Fintech & Payments terms

26 Fintech & Payments terms explained in plain English.

3-D Secure3-D Secure is the security step that sometimes pops up during an online card payment, asking you to approve the purchase in your banking app or enter a one-time code.
Account-to-account (A2A) paymentsAccount-to-account (A2A) payments move money straight from one bank account to another without going through a card network, using systems like Interac e-Transfer, UPI, Pix, or open banking 'pay by bank.' While A2A is often promoted as the cheaper, faster replacement for cards, it typically lacks the chargebacks and fraud guarantees that make cards trusted.
Acquirer (acquiring bank)An acquirer, or acquiring bank, is the financial institution that signs up merchants to accept card payments and takes on the risk of doing so.
Banking-as-a-Service (BaaS)Banking-as-a-Service (BaaS) is a model in which licensed banks rent out their charters and infrastructure, through APIs, so other companies can offer accounts, debit cards, and payments under their own brand.
Buy now, pay later (BNPL)Buy now, pay later (BNPL) lets shoppers split a purchase into instalments, often four interest-free payments over six weeks, with near-instant approval at checkout.
Consumer-driven banking (Canada)Consumer-driven banking is Canada's name for open banking: a federal framework that will let Canadians direct their bank to share their financial data with accredited third parties, and later let those parties make payments or switch accounts on their behalf.
Contactless payments (NFC)Contactless payment means tapping a card, phone, or watch on a payment terminal instead of inserting or swiping it, using a short-range radio technology called NFC.
Embedded financeEmbedded finance means financial services (payments, loans, accounts, cards, or insurance) built directly into a non-financial product, such as a ride-hailing app paying drivers instantly or an e-commerce platform offering merchant loans.
EMV chipThe EMV chip is the small metal contact on a payment card that generates a unique cryptographic code for every in-person transaction, so copied card data is useless for future purchases.
FedNowFedNow is the US Federal Reserve's instant payment service, which lets participating banks and credit unions send and receive money in seconds, 24 hours a day, every day of the year.
Interac e-TransferInterac e-Transfer is Canada's go-to way to send money between bank accounts using only the recipient's email address or mobile number.
ISO 20022ISO 20022 is the international standard that defines how payment and financial messages are structured, so banks and payment systems everywhere can read each other's data.
Know your business (KYB)Know your business (KYB) is the process of verifying a company before a bank or payment provider works with it: confirming the business is real, identifying who ultimately owns and controls it, and checking for sanctions and money-laundering risk.
Merchant of recordThe merchant of record (MoR) is the business legally responsible for a sale: it appears on the customer's card statement, collects the payment, charges the right sales tax, and handles refunds and chargebacks.
Mobile wallet (Apple Pay, Google Wallet)A mobile wallet, such as Apple Pay, Google Wallet, or Samsung Wallet, stores digital versions of your payment cards on your phone or watch so you can tap to pay in stores or check out online.
Open bankingOpen banking is a framework that lets you tell your bank to share your account data with a third-party app, or let that app start a payment, through a secure, permissioned connection.
Payment facilitator (PayFac)A payment facilitator (PayFac) is a company that lets businesses start accepting card payments almost instantly by onboarding them as 'sub-merchants' under the PayFac's own master merchant account.
Payment gateway vs payment processorA payment gateway is the front door that securely captures a customer's card details at checkout and sends them on, while a payment processor does the behind-the-scenes work of routing the transaction through card networks and banks.
Payment orchestrationPayment orchestration is a software layer that connects a business to several payment providers at once and decides, for each transaction, which provider, route, or method to use.
PixPix is Brazil's instant payment system, created and run by the Banco Central do Brasil, that lets people and businesses send money in seconds, any time, using a phone number, email, tax ID, or QR code.
Real-time gross settlement (RTGS)A real-time gross settlement (RTGS) system is the high-value backbone of a country's financial system: it settles payments between banks one at a time, immediately and with finality, usually in central bank money.
Real-Time Rail (RTR)The Real-Time Rail (RTR) is Canada's new national instant payment system, run by Payments Canada, designed to move money between accounts in seconds, any time of day, with detailed ISO 20022 data attached.
SEPA Instant Credit TransferSEPA Instant Credit Transfer (SCT Inst) is the European scheme that moves euros between bank accounts across the Single Euro Payments Area in about ten seconds, at any hour.
Strong Customer Authentication (SCA)Strong Customer Authentication (SCA) is a European and UK legal requirement that most online payments and banking logins be verified with at least two independent factors: something you know, something you have, or something you are.
UPI (Unified Payments Interface)UPI (Unified Payments Interface) is India's real-time payment system, which lets anyone pay another person or a shop straight from their bank account using a phone, a QR code, or a simple UPI ID.
Virtual cardA virtual card is a card number that exists only digitally, often created for a single purchase, a single merchant, or a set spending limit.