Glossary of Payment Terms
Discover clear definitions of key payment and fintech terms in our comprehensive glossary. Learn essential industry terminology to stay informed.
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2DS
2DS (Two-Domain Secure) is a simplified version of 3-D Secure used in some online card payments.
3DS
3-D Secure (3DS) is an extra security step for online card payments. It helps confirm that the person making the payment is the real cardholder.
A
A2A payments
A2A payments are direct transfers between bank accounts without using card networks.
Accounts payable
Accounts Payable (AP) is the money a business owes to its suppliers or vendors for goods and services received but not yet paid.
Accounts receivable
Accounts Receivable is the money owed to a business by its customers for goods or services already delivered but not yet paid for.
ACH
ACH (Automated Clearing House) is a network in the US that processes electronic bank-to-bank payments.
Acquire / acquiring
Acquiring refers to the process by which an enterprise receives card payments through a financial institution known as the acquirer. Merchant acquiring services link sellers to the payment system, allowing them to handle transactions from cardholders with Visa, Mastercard, and other credit and debit cards. This incorporates safely moving cash from the customer's issuing bank to the merchant’s account.
AFT
Electronic payment known as Account Funding Transaction (AFT) transfers funds from the card holder’s account to an alternate storage account e. g. wallet, merchant account or bank. It’s a secure financial “pull” used to add funds to a prepaid card or transfer balances. Many people often ask, “what is AFT?”, and it essentially refers to this type of secure, automated transfer. An account funding transaction is vital in digital payments, supported by Visa, Mastercard, and other card providers.
API
An API (Application Programming Interface) lets different software systems talk to each other. It allows apps to share data or functions—for example, a weather app showing Google Maps.
Approval (in Payment Systems)
Approval is the final result of the entire payment flow—after initiation, authentication, authorization, and all required checks and permissions. It represents the outcome of the payment process, confirming that a transaction has been fully processed and recorded according to company policies. Companies use approval payment solutions to improve accounting accuracy and maintain control over cash and financial operations.
Approval rate
Approval rate is the percentage of payment attempts successfully approved by issuers or providers.
B
B2B payments
B2B payments are payments made between businesses for invoices, services, products, or partnerships.
B2B payment solutions
Compare B2B payment solutions for enterprise: ACH, wire transfers, virtual cards, and payment platforms.
B2C payments
B2C payments are payments made by individual customers to businesses for goods or services.
B2B2C payments
BAAS
Banking as a Service (BaaS) is a model where banks provide their financial services—like accounts, payments, or loans—via APIs to third-party companies.
Bank identification number
A bank identification number (BIN) refers to a unique identification number bank and card issuers use for their identification in any transaction. Usually, it constitutes the first six digits of a payment card and serves to verify from where the card has been issued. BINs play an integral role in payment facilitation between banks, merchants, and customers within the UK. Companies like Payneteasy use BINs to manage secure transactions and protect users’ financial information from fraud.
Bank payment processing
UK businesses can safely transact with the help of bank payment processing, which links customers, retailers as well as financial institutions for effective fund transfers. Merchants can easily manage credit and other payments with the help of Payneteasy.
Batch payment processing
Batch payment processing is the grouping of multiple payments for processing at scheduled intervals.
Business identifier code
Business Identifier Code is a standardized code used to identify financial institutions in payment messaging.
C
C2C payments
C2C payments are payments made directly between individual consumers, often through digital platforms.
Chargeback
A chargeback happens when a customer disputes a credit or debit card payment, asking their bank to reverse the transaction.
Chargeback prevention
Learn how to prevent chargebacks: causes, prevention strategies, alert systems, and fraud tools.
Checking account
A checking account is a type of bank account for everyday financial transactions. In the UK, a checking bank account allows users to manage money, make payments, and access funds conveniently. You can pay bills, get your salary paid into it, and have access to your cash via debit cards, ATMs and online banking.
Clearing
Clearing in payments is the process where banks or payment systems exchange information to confirm and prepare a transaction for settlement.
Credit card
A credit card is a small plastic or digital card that lets you borrow money to make purchases, up to a set limit. You pay the money back later, often with interest if not paid in full each month.
Credit score
A credit score is a number that represents your creditworthiness. In the UK, it’s calculated by agencies like Experian, Equifax, and TransUnion. The score is based on your borrowing and repayment history.
CVC/CVV
If you’re wondering “what is CVV on card”, CVC (Card Verification Code) and CVV (Card Verification Value) act as an extra layer of protection for online and mobile payments. CVC and CVV are 3- or 4-digit security codes used to verify card-not-present transactions. It keeps banking information safe from being compromised by fraudulent activities.
D
Debit
A debit is an accounting term for money taken out of an account. In banking, it means a payment or withdrawal that reduces your account balance.
Debit card
A debit card is a payment card that lets you spend money directly from your bank account. When you use it, the money is withdrawn immediately.
Digital wallet
A digital wallet is an app or software that stores your payment information securely on your phone or computer.
Dispute
A payment dispute occurs when a customer questions or challenges a transaction, whether it involves a card payment or any other type of error in the payment process. In simple terms, what is dispute? It’s a process that permits the cardholder to initiate an investigation concerning any transaction they believe to be inaccurate, fraudulent, or unfair. As much as this process protects consumers, it may hurt a business in terms of lost revenue or added fees.
E
E-commerce payment gateway
An e-commerce payment gateway is a protected online platform that lets customers pay for products or services on a website. It acts as a bridge between the customer, the merchant’s website, and the financial institutions involved in the transaction. This platform ensures transaction safety, speed, and security. Payneteasy is one such platform in the UK, offering reliable e-commerce payment gateway solutions and helping businesses to process transactions smoothly while protecting their customers from fraud.
Ecommerce payment processing
How ecommerce payment processing works: online payment flow, gateway setup, payment methods, security requirements, and cost optimization.
Electronic funds transfer
The electronic funds transfer (EFT) enables the movement of funds from one bank account to another account without the necessity of cash or cheques. Many people and businesses in the UK use it to make payments, deposits as well as transfers; this simplifies transactions and enhances both the speed and security of transactions.
Embedded payments
Embedded payments integrate payment processing directly into software platforms. Learn how embedded finance works and its benefits for SaaS and marketplaces.
Encryption
Encryption is a way to protect information by converting it into a secret code that only authorized people can read.
Enterprise payment gateway
An enterprise payment gateway handles high-volume, multi-currency transactions with advanced routing, compliance, and reporting.
F
Faster payments
Faster Payments is a UK banking service that allows near-instant bank transfers between accounts, usually within seconds or minutes.
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I
International payment processing
How international payment processing works: multi-currency support, cross-border fees, local payment methods, and compliance.
Issuer
Issuer is the financial institution that provides a customer's payment card or account.
K
KYB
KYB (Know Your Business) is a process used by financial institutions to verify the identity and legitimacy of a company before providing services.
KYC
KYC (Know Your Customer) is a process used by banks and financial services to verify a customer’s identity. It usually involves checking documents like a passport or utility bill.
M
Mastercard SecureCode
Mastercard SecureCode is an added security layer for online payments with Mastercard. It requires cardholders to enter a personal code at the point of sale, which helps to ensure that the transaction is being authorized by the actual cardholder. It works by adding a password protection step during checkout, thus providing a greater level of protection against fraud and potential chargebacks.
Merchant
A merchant is a person or business that sells goods or services and accepts payments from customers.
Merchant account
A merchant account is a specific type of bank account that allows businesses to accept and process card payments. It helps in making transactions possible and provides access to money sooner. For UK businesses to streamline payment processing, providers like Payneteasy offer reliable support and competitive rates.
Merchant account vs payment gateway
Compare merchant accounts vs payment gateways: what each does, how they differ, and why you need both.
Merchant identification number
A Merchant Identification Number (MID) is a special number given to merchants. It is used in the payment processing system so that transactions can be routed to the right bank account for deposit. The bank and payment processor use the MID to keep track of transactions; it also helps them authorize and post payments correctly. Understanding what is merchant identification number is crucial for any business managing card and online payments.
Mobile payment
A mobile payment is a way to pay for goods or services using a smartphone or other mobile device.
Multi-currency payment gateway
A multi-currency payment gateway processes transactions in multiple currencies, enabling global commerce.
Multiple payment gateway integration
Learn how to integrate multiple payment gateways efficiently. Compare direct integration vs payment orchestration.
O
OCT
An Original Credit Transaction (OCT) is a type of payment that allows money to be sent to a card, rather than taken from it. It’s commonly used for payouts like refunds, gig worker earnings, or money transfers.
Overdraft
An overdraft is a bank service that lets you spend more money than you have in your current account, up to an agreed limit.
P
Payment aggregator
A payment aggregator pools multiple merchants under one master account to simplify onboarding and payment acceptance.
Payment facilitator
A payment facilitator (PayFac) enables sub-merchants to accept payments under its master merchant account.
Payment fraud prevention
Learn about payment fraud prevention: types of fraud, detection methods, and best practices for protecting transactions.
Payment gateway
A payment gateway is a technology platform that acts as an intermediary in electronic financial transactions. To understand the payment gateway meaning, here’s a simple explanation: it acts as a digital bridge connecting merchants and payment institutions, while implementing security measures. The payment gateway is closely tied to security—it ensures that sensitive transaction data is encrypted and transmitted safely. For businesses in the UK, Payneteasy offers a reliable gateway payment system that combines speed, security, and easy integration for online payments. Without this layer, online purchases would be highly vulnerable to fraud.
Payment gateway API integration
Learn how to integrate a payment gateway via API. Compare server-to-server, hosted forms, and payment cashier methods.
Payment gateway for startups
Choose the right payment gateway for your startup. Compare build vs buy vs white-label options.
Payment gateway integration process
Complete guide to payment gateway integration: 6 steps from sandbox to production.
Payment method
A payment method is any way you can pay for goods or services.
Payment orchestration
Learn what payment orchestration is, how it works, and why businesses use orchestration layers to manage multiple PSPs.
Payment orchestration vs gateway
Compare payment orchestration vs payment gateway: key differences in routing, failover, multi-PSP management, and costs.
Payment processor
A payment processor is a company or service that handles transactions between a customer’s bank and a merchant’s bank.
Payment reconciliation
What is payment reconciliation? Learn how to match transactions across gateways, banks, and accounting systems.
Payment service provider
A payment service provider UK is a company that makes it easy for businesses to accept payments online. They act as go-betweens for merchants, banks and customers; making sure all transactions are processed safely and efficiently. In the UK, payment service providers mean a lot to businesses because they facilitate easy settlements, reduce exposure to fraudulent activities, and support different means of payments. Companies like Payneteasy provide infrastructure and platforms that help PSPs and merchants operate more efficiently.
Payout
The question that is often asked in business and finance is: "What is a payout?" Payout refers to the distribution of funds from one party to another, typically as part of a financial obligation or transaction. Payouts make cash accessible and manageable, supporting smooth financial operations for UK businesses.
PCI DSS
PCI DSS (Payment Card Industry Data Security Standard) is a set of security rules that businesses must follow to protect cardholder data.
Personal identification number
A Personal Identification Number (PIN) is a short numerical code used to identify a person when carrying out financial transactions. In general, it can be said that the PIN acts as a digital key proving ownership of some bank card or account and mainly plays the role of security by protection against unauthorized access to any information or payments.
Prepaid card
A prepaid card is a payment card loaded with a fixed amount of money in advance. You can spend only the amount available on the card, making it different from credit or debit cards linked to bank accounts.
Processor
Processor is a service provider that handles payment authorization, clearing, and settlement.
R
Recurring payments
Recurring payments are automatic payments initiated at regular intervals, commonly used in the UK for subscriptions and services to facilitate businesses with easy revenue collection. Payneteasy is a trusted payment service provider that simplifies recurring payments, allowing companies to manage customer accounts efficiently and automate billing processes.
Recurring payment processing
How recurring payment processing works: subscription billing, auto-renewals, card-on-file, retry logic.
Risk management
Risk Management is the process of identifying and reducing potential financial or security problems, like fraud or chargebacks, in a business.
Routing
Payment routing is the process of directing a payment transaction through the best path or network to ensure it is authorized and completed quickly and securely. In the context of online transactions, routing helps merchants and payment providers manage multiple payment channels, ensuring each transaction reaches the endpoint in the most efficient way. By optimizing this process, businesses can reduce service fees, improve approval rates, and maintain smoother operations.
S
SAAS payment gateway
The purpose of a SaaS payment gateway system is to enable Software-as-a-Service (SaaS) businesses to securely accept and manage online payments. It links merchants’ SaaS platforms with acquiring banks, issuers, and payment processors via the internet. Such a system also automates billing procedures while ensuring that all transactions are carried out safely. Its role is critical: it ensures that payments are processed efficiently, revenue is collected on time, and customer data is protected. SaaS companies need a solid payment gateway in order to process transactions efficiently and provide their users with a convenient experience.
SAAS payment processing
SaaS payment processing services refer to the methods used by software-as-a-service companies to collect, process, route, and manage payments. Unlike the sale of products that happen once, SaaS depends on the revenue that recurs after a certain period through subscriptions that can be paid monthly or yearly. Therefore, reliable payment processing for SaaS is very important in the UK market because of various factors such as regulations, consumer expectations, and multi-currency transactions.
SEPA
SEPA (Single Euro Payments Area) is a system that simplifies bank transfers in euros across Europe. It allows people and businesses in SEPA countries to send and receive euro payments easily.
Settlement
Settlement is the last phase in payment processing when customer funds finally hit a merchant’s account. It underscores efficient financial operations, particularly in the UK. Companies like Payneteasy help make transactions simple, safe, and fast.
Subscription payment gateway
What is a subscription payment gateway? Learn how gateways handle recurring billing, card-on-file tokenization, and dunning.