Payments glossary
Plain-English definitions of the terms used across our guides.
- Acquirer
- The bank or financial institution that processes card payments for a merchant and settles funds to them.
- Approval rate
- The share of attempted payments that are approved. Tracked by issuer, card type and market to find where declines occur.
- AML
- Anti-money-laundering: rules and monitoring that detect and report suspicious financial activity.
- Chargeback
- A card dispute in which the cardholder asks the issuer to reverse a payment.
- Cascading retries
- Resubmitting a declined payment through another route or after a delay, within set limits.
- Gateway
- The service that passes payment data from a checkout to the processor or acquirer and returns the result.
- Interchange-plus
- A pricing model that shows the card network's interchange cost plus a fixed processor markup, so each cost is visible.
- KYC / KYB
- Know Your Customer and Know Your Business: identity and ownership checks performed before a customer or business transacts.
- Orchestration
- Coordinating several payment providers through one layer, including routing, retries and reporting.
- Payout
- A transfer of funds from a business's payment balance to its bank account or another recipient.
- PCI DSS
- Payment Card Industry Data Security Standard: requirements for handling, storing and transmitting card data.
- Settlement
- The process of moving funds from the payment network to the merchant's account, usually on a set schedule.
- Soft decline
- A decline that may succeed if retried later, for example due to a temporary issuer issue.
- Hard decline
- A decline that should not be retried, for example a card reported lost or stolen.
- Tokenization
- Replacing card or account numbers with a token, so the original data is not stored by the merchant.
- 3-D Secure
- A cardholder authentication protocol that can shift fraud liability and adds a verification step at checkout.