The Most Important Keywords in the Payment Industry
A comprehensive guide to understanding the essential terminology that shapes the dynamic world of payments. Dive into the key concepts and definitions that form the foundation of modern payment systems and stay informed in this rapidly evolving industry:
- Virtual Terminal: A virtual terminal is an online interface that allows businesses to manually process credit card transactions using a computer or mobile device. It is commonly used for card-not-present transactions, such as mail or phone orders.
- Payment Aggregator: A payment aggregator, also known as a payment facilitator or a payfac, is a company that enables merchants to accept payments without the need for their own merchant accounts. It aggregates multiple merchants under a single account, simplifying the onboarding and payment process.
- 3D Secure: 3D Secure is an additional layer of security for online card transactions. It adds an authentication step, typically involving a one-time password or biometric verification, to reduce the risk of fraud.
- In-App Payments: In-app payments refer to the ability to make purchases or payments within a mobile application. It allows users to conveniently and securely pay for digital goods, services, or subscriptions without leaving the app.
- Payment Link: A payment link is a URL or hyperlink that merchants can send to customers to facilitate online payments. Customers can click the link to access a payment page and complete the transaction.
- Payment Gateway API: A Payment Gateway API (Application Programming Interface) is a set of rules and protocols that allows software applications to integrate with a payment gateway. It enables seamless communication between the application and the payment gateway for processing transactions.
- Card Verification Code (CVC/CVV): The Card Verification Code, also known as Card Verification Value (CVV) or Card Security Code (CSC), is a three- or four-digit security code printed on payment cards. It provides an additional layer of authentication for card-not-present transactions.
- Settlement: Settlement refers to the process of transferring funds from the customer’s bank account to the merchant’s bank account for completed payment transactions. It involves the finalization and reconciliation of funds between the acquiring bank and the issuing bank.
- Payment Reconciliation: Payment reconciliation is the process of matching and balancing financial records to ensure that all payment transactions are accurately accounted for. It involves comparing data from various sources, such as bank statements, payment gateway reports, and internal records.
- Card Association: Card associations, such as Visa, Mastercard, American Express, and Discover, are networks that facilitate the issuance and acceptance of payment cards. They set rules and standards for card usage, processing, and interchange fees.