Money, Payments & Crypto terms

51 Money, Payments & Crypto 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.
ACH TransferACH (Automated Clearing House) is the US electronic network for bank-to-bank money transfers, operated by NACHA (National Automated Clearing House Association).
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.
BlockchainA blockchain is a way of recording information digitally so that it is extremely difficult to change, hack, or cheat.
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.
Card NetworkA card network (also called a payment network or card scheme) is the system that facilitates card payment transactions between merchants (via their acquiring bank) and cardholders (via their issuing bank).
CBDCA Central Bank Digital Currency (CBDC) is a digital form of a country's fiat currency issued and backed by the country's central bank.
Chargeback RatioA chargeback ratio (or chargeback rate) measures the number of chargebacks (disputed card transactions) a merchant receives relative to their total transaction volume, expressed as a percentage.
Cold WalletA cold wallet (also called cold storage) stores cryptocurrency private keys on a device that is kept offline, disconnected from the internet.
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.
Crypto CustodyCrypto custody refers to the management and secure storage of cryptographic private keys that control access to digital assets.
Crypto ExchangeA cryptocurrency exchange is a platform that enables users to buy, sell, and trade cryptocurrencies.
CryptocurrencyCryptocurrency is digital money that exists only on computers and uses special security technology called cryptography to verify transactions.
DeFiDeFi (Decentralized Finance) refers to financial applications built on blockchain networks (primarily Ethereum and its Layer 2s) using smart contracts.
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.
Gas FeesGas fees are the transaction costs paid by users to execute transactions and smart contract operations on blockchains that use a gas model (primarily Ethereum and EVM-compatible chains). 'Gas' measures the computational work required for a transaction: a simple ETH transfer uses 21,000 gas units; complex smart contract interactions (DeFi swaps, NFT minting) use more.
Hot WalletA hot wallet is a cryptocurrency wallet that is connected to the internet and actively used for sending, receiving, and trading cryptocurrency. 'Hot' refers to the continuous internet connection, which makes the wallet accessible and convenient, but also exposes it to online attack vectors (hacking, phishing, malware).
IBANAn IBAN (International Bank Account Number) is a standardized format for identifying bank accounts used in international payments.
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.
Interchange FeeAn interchange fee is the fee paid by the merchant's bank (acquirer) to the cardholder's bank (issuer) for each card transaction.
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.
KYC/AMLKYC (Know Your Customer) and AML (Anti-Money Laundering) are two related regulatory compliance frameworks required of financial services businesses.
Layer 2 (Blockchain)A Layer 2 (L2) is a secondary network built on top of a base blockchain (Layer 1) (most commonly Ethereum) that processes transactions at higher speed and lower cost, while inheriting the security of the base layer by periodically submitting transaction data or proofs back to Layer 1.
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.
NFTAn NFT, or non-fungible token, is a unique digital certificate of ownership stored on a blockchain.
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.
Point-of-Sale SystemA Point-of-Sale (POS) system is the combination of hardware (terminal, card reader, receipt printer, barcode scanner) and software used to complete customer transactions in retail stores, restaurants, and service businesses.
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 PaymentsReal-time payments (RTP) are bank-to-bank payment transfers that settle instantly (within seconds), are available 24/7/365, and are irrevocable once sent.
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.
Seed PhraseA seed phrase (also called a recovery phrase, mnemonic phrase, or backup phrase) is a sequence of 12 or 24 randomly selected English words that serves as the master backup for a cryptocurrency wallet.
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.
Smart ContractA smart contract is a small program stored on a blockchain that automatically executes an agreement when specific conditions are met.
Smart-Contract AuditA smart-contract audit is a formal security assessment of the code that runs a blockchain application (DeFi protocol, NFT contract, token contract, DAO governance contract).
StablecoinA stablecoin is a type of cryptocurrency designed to maintain a stable value by pegging it to a reference asset, most commonly the US dollar (1 stablecoin = 1 USD).
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.
SWIFTSWIFT (Society for Worldwide Interbank Financial Telecommunication) is the international messaging network that banks use to communicate securely with each other when processing cross-border wire transfers.
Tokenized CardCard tokenization replaces a cardholder's real Primary Account Number (PAN) with a unique, single-use or limited-use token (a surrogate number) for payment transactions.
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.