How Money Moves Glossary · Payments

AAC, ARQC, TC: the chip's application authentication cryptogram (decline offline), authorization request cryptogram (go online) and transaction certificate (approve offline) (Card-Present Payments).
ACH: the US batch network for bank credits and debits (ACH & Bank Transfers).
Acquirer: the merchant's bank, a network member that signs merchants, carries their risk and pays them (How Card Payments Work).
ACSS, Lynx: Canada's batch clearing system for everyday payments, and its high-value real-time gross settlement system (Payments in Canada).
ARN (acquirer reference number): the identifier on each clearing record, cited by disputes and used to trace refunds (Inside a Processor).
ARPC: the issuer's response cryptogram, which the chip checks to confirm the approval really came from its issuer (Card-Present Payments).
Authorization: the issuer's approval of an amount, which places a hold and moves no money (How Card Payments Work).
AVS (address verification): a check of the billing address, returned as a match result in the authorization (Fraud & Risk).
BASE II, IPM: Visa's and Mastercard's clearing file systems and formats (Inside a Processor).
BIN (bank identification number, or IIN): the first six or eight digits of a card number, identifying the issuer and product (How Card Payments Work).
BNPL (buy now, pay later): a lender paying the merchant up front and collecting from the customer in installments (Wallets & Local Payment Methods).
Capture: the merchant confirming the amount it will collect (How Card Payments Work).
Card-absent: Visa's rule-book word for card-not-present, used in this volume only inside Visa quotes (How Card Payments Work).
Cardholder: the person the card was issued to (How Card Payments Work).
Card-present (CP), card-not-present (CNP): whether the card was physically read; it decides pricing, liability and fraud screening (How Card Payments Work).
Card verification code: the three or four digits on the card (CVV2, CVC2, CID), never stored after authorization (How Card Payments Work).
Chain finality: the point after which a blockchain reorganization can no longer undo a transfer, and when a provider credits a stablecoin payment (Stablecoins & Crypto Rails).
Check 21, substitute check: the law that let banks clear checks as images, and the legal paper copy printed from one (Accepting Checks).
Clearing: the acquirer sending captured transactions to the network, which prices them and passes them to issuers (Inside a Processor).
Click to Pay: the networks' checkout for browsers without a wallet, built on EMVCo's Secure Remote Commerce, which delivers a network token (Wallets & Local Payment Methods).
Contactless, Tap to Pay: paying by tapping a card or phone on a reader, and accepting taps on an ordinary phone with no reader (Card-Present Payments).
Correspondent bank, nostro, vostro: a bank holding accounts in a currency's home country for banks that don't; the sender's account there is its nostro (ours, held with you), which the correspondent sees as a vostro (Cross-Border Payments & FX).
Cross-border assessment: a network fee on a transaction whose merchant and issuer are in different countries, such as Mastercard's US Cross Border fee, higher when not settled in US dollars (Cross-Border Payments & FX).
CVM (cardholder verification method): how a terminal confirms the holder is the cardholder (PIN, signature, the phone's own unlock, or nothing), chosen from the card's list (Card-Present Payments).
DCC (dynamic currency conversion): offering a foreign cardholder the price in their own currency at a rate the merchant's provider sets, under network rules on choice and disclosure (Cross-Border Payments & FX).
Downgrade: a transaction priced at a worse interchange category because it was missing data or captured late (Interchange & Pricing).
DPAN, FPAN: a network token bound to a device, and the funding card number behind it (Wallets & Local Payment Methods).
Dual message, single message: authorization now and clearing by file later (credit, signature debit), or one message that does both (PIN debit, ATMs) (Inside a Processor).
ECI (electronic commerce indicator): the code in an authorization saying whether the payment was authenticated (SCA & 3-D Secure).
Effective rate: total fees divided by volume, the single number merchants compare; Canada's code of conduct requires it per card type on statements (Payments Metrics).
EIRF: the electronic interchange reimbursement fee, the rate a transaction falls to when it misses its preferred category (Interchange & Pricing).
E-money token (EMT): MiCA's term for a single-currency stablecoin, issued only by a credit or e-money institution and redeemable at par (Stablecoins & Crypto Rails).
Estimated, incremental, final authorization: an authorization for an amount that may change, an increase to one, and one for exactly the amount to be captured (Payment States & Ledgers).
Exempt debit: debit from issuers small enough that Regulation II's interchange cap doesn't apply (Interchange & Pricing).
Extended authorization: a Visa card-not-present authorization flagged to stay valid for 30 days instead of 10 (How Card Payments Work).
Fallback: a chip card read by magnetic stripe or keyed because the chip failed, priced and risked as the weaker read (Card-Present Payments).
Fedwire, RTP, FedNow: US wire transfers, and the two instant payment networks; all push, all final (ACH & Bank Transfers).
Funding: the acquirer or provider paying the merchant; what a platform calls a payout (Payouts & Settlement).
Funding currency: the currency of the bank account a merchant's payout goes to, a third currency beside presentment and settlement (Cross-Border Payments & FX).
Gateway: the service that takes a payment from a website or app and hands it to a processor (How Card Payments Work).
GENIUS Act: the US federal payment stablecoin law, signed July 18, 2025 and effective January 18, 2027 (Stablecoins & Crypto Rails).
gpi: Swift's service for tracking a cross-border payment across the chain of banks, with the amount visible end to end (Cross-Border Payments & FX).
Hold: the reduction in a cardholder's available credit that an authorization causes, which expires if never captured (How Card Payments Work).
Honor all cards: the network rule that a merchant accepting a brand accepts all its cards; the pending US merchant settlement would loosen it for credit categories (Interchange & Pricing).
ICA: Mastercard's identifier for a member, the counterpart of Visa's acquiring identifier (Inside a Processor).
Image cash letter (X9.100-187): the file format in which banks exchange check images and their data (Accepting Checks).
Interac: Canada's domestic debit network (Payments in Canada).
Interchange: the fee the acquirer pays the issuer on every card transaction, set by the networks' tables (Interchange & Pricing).
Interchange-plus: pricing that passes interchange and network fees through at cost and adds a fixed markup (Interchange & Pricing).
ISA, IAF: Visa's International Service Assessment, charged when the merchant's and issuer's countries differ, and its International Acquirer Fee on non-US cards acquired by US merchants (Cross-Border Payments & FX).
ISO 20022: the XML message standard replacing older bank formats: pain.001 instructs a credit transfer, pain.002 reports its status, camt.053 is a statement (Treasury & Bank Operations).
ISO 8583: the message standard most card authorizations travel in (How Card Payments Work).
ISO (independent sales organization), ISO/MSP: a company that sells an acquirer's merchant accounts, registered with the networks through the acquirer; ISO/MSP (membership service provider) is the industry's paired label. Not the standards body behind ISO 8583 (How Card Payments Work, Partners, ISOs & Residuals).
Issuer: the cardholder's bank, which approves or declines and pays for purchases (How Card Payments Work).
Kernel: the EMV software in a terminal that runs the card's transaction logic, certified as EMV Level 2 (Card-Present Payments).
Level 2 and Level 3 data: tax and customer code (Level 2) and line-item detail (Level 3) that lower interchange on commercial cards; Visa retired most Level 2 rates in April 2026, keeping them for fleet fuel (Interchange & Pricing).
Local acquiring: processing through an acquirer and merchant outlet in the card's own country, so the payment is priced and judged as domestic (Cross-Border Payments & FX).
Lockbox: a bank service that receives a business's mailed checks, deposits them and sends the remittance data (Accepting Checks).
MCC (merchant category code): four digits describing what a merchant sells, which decides interchange and program eligibility (How Card Payments Work).
MCP (multi-currency pricing): the merchant pricing and charging in the customer's currency, with conversion between acquirer and merchant at settlement (Cross-Border Payments & FX).
MED: Pix's special return mechanism, through which a payer's bank can recover funds in fraud cases (Wallets & Local Payment Methods).
Merchant discount: what a merchant pays its acquirer for acceptance; merchants don't pay interchange directly (Interchange & Pricing).
Merchant outlet location: the country an acquirer assigns a merchant (where a card-present sale happens, the principal place of business for card-not-present), which decides whether a payment is cross-border (Cross-Border Payments & FX).
MICR line: the magnetic-ink routing and account numbers along the bottom of a check (Accepting Checks).
MID, TID: the merchant and terminal identifiers in every authorization (How Card Payments Work).
MPoC: PCI's Mobile Payments on COTS standard for accepting cards (and PINs) on commercial off-the-shelf phones (Card-Present Payments).
MTI (message type indicator): the four digits that say what an ISO 8583 message is (How Card Payments Work).
Network: Visa, Mastercard and the others; routes, clears and settles between issuers and acquirers and writes the rules. Four-party networks sit between banks they don't own; three-party networks (Amex, Discover) largely issue and acquire themselves, and Discover has belonged to Capital One since May 2025 (How Card Payments Work).
Offline approval, store and forward: a terminal approving without reaching the issuer and sending the transaction once it reconnects, at the merchant's risk (Card-Present Payments). Not the same as stand-in, where the network answers for an issuer it can't reach.
Open banking: regulated access for third parties to bank accounts, for data or to initiate payments (Payments in the EU & UK).
OptBlue: American Express's program for smaller merchants, under which their ordinary acquirer signs and prices them for Amex (Interchange & Pricing).
OUR, SHA, BEN: the charge-bearer codes on a wire: the sender pays every fee, each side pays its own bank, or the beneficiary bears them all (Cross-Border Payments & FX).
PAN (primary account number): the card number (How Card Payments Work).
Partial approval: an authorization for less than requested (How Card Payments Work).
Payer, payor: the party whose money pays: the cardholder or account holder on a payment, or the business paying its vendors on a payout; Payments Canada's Rule H1 calls the payer the payor (Payments in Canada, Vendor Payouts).
Payment provider: this volume's term for any company that bundles gateway, processing and often acquiring behind one API, such as Stripe, Adyen, Checkout.com or Worldpay (How Card Payments Work).
Payment stablecoin: a token its issuer must redeem at a fixed value, backed one to one by reserves; under the GENIUS Act only a permitted issuer may issue one (Stablecoins & Crypto Rails).
Presentment: delivering a transaction for payment: a card's clearing record to the issuer, or a check to the paying bank (Inside a Processor, Accepting Checks).
Processor: the company that runs the systems for an acquirer (front-end authorizations, back-end clearing and settlement) or an issuer (Inside a Processor).
PSP (payment service provider): a company that puts a gateway, processing and usually acquiring or payment facilitation behind one API; what this volume calls a payment provider (The Payments Landscape).
PTS (PIN Transaction Security): PCI's approval program for PIN entry devices, which a terminal needs to take PINs (Card-Present Payments).
Ramp (on-ramp, off-ramp): a service that turns bank money into stablecoins (on) or stablecoins into bank money (off) (Stablecoins & Crypto Rails).
RDC (remote deposit capture): depositing checks by scanning them (Accepting Checks).
Regulated debit: US debit from issuers with $10 billion or more in assets, whose interchange is capped by Regulation II (the Durbin Amendment) (Interchange & Pricing).
Remotely created check (demand draft): a check created by the payee from the payer's account number, with no signature (Accepting Checks).
Self-custody (unhosted) wallet: a wallet whose owner holds the private key, with no institution in between (Stablecoins & Crypto Rails).
SEPA, Bacs, Faster Payments, Pix, UPI: the euro area's, the UK's (batch and instant), Brazil's and India's bank payment schemes (Wallets & Local Payment Methods).
Settlement: the network netting issuers' and acquirers' positions and moving money between them (Inside a Processor).
Soft and hard decline: a decline that may succeed later or with authentication, and one that never will for that card (Stored Cards & Recurring Billing).
STAN, RRN: the trace numbers that identify an ISO 8583 message for reversals and lookups (How Card Payments Work).
Statement descriptor: what the cardholder sees on their statement (How Card Payments Work).
Void: cancelling an authorization before capture, which releases the hold; an authorization reversal (Designing the Payments API).
VRP (variable recurring payments): UK open-banking mandates letting a provider pull from a customer's account within agreed limits (Wallets & Local Payment Methods).
Wero, iDEAL: the European Payments Initiative's account-to-account wallet, and the Dutch bank payment method migrating onto it (Wallets & Local Payment Methods).

AAC, ARQC, TC: the chip's application authentication cryptogram (decline offline), authorization request cryptogram (go online) and transaction certificate (approve offline) (Card-Present Payments).
ACH: the US batch network for bank credits and debits (ACH & Bank Transfers).
Acquirer: the merchant's bank, a network member that signs merchants, carries their risk and pays them (How Card Payments Work).
ACSS, Lynx: Canada's batch clearing system for everyday payments, and its high-value real-time gross settlement system (Payments in Canada).
ARN (acquirer reference number): the identifier on each clearing record, cited by disputes and used to trace refunds (Inside a Processor).
ARPC: the issuer's response cryptogram, which the chip checks to confirm the approval really came from its issuer (Card-Present Payments).
Authorization: the issuer's approval of an amount, which places a hold and moves no money (How Card Payments Work).
AVS (address verification): a check of the billing address, returned as a match result in the authorization (Fraud & Risk).
BASE II, IPM: Visa's and Mastercard's clearing file systems and formats (Inside a Processor).
BIN (bank identification number, or IIN): the first six or eight digits of a card number, identifying the issuer and product (How Card Payments Work).
BNPL (buy now, pay later): a lender paying the merchant up front and collecting from the customer in installments (Wallets & Local Payment Methods).
Capture: the merchant confirming the amount it will collect (How Card Payments Work).
Card-absent: Visa's rule-book word for card-not-present, used in this volume only inside Visa quotes (How Card Payments Work).
Cardholder: the person the card was issued to (How Card Payments Work).
Card-present (CP), card-not-present (CNP): whether the card was physically read; it decides pricing, liability and fraud screening (How Card Payments Work).
Card verification code: the three or four digits on the card (CVV2, CVC2, CID), never stored after authorization (How Card Payments Work).
Chain finality: the point after which a blockchain reorganization can no longer undo a transfer, and when a provider credits a stablecoin payment (Stablecoins & Crypto Rails).
Check 21, substitute check: the law that let banks clear checks as images, and the legal paper copy printed from one (Accepting Checks).
Clearing: the acquirer sending captured transactions to the network, which prices them and passes them to issuers (Inside a Processor).
Click to Pay: the networks' checkout for browsers without a wallet, built on EMVCo's Secure Remote Commerce, which delivers a network token (Wallets & Local Payment Methods).
Contactless, Tap to Pay: paying by tapping a card or phone on a reader, and accepting taps on an ordinary phone with no reader (Card-Present Payments).
Correspondent bank, nostro, vostro: a bank holding accounts in a currency's home country for banks that don't; the sender's account there is its nostro (ours, held with you), which the correspondent sees as a vostro (Cross-Border Payments & FX).
Cross-border assessment: a network fee on a transaction whose merchant and issuer are in different countries, such as Mastercard's US Cross Border fee, higher when not settled in US dollars (Cross-Border Payments & FX).
CVM (cardholder verification method): how a terminal confirms the holder is the cardholder (PIN, signature, the phone's own unlock, or nothing), chosen from the card's list (Card-Present Payments).
DCC (dynamic currency conversion): offering a foreign cardholder the price in their own currency at a rate the merchant's provider sets, under network rules on choice and disclosure (Cross-Border Payments & FX).
Downgrade: a transaction priced at a worse interchange category because it was missing data or captured late (Interchange & Pricing).
DPAN, FPAN: a network token bound to a device, and the funding card number behind it (Wallets & Local Payment Methods).
Dual message, single message: authorization now and clearing by file later (credit, signature debit), or one message that does both (PIN debit, ATMs) (Inside a Processor).
ECI (electronic commerce indicator): the code in an authorization saying whether the payment was authenticated (SCA & 3-D Secure).
Effective rate: total fees divided by volume, the single number merchants compare; Canada's code of conduct requires it per card type on statements (Payments Metrics).
EIRF: the electronic interchange reimbursement fee, the rate a transaction falls to when it misses its preferred category (Interchange & Pricing).
E-money token (EMT): MiCA's term for a single-currency stablecoin, issued only by a credit or e-money institution and redeemable at par (Stablecoins & Crypto Rails).
Estimated, incremental, final authorization: an authorization for an amount that may change, an increase to one, and one for exactly the amount to be captured (Payment States & Ledgers).
Exempt debit: debit from issuers small enough that Regulation II's interchange cap doesn't apply (Interchange & Pricing).
Extended authorization: a Visa card-not-present authorization flagged to stay valid for 30 days instead of 10 (How Card Payments Work).
Fallback: a chip card read by magnetic stripe or keyed because the chip failed, priced and risked as the weaker read (Card-Present Payments).
Fedwire, RTP, FedNow: US wire transfers, and the two instant payment networks; all push, all final (ACH & Bank Transfers).
Funding: the acquirer or provider paying the merchant; what a platform calls a payout (Payouts & Settlement).
Funding currency: the currency of the bank account a merchant's payout goes to, a third currency beside presentment and settlement (Cross-Border Payments & FX).
Gateway: the service that takes a payment from a website or app and hands it to a processor (How Card Payments Work).
GENIUS Act: the US federal payment stablecoin law, signed July 18, 2025 and effective January 18, 2027 (Stablecoins & Crypto Rails).
gpi: Swift's service for tracking a cross-border payment across the chain of banks, with the amount visible end to end (Cross-Border Payments & FX).
Hold: the reduction in a cardholder's available credit that an authorization causes, which expires if never captured (How Card Payments Work).
Honor all cards: the network rule that a merchant accepting a brand accepts all its cards; the pending US merchant settlement would loosen it for credit categories (Interchange & Pricing).
ICA: Mastercard's identifier for a member, the counterpart of Visa's acquiring identifier (Inside a Processor).
Image cash letter (X9.100-187): the file format in which banks exchange check images and their data (Accepting Checks).
Interac: Canada's domestic debit network (Payments in Canada).
Interchange: the fee the acquirer pays the issuer on every card transaction, set by the networks' tables (Interchange & Pricing).
Interchange-plus: pricing that passes interchange and network fees through at cost and adds a fixed markup (Interchange & Pricing).
ISA, IAF: Visa's International Service Assessment, charged when the merchant's and issuer's countries differ, and its International Acquirer Fee on non-US cards acquired by US merchants (Cross-Border Payments & FX).
ISO 20022: the XML message standard replacing older bank formats: pain.001 instructs a credit transfer, pain.002 reports its status, camt.053 is a statement (Treasury & Bank Operations).
ISO 8583: the message standard most card authorizations travel in (How Card Payments Work).
ISO (independent sales organization), ISO/MSP: a company that sells an acquirer's merchant accounts, registered with the networks through the acquirer; ISO/MSP (membership service provider) is the industry's paired label. Not the standards body behind ISO 8583 (How Card Payments Work, Partners, ISOs & Residuals).
Issuer: the cardholder's bank, which approves or declines and pays for purchases (How Card Payments Work).
Kernel: the EMV software in a terminal that runs the card's transaction logic, certified as EMV Level 2 (Card-Present Payments).
Level 2 and Level 3 data: tax and customer code (Level 2) and line-item detail (Level 3) that lower interchange on commercial cards; Visa retired most Level 2 rates in April 2026, keeping them for fleet fuel (Interchange & Pricing).
Local acquiring: processing through an acquirer and merchant outlet in the card's own country, so the payment is priced and judged as domestic (Cross-Border Payments & FX).
Lockbox: a bank service that receives a business's mailed checks, deposits them and sends the remittance data (Accepting Checks).
MCC (merchant category code): four digits describing what a merchant sells, which decides interchange and program eligibility (How Card Payments Work).
MCP (multi-currency pricing): the merchant pricing and charging in the customer's currency, with conversion between acquirer and merchant at settlement (Cross-Border Payments & FX).
MED: Pix's special return mechanism, through which a payer's bank can recover funds in fraud cases (Wallets & Local Payment Methods).
Merchant discount: what a merchant pays its acquirer for acceptance; merchants don't pay interchange directly (Interchange & Pricing).
Merchant outlet location: the country an acquirer assigns a merchant (where a card-present sale happens, the principal place of business for card-not-present), which decides whether a payment is cross-border (Cross-Border Payments & FX).
MICR line: the magnetic-ink routing and account numbers along the bottom of a check (Accepting Checks).
MID, TID: the merchant and terminal identifiers in every authorization (How Card Payments Work).
MPoC: PCI's Mobile Payments on COTS standard for accepting cards (and PINs) on commercial off-the-shelf phones (Card-Present Payments).
MTI (message type indicator): the four digits that say what an ISO 8583 message is (How Card Payments Work).
Network: Visa, Mastercard and the others; routes, clears and settles between issuers and acquirers and writes the rules. Four-party networks sit between banks they don't own; three-party networks (Amex, Discover) largely issue and acquire themselves, and Discover has belonged to Capital One since May 2025 (How Card Payments Work).
Offline approval, store and forward: a terminal approving without reaching the issuer and sending the transaction once it reconnects, at the merchant's risk (Card-Present Payments). Not the same as stand-in, where the network answers for an issuer it can't reach.
Open banking: regulated access for third parties to bank accounts, for data or to initiate payments (Payments in the EU & UK).
OptBlue: American Express's program for smaller merchants, under which their ordinary acquirer signs and prices them for Amex (Interchange & Pricing).
OUR, SHA, BEN: the charge-bearer codes on a wire: the sender pays every fee, each side pays its own bank, or the beneficiary bears them all (Cross-Border Payments & FX).
PAN (primary account number): the card number (How Card Payments Work).
Partial approval: an authorization for less than requested (How Card Payments Work).
Payer, payor: the party whose money pays: the cardholder or account holder on a payment, or the business paying its vendors on a payout; Payments Canada's Rule H1 calls the payer the payor (Payments in Canada, Vendor Payouts).
Payment provider: this volume's term for any company that bundles gateway, processing and often acquiring behind one API, such as Stripe, Adyen, Checkout.com or Worldpay (How Card Payments Work).
Payment stablecoin: a token its issuer must redeem at a fixed value, backed one to one by reserves; under the GENIUS Act only a permitted issuer may issue one (Stablecoins & Crypto Rails).
Presentment: delivering a transaction for payment: a card's clearing record to the issuer, or a check to the paying bank (Inside a Processor, Accepting Checks).
Processor: the company that runs the systems for an acquirer (front-end authorizations, back-end clearing and settlement) or an issuer (Inside a Processor).
PSP (payment service provider): a company that puts a gateway, processing and usually acquiring or payment facilitation behind one API; what this volume calls a payment provider (The Payments Landscape).
PTS (PIN Transaction Security): PCI's approval program for PIN entry devices, which a terminal needs to take PINs (Card-Present Payments).
Ramp (on-ramp, off-ramp): a service that turns bank money into stablecoins (on) or stablecoins into bank money (off) (Stablecoins & Crypto Rails).
RDC (remote deposit capture): depositing checks by scanning them (Accepting Checks).
Regulated debit: US debit from issuers with $10 billion or more in assets, whose interchange is capped by Regulation II (the Durbin Amendment) (Interchange & Pricing).
Remotely created check (demand draft): a check created by the payee from the payer's account number, with no signature (Accepting Checks).
Self-custody (unhosted) wallet: a wallet whose owner holds the private key, with no institution in between (Stablecoins & Crypto Rails).
SEPA, Bacs, Faster Payments, Pix, UPI: the euro area's, the UK's (batch and instant), Brazil's and India's bank payment schemes (Wallets & Local Payment Methods).
Settlement: the network netting issuers' and acquirers' positions and moving money between them (Inside a Processor).
Soft and hard decline: a decline that may succeed later or with authentication, and one that never will for that card (Stored Cards & Recurring Billing).
STAN, RRN: the trace numbers that identify an ISO 8583 message for reversals and lookups (How Card Payments Work).
Statement descriptor: what the cardholder sees on their statement (How Card Payments Work).
Void: cancelling an authorization before capture, which releases the hold; an authorization reversal (Designing the Payments API).
VRP (variable recurring payments): UK open-banking mandates letting a provider pull from a customer's account within agreed limits (Wallets & Local Payment Methods).
Wero, iDEAL: the European Payments Initiative's account-to-account wallet, and the Dutch bank payment method migrating onto it (Wallets & Local Payment Methods).