid by the merchant’s bank to the cardholder’s bank for processing card payments, typically passed on to the merchant. |
Point of Sale (POS) | The place where a retail transaction is completed, either through a physical or digital interface. |
Reversal (Void) | A transaction that is canceled before settlement, preventing funds from being withdrawn from the cardholder’s account. |
Scheme (Scheme Approval) | A card scheme refers to a payment network (such as Visa or Mastercard) that sets rules for processing transactions. Scheme approval ensures compliance with these rules. |
Strong Customer Authentication (SCA) | A European regulatory requirement for online payments that requires two-factor authentication for enhanced security. |
Terminal Identification Number (TID) | A unique identifier assigned to a merchant’s payment terminal to track transactions. |
One-Click Payment | A streamlined checkout process where customers can complete a transaction with a single click using stored payment details. |
Merchant Service Provider (MSP) | A third-party provider that offers payment processing services to merchants. |
Merchant ID Number (MID) | A unique identifier assigned to a merchant by an acquiring bank for processing payments. |
Merchant | A business or individual that accepts payments for goods or services. |
Merchant Account | A type of bank account that allows businesses to accept card payments. |
Know Your Customer (KYC) | A regulatory process requiring businesses to verify the identity of their customers to prevent fraud and financial crime. |
Issuer | A financial institution (usually a bank) that provides credit or debit cards to consumers and manages their accounts. |
Blended Rates | A pricing model where all transaction fees are combined into a single rate, rather than itemized separately. |
Payment Processor | A company that handles transactions between merchants, acquiring banks, and card networks. |
Electronic Funds Transfer (EFT) | A digital transfer of funds between bank accounts, including direct deposits and wire transfers. |
Dispute | A formal claim made by a cardholder challenging a transaction, which may result in a chargeback. |
TC40 | A report generated by card networks (such as Visa) containing fraud data associated with transactions, used to monitor risk and compliance. |
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