Payments glossary

A type of card transaction used to transfer funds into another account, such as topping up a digital wallet or loading a prepaid card.

A service that automatically updates and maintains accurate credit and debit card information for your customers (e.g., for cards that have expired, been reissued due to loss, or replaced after being stolen). This helps prevent interruptions in recurring or card-on-file payments, reducing declines and improving the customer experience.

A zero-amount or small-amount authorization used to confirm that a card is valid before processing an actual payment.

An acquirer, often referred to as an acquiring bank, is a financial institution that processes credit or debit card transactions on behalf of a merchant. It is responsible for facilitating the transfer of funds from the customer’s account to the merchant’s account, ensuring a smooth and secure payment process. The acquirer plays a critical role in enabling businesses to accept various forms of electronic payments, thereby facilitating the seamless operation of the overall payment ecosystem.

An Acquirer Reference Number (ARN) is a unique code that is assigned to a transaction by the acquiring bank or the payment processor for the purpose of identification and tracking. It serves as a crucial reference point in the payment process, aiding in the reconciliation of transactions and providing a means for tracing the journey of a specific payment. The ARN is essential in resolving any issues or disputes that may arise during the processing of electronic payments, ensuring transparency and accountability in the payment system.

An event where cardholder data is accessed or stolen by unauthorized parties, triggering monitoring and compliance requirements from card schemes.

The process of confirming a user’s actual age (typically by identity document, database check or biometric means) before granting access to age-restricted services or content. Robust age verification helps merchants in regulated sectors and digital platforms protect minors, meet compliance demands and avoid payment disruption.

A recurring billing framework powered by AI-driven services (e.g., customised chat, ongoing content delivery, interactive sessions) where users pay periodically for access. This model requires clear descriptor strategy, effective billing consent management and recurring-transaction risk controls to maintain healthy approval rates and minimise refunds or disputes.

Regulations preventing disguising criminal money sources. Guidelines ensure customer identification, monitor transactions, report suspicious activities, and maintain financial system integrity.

A set of standardized HTTP endpoints and data schemas that let merchants integrate programmatically with the payment platform. Through the API you can submit authorisation requests, capture payments, issue refunds, retrieve transaction reports and manage webhooks. For full details and request/response examples, see the TrustPay API documentation.

The final stage of the dispute process where a card scheme makes a binding decision after the issuer and acquirer fail to resolve a chargeback.

In the context of payments, authorization refers to the process where a card issuer or a financial institution approves a transaction after verifying that the cardholder has sufficient funds or credit to complete the purchase. This step is crucial for ensuring that the customer has the necessary resources to fulfill the transaction, and it typically involves a real-time verification process to validate the legitimacy of the payment request. Upon successful authorization, the funds are reserved for the specific transaction, marking the initial step towards the completion of the payment process.

A Bank Identification Number (BIN) refers to the first six digits of a payment card number, including credit, debit, or gift cards. It helps to identify the issuing institution of the card and is used in various financial transactions to determine the card type, the card brand, and the country of origin. BINs play a crucial role in fraud prevention, as they assist in verifying the legitimacy of transactions and enable merchants and financial institutions to assess potential risks associated with card-based payments.

Blended pricing, lumps all fees that are separated in the Interchange ++ pricing together; including interchange fees, card associations fees, processor charges, gateway fees, and PCI compliance fees. In this model, merchants will only get a collective fee without knowing exactly what those charges include.

Mastercard’s program for monitoring and managing merchants or industries considered high-risk due to compliance, fraud, or chargeback concerns.

A consumer financing option that lets shoppers split the cost of a purchase into multiple instalments, often interest-free, repaid over weeks or months. At checkout, the order is paid in full to the merchant by the BNPL provider, and the consumer repays the provider under agreed terms, typically with no credit check for small amounts.

A payment that has been authorized can be processed in two ways: it can be captured, sending the funds to the merchant’s account, or it can be canceled, typically due to a high risk of fraud or other reasons.

Canceling a payment is not feasible for transactions that have already been captured. In such instances, the merchant must initiate a refund to return the funds to the customer.

In the payments industry, CAP can refer to a Capacity or Transaction Volume Cap, representing a predetermined limit set on the volume or value of transactions that a merchant is authorized to process within a specified time frame. This limit is established for various reasons, including risk management, regulatory compliance, or operational considerations.

If a payment passes the necessary authorisation process, it can then be captured and, finally, completed. Capturing is the act of transferring the reserved funds for the transaction from the consumer’s account to the merchant’s.

Card schemes are payment networks linked to payment cards, such as debit or credit cards, of which a bank or any other eligible financial institution can become a member.

These companies operates a payment card network, such as Visa or Mastercard. These networks facilitate the transfer of funds between card issuers and acquirers.

Card networks impose charges for payment processing and also oversee the determination of interchange fees, influenced by various factors unique to each transaction.

Visa, MasterCard, and Union Pay are three of the biggest worldwide brands recognized as card schemes or card brands. TrustPay is a principal member of all three.

A transaction where the card cannot be physically presented to the merchant at the time of transaction. CNP Transactions can be completed for expample online, in-app, via telephone (MOTO transactions) or any time the physical card is not interacting with a card reader.

Every payment card, whether it’s a debit, credit, gift card, or another type, is assigned a distinct identification number. This number, found printed on the card, links every transaction made with the card to this unique identifier.

The initial segment of this number (typically the first 6-8 digits) is known as the Bank Identification Number (BIN) and is utilized to identify the issuing bank. The complete number is referred to as the Primary Account Number (PAN).

Customers can opt-in or opt-out of this card detail storage, allowing them to choose the level of data that the merchant can keep concerning them. By choosing to store these details for future use, the customer is creating a ‘Card on File’ – this is the default payment details assigned to this customer, enabling faster checkout through features such as one-click payments and recurring payments such as subscriptions, and more.

The card security code, also referred to as CSC, CVC, CVV, or by other names, is a numerical sequence printed on credit or debit cards alongside the card number. This code serves as an added layer of security for transactions where the cardholder cannot physically input a personal identification number (PIN), commonly known as card-not-present transactions. It was implemented to minimize the occurrence of credit card fraud.

A cardholder refers to an individual or an entity that owns a payment card, such as a credit card, debit card, or any other form of payment card issued by a financial institution. The cardholder is the authorized user of the card and is responsible for all transactions made using the card.

A verification technique utilized to confirm the ownership of a payment instrument, like a credit card, during a purchase.

Cards refer to physical or digital payment cards issued by financial institutions, such as credit cards, debit cards, and prepaid cards. These cards facilitate the transfer of funds between the cardholder’s account and the merchant’s account during the purchase of goods or services. They are typically associated with a specific card network, such as Visa, Mastercard or American Express and can be used for in-person, online, or mobile transactions.

Visa’s standardized evidence framework allowing merchants to prove legitimate cardholder involvement in cases of first-party fraud.

Two possible outcomes in 3D Secure authentication

• Frictionless: No customer interaction required; authentication is automatically approved.
• Challenge: Customer must verify the transaction (e.g., via SMS code or banking app).

A chargeback occurs when a payment is returned to a debit or credit card after a customer disputes a transaction. A customer may dispute a transaction due to a duplicate charge, merchandise that was never received, or fraudulent charges.

TrustPay offers strong Chargeback protection, minimizing fraudulent transactions and maximizing revenue for your business. Our customized risk management solutions, powered by advanced AI tools and experienced risk team ensure proactive fraud prevention.

A Chargeback Fee is a charge imposed by the acquiring bank or payment processor to the merchant when a customer disputes a transaction and the funds are returned to the customer’s account. This fee is intended to cover the costs incurred during the dispute resolution process, including administrative expenses and handling fees.

The structured process of managing payment disputes raised by cardholders. Proper chargeback handling involves quick response to representments, documentation of compelling evidence, and ongoing chargeback ratio tracking to preserve merchant account stability.

An official notice that a cardholder has disputed a transaction, prompting a formal chargeback process. Unlike fraud notifications, chargebacks are part of post-transaction dispute management and are less immediately critical than confirmed fraud reports in terms of acquirer monitoring impact.

The percentage of chargebacks compared to total transactions in a given period. Keeping the ratio below card-network thresholds is vital for maintaining account health and avoiding termination.

The process of completing a transaction and submitting payment for goods or services. A seamless and secure checkout experience is essential for customer satisfaction and can help increase conversion rates.

A transaction started by the cardholder during checkout, where the cardholder is actively involved in confirming the payment.

Funds held by the acquirer as security to protect against financial risk such as chargebacks, excessive refunds, or fraud.

Documentation submitted by a merchant during the chargeback representment process to prove a legitimate transaction, such as proof of service delivery or customer consent.

The assessment of user-generated or AI-generated content to verify it meets legal, card-brand, and regulatory standards before enabling payment acceptance.

A Cross-border Payment refers to any financial transaction that occurs when a payment method issued in one country is utilized to make a purchase from a merchant located in another country.

• Success rate: The percentage of transactions approved by issuers.
• Decline rate: The percentage of transactions refused.

Key performance indicators for payment quality.

In the realm of payments, “delay days” refer to the specific number of days by which the release or settlement of funds is intentionally deferred after a transaction. This delay is often instituted for risk management purposes, allowing payment processors or financial institutions to assess and mitigate potential issues such as chargebacks, disputes, or fraud before releasing funds to the recipient. Delay days contribute to the overall security and stability of the payment processing system, providing a window for thorough verification and risk assessment.

A Digital Wallet, also known as an e-wallet, is a secure virtual platform for managing and conducting various financial transactions, including online purchases and fund transfers. It securely stores payment information, enabling convenient and secure online transactions.

Some of the most popular ones are GooglePay, ApplePay, WeChatPay, or PayPal – all are available via TrustPay.

A claim made by a cardholder to the issuing bank questioning the validity of a credit or debit card charge. Disputes start an interaction with the merchant that could lead to retrievals or chargebacks.

A service at checkout that detects a card’s home currency (for example, EUR for a Euro-issued card) and offers the cardholder the choice to pay in their home currency rather than the foreign currency. This is most commonly utilized at POS terminals. If accepted, the transaction is converted at a disclosed exchange rate plus any DCC fee, and the converted amount appears on the cardholder’s statement.

A value assigned to online transactions indicating the level of authentication or security used (e.g. 3DS authenticated, attempted, or non-3DS).

A merchant classified by card schemes for exceeding chargeback thresholds, leading to mandatory monitoring and potential penalties.

Buying and selling goods and services online.

A regulated financial entity authorised to issue electronic money (e-money) and provide payment services. EMIs hold customer funds in safeguarded accounts, issue digital payment instruments (e-wallets, prepaid cards) and guarantee that e-money can be redeemed at par value on demand.

Embedded Payments refer to the integration of payment processing functionalities directly into a digital platform or application, allowing users to make transactions without leaving the platform.

A deeper level of compliance review applied to merchants operating in high-risk or regulated sectors. EDD examines ownership structures, business models, and transaction patterns to ensure transparency and prevent financial crime.

A collaborative network that enables merchants, issuers, and acquirers to share real-time fraud and dispute data. Ethoca alerts help merchants stop fraudulent transactions before they become chargebacks and reduce unnecessary refund costs.

In the context of payments, fraud typically includes unauthorized transactions, identity theft, or the use of stolen payment credentials to make purchases. Fraudulent activities can occur through various channels, such as online transactions, card-not-present purchases, or unauthorized access to financial accounts. Preventing and detecting fraud is crucial for maintaining the security and integrity of the payment ecosystem, often requiring the implementation of robust security measures and fraud detection systems by financial institutions and merchants.

The process of monitoring, analysing, and preventing unauthorized or suspicious transactions. Modern fraud management uses machine-learning scoring, velocity checks, and behavioural analysis to balance customer experience with security. It also includes awareness of fraud typologies such as friendly fraud.

The ratio of confirmed fraudulent transactions to total sales volume. Card schemes use this metric to assess merchant risk.

When a legitimate cardholder makes a purchase and later disputes the transaction as unauthorized, despite having received the product or service. This type of fraud, also called first-party misuse, is common in digital goods and subscription businesses. Effective chargeback prevention tools and clear refund policies help reduce friendly fraud rates.

A Gateway, in the context of payments, refers to a technology that acts as a mediator between an e-commerce website and the bank that processes the customer’s payment. It securely facilitates the transfer of transaction data, such as credit card information, between the merchant and the payment processor, ensuring the secure authorization and processing of payments.

A business model where AI systems generate or personalise digital content (such as chat interactions, visual or audio output) and platforms monetise it via subscriptions, micro-transactions or credits. Because this model often involves high user volume, personalised flows and global reach, the payment infrastructure must address approval rate optimisation, descriptor management and cross-border compliance.

A card-scheme compliance process used to resolve rule violations without immediately entering the formal compliance or dispute workflow.

A guarantee deposit, in the context of payments and financial transactions, is a sum of money held by a service provider or financial institution as a security measure. It acts as a form of collateral to cover potential risks and financial obligations that may arise during the course of business. The deposit is typically collected from merchants  and is held in reserve to mitigate the impact of chargebacks, refunds, or other liabilities. The guarantee deposit helps ensure that the service provider has funds available to address any financial issues that may occur, providing a level of assurance and financial security in the payment processing ecosystem.

A merchant category considered high-risk by Visa, requiring registration and enhanced monitoring due to industry characteristics or risk patterns.

A designation used by acquirers or payment processors to describe a merchant whose business model, geography, transaction type or vertical carries higher chargeback, fraud or regulatory risk, resulting in special pricing, reserves or contract terms.

Visa’s mandatory registration process for acquirers onboarding high-risk merchants.

In-app payments, also known as mobile payments, refer to financial transactions conducted through a mobile application or within a mobile-optimized platform. These transactions enable users to make purchases directly from their mobile devices, without the need for traditional cash or physical credit cards. In-app payments are facilitated through secure payment gateways integrated within mobile apps, offering users a convenient and seamless payment experience. With the increasing popularity of mobile commerce and the widespread use of smartphones, in-app payments have become a fundamental component of modern digital transactions and e-commerce activities.

An instant refund is a payment process that enables the immediate reimbursement of funds to a customer following a transaction cancellation or refund request. This approach ensures that customers receive their refunded amount promptly and without the typical delay associated with traditional refund processes.

Instead of the typical bank transfer processing for refunds, TrustPay now facilitate instant refunds for payment methods settled as SEPA payments, subject to the recipient’s bank support. Merchant can initiate a refund with a single click and customer will receive their money back in a matter of seconds This feature aims to optimize the overall customer experience and build trust and loyalty between businesses and their clientele.

It is a pricing model that breaks down all the costs of credit card processing into three parts; interchange fee, a card scheme/card associations fee and processing fee.

It is a pricing model where the merchant is charged a three-part fee for card transactions:

• The interchange fee is charged by the issuing (consumers) bank to the acquiring (merchants) bank and varies depending on the type of transaction e,g. card present transaction and the type of card used e.g. corporate card, consumer card etc.
• The card associations fee is charged by the card providers (Visa, Mastercard) to the acquiring bank for using their systems.
• The processing fee is charged to the merchant by their payment service provider as a mark-up for their services e.g the use of their gateway.

The advantage of this type of billing is its transparency in the fees charged by the payment service provider.

An Interchange Fee is a transaction fee that is paid by a acquirer to the card-issuing bank during each payment card transaction. It is a fee that covers the costs associated with processing credit and debit card payments and is set by the card networks, such as Visa and Mastercard. The interchange fee is typically a percentage of the transaction value, plus a fixed fee. This fee structure helps compensate the card-issuing bank for the risk and costs associated with providing credit to the cardholder and managing the payment network, while also enabling the operation and maintenance of the payment system.

In the context of the payments industry, an issuer refers to a financial institution, such as a bank, that issues payment cards, such as credit cards or debit cards, to consumers. The issuer is responsible for providing the cardholder with the means to make electronic payments and access funds within the designated account.

Know Your Business (KYB) is an extension of the Know Your Customer (KYC) process. The main difference is that KYB focuses on the business’s owners, shareholders, and suppliers before considering customers or consumers.

Know Your Customer (KYC) refers to the process that financial institutions and businesses use to verify and gather essential information about their customers. The primary objective of the KYC process is to assess the identity, reliability, and potential risks associated with engaging in financial transactions with a particular customer. KYC procedures typically involve collecting personal information, such as identification documents, address proof, and other relevant data, to ensure compliance with regulatory requirements and to prevent fraudulent activities, money laundering, and other financial crimes.

These non-traditional payment options, such as bank transfers, digital wallets, and prepaid cards, cater to specific regional preferences alongside standard credit and debit card payments. In many regions, these methods are more widely used than traditional card payments, enhancing customer satisfaction and boosting conversion rates for businesses. By offering local payment methods, businesses can expand their reach, enhance customer satisfaction, and improve conversion rates in these markets.

TrustPay provides merchants with access to a comprehensive range of popular local payment methods. Refer to the Payment Methods section for a detailed list.

An SCA exemption allowing transactions below €50 to be processed without strong customer authentication under PSD2, up to defined cumulative limits.

A decline code from issuers that guides merchants on next steps (e.g., whether retrying the transaction is appropriate).

A Mastercard database listing merchants terminated for excessive risk. Acquirers must check MATCH before onboarding new merchants.

Merchant Category Code (MCC) restrictions refer to limitations or special conditions card networks and acquirers impose on merchants whose assigned four-digit MCC signals higher fraud or compliance risk. High-risk MCCs may lead to elevated fees, transaction blocks or outright processing refusal.

A Merchant refers to an individual, business, or entity that sells goods or services and accepts payments from customers in exchange for these offerings. In the context of payments, a merchant can operate in various forms, including physical retail stores, e-commerce websites, mobile applications, or any platform where transactions take place. Merchants typically establish merchant accounts with acquiring banks or payment service providers to enable the processing of payments from customers using various payment methods. The merchant is responsible for providing customers with a secure and convenient payment experience while ensuring the timely and accurate delivery of goods or services purchased.

A Merchant Category Code (MCC) is a four-digit number assigned to businesses by credit card companies and financial institutions to categorize the type of products or services they offer. The MCC is used to classify merchants based on the nature of their business and the types of transactions they typically conduct. It assists in streamlining transaction processing and allows financial institutions to apply specific rules and regulations based on the merchant’s industry. MCCs play a crucial role in various aspects of the payment ecosystem, including transaction monitoring, risk management, and the implementation of targeted rewards programs for specific merchant categories.

To access descriptions of the various MCCs, visit Visa’s merchant data standards and Mastercard’s booklet.

The merchant’s name or identifier that appears on the cardholder’s bank statement. Clear descriptors reduce confusion and disputes.

It is a unique code assigned to a merchant by an acquiring bank or payment service provider to distinguish and track transactions associated with that specific merchant. The MID helps facilitate the efficient and accurate processing of transactions, allowing for the seamless identification and reconciliation of funds related to each merchant. It serves as a critical component of the payment infrastructure, enabling financial institutions to manage and monitor transactions, settlements, and chargebacks for individual merchants. The MID is an essential reference point for identifying and managing the flow of funds within the payment system.

finby Merchant Portal serves as the back office for merchants, offering a centralized platform for managing various aspects of their business operations. From overseeing setup configurations and projects to handling transactions and accessibility settings, the Merchant Portal provides merchants with comprehensive control and visibility over their payment processes. It acts as a user-friendly interface, empowering merchants to efficiently monitor and manage their activities, ensuring seamless and effective administration of their payment-related tasks.

A transaction processed by the merchant without the cardholder actively participating (e.g., subscriptions, recurring billing, no-show fees).

A billing model where customers are charged unless they actively cancel (e.g., free trials converting to paid plans).

One-click payment processes are a convenient feature that allows merchants to give their customers the option to pay for a product/service by clicking on a single button without having to input their complete card and address details each time. With one-click payments, the customer’s information is stored during the initial transaction. For subsequent payments, the customer only needs to provide their card security code (CVC/CVV) to finalize the order.

Using the Card on File process, users will be able to store their contact details on the merchant’s website, and then use these same details the next time they shop there.

Open Banking refers to the practice of sharing financial information securely and electronically, allowing third-party financial service providers to access and utilize consumer banking data. It enables the integration of various financial systems and services, promoting competition and innovation within the financial industry. Through open banking, consumers can grant consent for their banking data to be shared with authorized third-party providers, facilitating the development of new financial products and services tailored to their specific needs. Open Banking initiatives are governed by regulatory standards aimed at ensuring data security, transparency, and customer control over their financial information.

A Verifi product that enables issuers and merchants to share detailed order information such as product descriptions, shipping details, or customer communications, directly within issuer systems. It helps cardholders recognize legitimate transactions and reduces unnecessary disputes and chargebacks.

When an issuer approves only part of the requested authorization amount, often due to insufficient funds.

A payment facilitator is an authorized entity responsible for enrolling merchants onto an acquirer’s platform and receiving settlement funds on behalf of the acquirer.

A payment service introduced under the Revised Payment Services Directive (PSD2) that allows third-party providers to initiate payments directly from a customer’s bank account to a merchant’s account via Open Banking APIs. Payment initiation services offer a secure and efficient alternative to card payments, enabling real-time transactions, reducing processing fees, and enhancing the e-commerce payment experience. TrustPay has a PISP (Payment Initiation Service Provider) license.

Once a payment is authorized, it can be either captured or canceled, and if already captured, it can also be refunded subsequently. These actions, including capture, cancel, and refund, are classified as modifications as they alter the payment’s status.

Modifications can be executed manually via the Merchant Portal interface or automatically using the TrustPay API. When an API call is initiated, the merchant receives confirmation in the response. Following TrustPay’s processing of the payment modification, the result is communicated asynchronously through webhooks.

A system that connects to a customer’s bank and a merchant’s bank in order to make a payment transaction on behalf of a merchant. Usually a payment processor obtains the payment information from a payment gateway.

A PSP is a technology company that provides merchants with the ability to accept electronic payments. PSPs typically work with multiple acquirers and offer a variety of services, such as providing a payment gateway, processing transactions, and offering merchant services, such as fraud prevention and data security. These are third-party companies that act on behalf of merchants to handle most payment-related matters.

In the context of merchant transactions, a payout refers to the transfer of funds from an acquiring entity to the designated merchant’s account. Payouts are a critical aspect of ensuring timely and secure financial transactions, enabling merchants to access their funds efficiently and effectively.

A global security framework designed to protect cardholder data and reduce the risk of breaches.

A PEP is an individual who is entrusted with a prominent public function or has a close association with someone in such a position. Due to their potential elevated risk for involvement in corruption or financial crimes, financial institutions and payment service providers subject transactions involving PEPs to enhanced scrutiny and due diligence.

Any physical or virtual location where a customer initiates a payment interaction with a merchant, including POS terminals, self-service kiosks, mobile payment applications and online checkout pages. Under PCI PIN Transaction Security standards, POI devices are evaluated for secure handling of cardholder data and PIN entries, ensuring compliance with encryption and tamper-resistance requirements. POI covers all channels where a payment instrument is presented, whether in-store or online.

A stage of the dispute process where one party challenges the chargeback decision before escalating to final arbitration.

Pre-authorization is a preliminary step in the payment process designed to verify the functionality and validity of a payment card. This process involves temporarily reserving a specific amount of funds on the card to ensure its capability to make a successful transaction.

A notification process used to highlight a potential scheme rule violation before entering a formal compliance case.

A proactive process where merchants address customer dissatisfaction or fraudulent transactions before they escalate to formal chargebacks.

Processing currency refers to the specific currency in which a payment transaction is initially processed or authorized by a payment service provider or acquiring bank. It is the currency used at the point of sale or during the transactional process, determining the value and terms of the payment at the time of purchase. Processing currency is a critical aspect of international transactions, allowing merchants to accept payments in various currencies and enabling customers to make purchases using their preferred currency. Effective management of processing currency is essential for facilitating seamless and efficient cross-border payment transactions.
By default, you can accept payments in EUR, CZK, HUF, PLN, DKK, NOK, GBP, RON, HRK, USD, CAD, UAH, RSD, AUD, JPY, more currencies can be added on request.

The offer of processing currencies may differ from the offer of settlement currencies.

A record of a merchant’s transaction activity, covering approvals, declines, refunds, fraud, and chargebacks. Used for risk and performance assessment.

A Verifi solution that allows merchants to automate refunds for eligible disputes based on pre-defined rules. By resolving issues before they become formal chargebacks, RDR helps merchants maintain better Visa Acquirer Monitoring Program (VAMP) ratios and improve customer satisfaction.

A code used to provide additional information about a transaction and (typically) a rejection or change in status.

This code is a identifier used in the payment industry to categorize and provide explanations for specific transaction-related events or occurrences. Reason codes are utilized to communicate the underlying causes or explanations for various transaction outcomes, such as chargebacks, declines, or other payment-related issues. They serve as a reference point for both merchants and financial institutions, assisting in the analysis and resolution of transaction disputes, errors, or discrepancies.

The process through which incoming and outgoing funds and transactions are matched up.

Recurring payments refer to automated, pre-authorized transactions that occur at regular intervals, usually for ongoing services or subscriptions. These payments are initiated based on a pre-established schedule, enabling businesses to charge customers automatically for services or products on a recurring basis. Recurring payments are commonly used for subscription-based services, membership dues, utility bills, and other regular payments. They offer convenience for both merchants and customers, ensuring a seamless payment experience and uninterrupted service delivery.

Occasionally, a customer may decide to cancel a purchase or subscription, necessitating the return of funds, commonly referred to as a refund.

When the payment has not been captured, the process is straightforward: the merchant can simply cancel the payment, and the funds are promptly returned to the customer’s account. However, if the funds have already been captured, the refund process may require additional time for processing.
If a merchant disputes a refund request, a customer may make a chargeback request – you can learn more about this in our ‘Chargebacks’ definition in this glossary.

A European Union regulation aimed at enhancing payment security, promoting innovation, and increasing competition in financial services. PSD2 mandates Strong Customer Authentication (SCA) for secure online payments and requires banks to provide secure access to account data for third-party providers via Open Banking. It improves consumer protection and streamlines payment processes across the EU.

Controls set by acquirers or PSPs to manage exposure to fraud, chargebacks, or unusual transaction patterns.

A framework of tools and procedures used by acquirers and payment processors to identify, assess, and mitigate financial and compliance risk. Effective risk management combines fraud detection, chargeback monitoring, and merchant performance analysis to maintain processing continuity.

A dynamic evaluation system that assigns a numerical value to each transaction or merchant profile based on factors such as location, velocity and historical performance. A higher score indicates greater potential risk and may trigger additional verification or decline rules.

A rolling reserve is a percentage of a merchant’s gross sales withheld by an acquirer to cover the cost of chargebacks or refunds over a particular period. The sum is returned to the merchant at the end of the reserve period.

A unique identifier used by banks and processors to trace a specific transaction through the payment lifecycle.

The System to Avoid Fraud Efficiency (SAFE) Report, also known by its code T849, is Mastercard’s equivalent to Visa’s TC40 Report. It contains details of transactions that issuers have reported as fraudulent. Acquirers use SAFE data to identify affected merchants or transaction patterns early and to prevent further fraudulent activity. SAFE reports play a crucial role in Mastercard’s fraud monitoring programs and help acquirers maintain compliance thresholds.

A fee that is paid to the card scheme by the acquirer for each payment transaction done with the card scheme. In addition to the interchange cost, the fee amount is defined by the corresponding card system – these fees differ slightly between systems.

A numeric or alphanumeric code provided after each transaction, indicating whether it was approved or declined and why.

SEPA Direct Debit (SDD) is a payment method that enables merchants to collect funds directly from a customer’s bank account within the Single Euro Payments Area (SEPA). It allows for the automated processing of recurring or one-time payments, providing a convenient and efficient way for businesses to manage transactions across multiple European countries. SEPA Direct Debit adheres to standardized rules and regulations established by the European Payments Council (EPC), ensuring consistent and secure payment processing throughout the SEPA region. It simplifies cross-border payment collections, enhances payment efficiency, and promotes seamless financial interactions between businesses and customers within the SEPA zone.

Payers can get their money back: in the SDD Core scheme, a refund is possible up to eight weeks after the transaction without supplying any justification; in the case of an unauthorised direct debit, a refund request can be made up to 13 months after the transaction.

SEPA Instant payments enable euro transactions to take place in just seconds, at all times of day and night. Unlike with most other payment systems, the speed of payment doesn’t depend on an individual payment provider’s own clearing and settlement capabilities.

A direct API integration where the merchant’s server communicates securely with the PSP’s server, with no redirect for the customer.

Settlement currency refers to the specific currency in which merchants receive their financial settlements from payment processors or acquiring banks. It is the currency used to finalize and transfer the funds from the payment processing system to the merchant’s designated bank account, ensuring that merchants receive their earnings in the desired currency. The settlement currency is a crucial consideration for merchants operating in diverse international markets, allowing them to manage their finances efficiently and effectively across different currencies and geographical regions.

Settlement currencies offered by TrustPay are: EUR, USD, GBP, CAD, AUD, SEK, NOK, DKK, PLN, CZK, HUF, NZD, RON, CHF.

The settlement period, in the context of payments, refers to the timeframe during which financial transactions are processed, verified, and finalized, resulting in the transfer of funds from the payer to the payee. This period encompasses the various stages of the transaction lifecycle, including authorization, capture, and settlement.

SEPA is a payment integration initiative that aims to simplify euro-denominated bank transfers within the EU and EEA. This initiative allows for faster and more efficient cross-border payments between member countries, and helps to create a more unified European payments market.

A one-time transaction where the full amount is captured and settled immediately.

Single-sale payments refer to individual transactions where a customer makes a one-time purchase or payment for goods or services. In contrast to recurring payments or subscriptions, single-sale payments occur as standalone transactions without an ongoing commitment or periodic billing.

A Mastercard value indicating the level of security applied to an e-commerce transaction.

Visa’s required registration for specific high-risk merchant categories.

A soft decline is a temporary authorization failure (e.g., insufficient funds), while a hard decline indicates a permanent issue (e.g., stolen card). Knowing the difference improves retry logic and approval rates.

A security protocol required under the Revised Payment Services Directive (PSD2) to enhance the security of online transactions. It mandates two-factor authentication (2FA) for electronic payments, ensuring that at least two of the following independent authentication elements are used during a transaction:

1. Something the customer knows (e.g., a password, PIN, or secret question).
2. Something the customer has (e.g., a mobile phone, hardware token, or authentication app).
3. Something the customer is (e.g., fingerprint, facial recognition, or other biometric identifiers).

Subscriptions refer to recurring agreements or arrangements between a customer and a business, wherein the customer regularly receives products or services in exchange for periodic payments. Subscriptions are commonly used for various services, such as streaming platforms, online publications, software licenses, and membership programs, among others.

Unusual or suspicious customer actions or conduct that could be linked to money laundering, other unlawful acts, or the support of terrorist operations. May also refer to a transaction that is inconsistent with a customer’s known legitimate business, personal activities, or the normal level of activity for that kind of business or account.

A decline generated by the card scheme due to suspicious patterns or system-level risk indicators.

A Visa transaction category code used for specific authorization or clearing messages.

A Visa chargeback category covering certain types of disputes based on scheme-defined conditions.

A file generated by Visa containing records of transactions that issuers have identified as fraudulent. TC40 reports are shared with acquirers to help them spot fraud patterns early, take preventative action, and minimise the likelihood of related chargebacks.

An alert generated when a merchant is suspected of processing payments for unauthorized or hidden websites.

The process of replacing sensitive cardholder data with a secure token that cannot be used outside the payment environment.

In the payments sector, the term “transaction” refers to the exchange of a set quantity of currency from a customer for the purchase of goods or services from a merchant, or for the fulfilment of any other responsibilities between the two parties. Transactions commonly involve the transfer of funds through methods like card payments (debit or credit cards) or local payment options such as bank transfers and mobile payments.

A continuous process of reviewing transaction activity to detect irregular patterns or potential fraud. Often powered by AI-based systems and machine-learning models.

Transaction Risk Analysis (TRA) is a method used to evaluate the likelihood of fraud by comparing transaction data against known patterns and risk factors. It assigns a risk score to determine whether to approve, decline, or request additional authentication, helping balance security with a smooth user experience.

UBO refers to the individual or entity that ultimately owns or controls a legal entity, such as a company and benefits from its assets and profits. The UBO is the person who enjoys the ultimate economic benefits of the entity’s activities and has significant influence or control over its management and decision-making processes. Identifying the UBO is essential in financial and legal frameworks to ensure transparency, prevent fraudulent activities, and comply with regulatory requirements aimed at preventing money laundering, corruption, and other illicit financial practices.

Digital content created or customised by end-users through AI tools embedded within a platform (for example text, images, voice or interactive media). Merchants monetising UGAIC must align payment flows with proper rights management, content moderation, descriptor clarity and refund policies to reduce chargeback risk and maintain approval rates.

Visa’s platform for monitoring merchant, acquirer, and ecosystem risk, including fraud, compliance, and excessive chargebacks.

A Visa-owned platform providing near real-time dispute resolution and pre-dispute alerts. It allows merchants to respond to potential chargebacks early, resolve issues directly with cardholders, and protect approval rates.

A Visa program designed to identify, monitor, and mitigate risk among merchants in higher-risk verticals.

The Visa Acquirer Monitoring Program (VAMP) is a compliance initiative established by Visa to monitor acquirers and their merchants for excessive fraud, disputes, and chargeback ratios. Acquirers with merchants exceeding Visa’s established thresholds may face increased oversight, mandatory remediation plans, or penalties. For merchants, consistently high dispute volumes can lead to stricter monitoring, reserve requirements, or termination under acquirer risk controls.

Visa’s service for acquirers to screen potential merchants during underwriting and onboarding for risk indicators.

Webhooks are user-defined HTTP callbacks or notifications triggered by specific events or changes in an application or system. In the context of the payments industry, webhooks facilitate real-time communication between payment service providers and merchants, allowing the exchange of crucial transaction-related information, such as payment status updates, chargeback notifications, or subscription renewals.

You can use webhooks to automate business processes, for example order management or downloading reports for accounting.

A near real-time transfer of funds between bank accounts. This feature is limited for bank to bank or intrabank transfers.

A zero-value authorisation is a form of authentication where a request is made in the amount of 0 (zero) to gather customer details so that previous purchases and specific details can be found in the merchant database. A zero value authorisation enables a merchant to request a customer’s tokenised card number without presenting the transaction for authorisation.

The process of handling 3D Secure authentication, which verifies the cardholder’s identity during online transactions.

An external provider offering 3D Secure authentication services if the merchant or PSP does not use its own MPI solution.