Plain language, precise boundaries
Payments glossary
The same word can describe a legal role, a product layer, or a payment state. These definitions keep the distinctions visible.
61 terms · reviewed 2026-07-27- 013D Secure (3DS)
- A cardholder-authentication protocol used in online card payments. It can present a challenge or run without buyer interaction, and is commonly used to support strong customer authentication.
- 02Acquirer
- The financial institution or acquiring provider that connects a merchant's card transactions to card networks and receives settlement on the merchant side.
- 03Authorization
- The issuer-side decision to approve or decline a payment request. Approval can reserve funds, but it is not the same as capture, settlement, or payout.
- 04Authorization window
- The period in which an approved authorization can be captured before it expires. It varies by payment method, provider, network, and transaction type.
- 05Balance transaction
- A provider ledger entry that changes a merchant or seller balance, such as a payment, fee, refund, dispute, reserve movement, currency conversion, or payout.
- 06B2B
- Business-to-business: a sale where the customer is acting as a business. Tax, invoicing, payment terms, and buyer verification can differ from consumer sales.
- 07B2C
- Business-to-consumer: a sale to an individual acting as a consumer. Consumer protection, tax location, cancellation, and receipt requirements can differ from B2B.
- 08Billing anchor
- The timestamp or calendar point that determines when a subscription period renews and an invoice is created or collected.
- 09Billing layer
- Software that manages products, prices, subscriptions, invoices, usage, credits, retries, and customer changes. It may depend on a separate payment processor.
- 10Blended pricing
- A public or contracted payment rate that combines multiple underlying network, interchange, acquiring, and provider costs into one percentage and fixed fee.
- 11Capture
- The instruction to collect an authorized payment. Authorization and capture can happen together or as two separate steps.
- 12Card network
- A payment network such as Visa or Mastercard that defines rules and carries transaction messages between acquiring and issuing participants.
- 13Card on file
- A saved payment credential used for later payments. The merchant or provider normally stores a token rather than raw card data.
- 14Chargeback
- A reversal processed through a card dispute system after a cardholder challenges a transaction. It can include a separate fee and evidence deadline.
- 15Checkout
- The customer-facing flow that collects order, customer, tax, and payment information and initiates payment. It can be hosted, embedded, or custom.
- 16Cross-border fee
- An additional fee that may apply when the merchant, provider, buyer, card, or acquiring arrangement crosses defined country or regional boundaries.
- 17Currency conversion
- The exchange of one currency into another. It can occur between presentment, provider balance, settlement, or payout currencies and may include an FX fee.
- 18Descriptor
- The merchant or provider text shown on a buyer's card or bank statement. A recognizable descriptor can reduce unrecognized-payment disputes.
- 19Direct payments
- A setup in which a processor, wallet, gateway, or payment platform helps accept payment while the business normally remains the seller to the customer.
- 20Dispute
- A buyer challenge raised through a card issuer, wallet, bank, or payment method. Dispute procedures, evidence, deadlines, and outcomes vary.
- 21Dunning
- The sequence used to recover failed recurring payments through retries, payment-method updates, reminders, grace periods, and account-state changes.
- 22Effective rate
- Total modeled payment and related costs divided by the relevant revenue or payment volume. The calculation is useful only when its included costs are explicit.
- 23Entitlement
- The product access or benefit a customer should receive. It is related to subscription and payment state but should be modeled as its own decision.
- 24Foreign exchange (FX)
- The market and provider process for converting currencies. In payments, FX cost can affect the buyer, merchant, provider balance, or payout.
- 25Gateway
- Technology that securely sends payment details and transaction messages between checkout and processing or acquiring services. A gateway is not automatically the legal seller.
- 26Gross payment volume
- The total value of processed payments before subtracting refunds, disputes, provider fees, taxes, reserves, or other adjustments.
- 27IC++ pricing
- A pricing structure that exposes interchange, card-scheme fees, and provider markup as separate components instead of one blended rate.
- 28Idempotency
- A design property that lets the same request or event be processed more than once without creating duplicate charges or duplicate state changes.
- 29Indirect tax
- Transaction taxes such as VAT, GST, or sales tax. The party responsible for registration, collection, filing, and remittance depends on law and the sale structure.
- 30Interchange
- A component of card acceptance cost generally transferred between acquiring and issuing participants under network rules. It varies by card and transaction.
- 31Invoice
- A commercial record describing seller, buyer, items, price, tax, amount due, currency, and payment terms. A payment receipt and an invoice are not always the same document.
- 32Issuer
- The bank or institution that issued the buyer's card or payment account and participates in authorization and dispute decisions.
- 33Legal seller
- The entity contracting with the buyer for the product or service. It appears in sale terms and carries the obligations attached to that sale.
- 34Local payment method
- A payment method strongly associated with a particular market, banking system, or buyer behavior. Currency, confirmation, refund, and recurring support can be limited.
- 35Mandate
- A buyer authorization that permits eligible future debits, commonly used by bank-debit and recurring payment methods.
- 36Merchant
- The business accepting payment for its own sale under a direct payment relationship. The term can also have provider- or network-specific contractual meanings.
- 37Merchant of Record (MoR)
- A provider that becomes the seller or reseller to the buyer for eligible covered transactions and assumes the documented transaction responsibilities.
- 38Negative balance
- A provider balance below zero after refunds, disputes, fees, reserves, or other adjustments exceed available incoming funds.
- 39One Stop Shop (OSS)
- An optional EU VAT mechanism that lets eligible sellers declare and pay VAT for covered cross-border consumer supplies through one Member State registration.
- 40Orchestration
- A layer that can route transactions across processors, acquirers, or methods based on geography, cost, availability, risk, or approval performance.
- 41Payment credential
- Sensitive or tokenized information that allows a payment method to be charged. Transferability depends on method, provider, security process, and destination.
- 42Payment Service Provider (PSP)
- A broad category of providers that help merchants accept and process payments, often combining gateway, method, acquiring, risk, and reporting services.
- 43Payout
- A transfer of available funds from a provider balance to the seller or merchant's bank account. Payout timing follows settlement, availability, and provider scheduling.
- 44PCI DSS
- The Payment Card Industry Data Security Standard. It defines security requirements for entities that store, process, transmit, or can affect cardholder data.
- 45Presentment currency
- The currency in which a price is shown and a payment is charged to the buyer.
- 46Proration
- A charge or credit that allocates a subscription price change across part of a billing period.
- 47Reconciliation
- The process of connecting orders, payments, taxes, fees, refunds, disputes, provider balances, payouts, and bank deposits into an explainable ledger.
- 48Refund
- A seller- or provider-initiated return of funds. The original processing fee may be returned, retained, or supplemented by another fee depending on terms.
- 49Reserve
- Funds held or designated to cover future refunds, disputes, negative balances, or other payment exposure. A reserve may be fixed, rolling, or risk-adjusted.
- 50Reverse charge
- A tax mechanism under which the buyer accounts for tax instead of the seller in eligible transactions. Evidence and invoice requirements still apply.
- 51Reversal
- A transaction that undoes or releases a prior payment movement, such as releasing an authorization or reversing a settled amount.
- 52Rolling reserve
- A reserve that withholds a percentage of transactions and releases each portion after a defined period.
- 53Scheme fee
- A fee associated with card-network services and rules. In transparent pricing it can be shown separately from interchange and provider markup.
- 54Seller coverage
- The countries, legal entities, industries, products, and risk profiles a provider can onboard. It is different from the countries where buyers can pay.
- 55Settlement
- The process by which captured payment funds and transaction obligations move through the payment system into the relevant provider or merchant balance.
- 56Settlement currency
- The currency in which the provider records or settles funds for the merchant balance. It may differ from presentment and payout currency.
- 57Strong Customer Authentication (SCA)
- A European payment-security requirement that can require authentication using independent factors, subject to scope, exemptions, and payment flow.
- 58Tokenization
- Replacing sensitive payment data with a token that can be used in an approved system without exposing the underlying credential to ordinary merchant systems.
- 59Vault
- A controlled system that stores payment credentials or tokens for future use. Portability from one vault to another requires a supported secure process.
- 60Wallet
- A buyer-facing payment account or device service that supplies a stored or tokenized payment method, such as PayPal, Apple Pay, or Google Pay.
- 61Webhook
- A server-to-server event notification from a provider. Webhooks should be authenticated, processed idempotently, and designed for retries and out-of-order delivery.
Scope
Definitions are a map, not a contract.
Provider agreements, card-network rules, tax law, and local regulation can give a term a narrower meaning. Confirm the definition used in the exact agreement and jurisdiction you are evaluating.
Reference foundations include the PCI Security Standards Council, European Banking Authority, European Commission VAT One Stop Shop, provider transaction-lifecycle documentation, and current provider terms.