SendPay Business

Payments glossary

The words you meet when you take payments or plan your own payment platform, explained in plain English.

Payments glossary
Acquirer
The bank or payment provider that accepts card payments on a business's behalf and pays the money into the business's account. Also called the acquiring bank.
AML (anti-money laundering)
The rules and checks that stop criminals moving money through financial services, such as checking who customers are and watching for unusual payments.
Authorisation
The card issuer's yes or no at the moment of a card payment. An approved payment reserves the money, but it has not moved yet.
Banking as a service (BaaS)
When licensed providers let other companies offer accounts, cards and payments to their own customers through the provider's systems.
BIC / SWIFT code
A short code that identifies a bank in an international transfer, used together with the account number or IBAN.
Card scheme
The card network, such as Visa or Mastercard, that sets the rules and carries card payments between the customer's bank and the business's bank. Also called a card network.
Chargeback
When a cardholder disputes a payment with their card issuer and the money is taken back from the business while the dispute is decided.
E-money
Digital money held in an account or wallet and issued by a firm authorised to do so. It is not a bank deposit.
Exchange rate markup
The gap between the real mid-market exchange rate and the rate a provider gives you. The provider keeps the difference, on top of any fee it shows. Money transfer cost calculator
Faster Payments
The UK system for bank transfers that usually arrive within seconds, any time of day.
IBAN
International Bank Account Number: a standard format that identifies a bank account across borders.
Interchange fee
A fee paid to the customer's card issuer on each card payment. It is set by the card scheme and is part of what a business pays to take cards. Card fee calculator
Issuer
The bank or provider that gives a customer their card and approves or declines each payment made with it.
KYB (know your business)
Checking that a business is real and who owns and runs it, before giving it an account.
KYC (know your customer)
Checking a person's identity, for example with an ID document and a selfie, before giving them an account.
Merchant
In payments, any business that takes payments from customers.
Merchant service charge
The total a business pays its provider for accepting a card payment. It usually includes interchange, scheme fees and the provider's own margin.
Mid-market rate
The midpoint between the buying and selling prices of two currencies: the fairest measure of the real exchange rate at that moment.
Mobile money
An account tied to a mobile phone, often run by a mobile network, used to store, send and pay money. M-Pesa in Kenya is a well-known example.
Open banking
Lets customers securely share their bank data, or start a payment straight from their bank account, through regulated third-party apps.
Pay by bank
Paying straight from a bank account, often through open banking, instead of with a card.
Payment gateway
The software that securely passes a customer's payment details from a checkout to the payment processor.
Payment processor
The company that handles the technical side of a card payment, moving the details and the approval between the business, the card scheme and the banks.
Payout
Money sent from a payment provider or platform into a business's or user's bank account.
PCI DSS
The card industry's security standard for any business that stores, processes or sends card details.
Refund
When a business chooses to return a payment to the customer. Unlike a chargeback, the business starts it.
Remittance
Money sent by someone living or working abroad to family or friends in their home country.
Rolling reserve
A share of a business's takings that a provider holds back for a set time, to cover possible chargebacks and refunds.
Safeguarding
UK rules that require payment and e-money firms to keep customers' money separate from their own funds.
Scheme fee
A fee the card networks charge for using their network, on top of interchange.
SEPA
The Single Euro Payments Area: lets euro bank transfers work across the participating European countries much like payments at home.
Settlement
The step when the money from a payment actually moves and lands in the business's account, often a day or more after authorisation.
Sort code
A six-digit number that identifies a bank and branch in the UK, used with the account number.
Strong customer authentication (SCA)
UK and EU rules that require many online payments to be confirmed with two of three things: something you know, something you have or something you are.
Three-D Secure (3DS)
An extra check on an online card payment, such as approving it in a banking app, that confirms the real cardholder is paying.
Tokenisation
Replacing a card number with a stand-in code, so the real number is not stored or sent where it doesn't need to be.
White label
A product built by one company and sold under another company's brand, name and colours. Start your own payments app

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