ACH

An electronic network for processing batch payments and direct deposits, commonly used for bank-to-bank transfers (Automated Clearing House).

API integration

The use of application programming interfaces (APIs) to seamlessly incorporate payment processing capabilities into a merchant’s website or app.

Authorization

The process by which a payment processor verifies that a customer’s card is valid and has sufficient funds to cover the transaction amount before approval.

Batch processing

A method of grouping multiple transactions to be processed simultaneously, usually at the end of a business day, to streamline settlement.

Buy now, pay later (BNPL)

A payment option that lets customers purchase items immediately and pay for them in installments over time, often with little or no interest.

Chargeback

A reversal of a transaction initiated by the cardholder or issuing bank, often due to disputes, fraud, or processing errors.

Contactless payment

A method of payment that uses near-field communication (NFC) technology, allowing customers to tap their card or mobile device to complete a transaction quickly.

Digital wallet

An electronic system that securely stores payment information and passwords, enabling users to make transactions online or via mobile devices without repeatedly entering their details.

EMV chip

A small chip embedded in credit and debit cards that enhances security by generating a unique transaction code for each purchase.

Encryption

A method of converting sensitive information into a secure code to protect data during transmission or storage.

Flat-rate fees

A pricing structure in which a fixed percentage and/or fee is applied to every transaction, regardless of the underlying costs.

Fraud detection

The use of technology and data analysis to identify and prevent unauthorized or fraudulent transactions in real time.

Interchange fee

A fee paid by the merchant’s bank to the card-issuing bank for processing a transaction, typically included as part of the overall cost of accepting card payments.

Interchange-plus pricing

A transparent pricing model where the merchant is charged the actual interchange fee plus a fixed markup fee by the payment processor.

Merchant account

A special bank account that enables a business to accept and process credit and debit card payments.

Mobile payments

Transactions conducted using a mobile device, often through dedicated apps or digital wallets like Apple Pay or Google Pay.

Multi-currency processing

The ability to accept and process payments in multiple currencies, particularly useful for businesses with international customers.

Payment facilitator

A service provider that allows merchants to accept payments without setting up an individual merchant account by aggregating multiple merchants under one account.

Payment gateway

A secure online service that captures and transmits payment data from a merchant’s website or app to the payment processor for authorization and settlement.

Payment processor

A company that facilitates the transfer of funds between the customer’s bank and the merchant’s bank by handling the technical and security aspects of a transaction.

PCI-DSS

A set of security standards (Payment Card Industry Data Security Standard) designed to ensure that companies handling credit card information maintain a secure environment to protect cardholder data.

Point of sale (POS)

The physical location or system (such as a cash register or mobile device) where a sales transaction is completed.

Recurring billing

A payment model in which customers are automatically charged at regular intervals for ongoing services or subscriptions.

Refund

The process of returning funds to a customer when a transaction is canceled or a product is returned.

Settlement

The process of transferring funds from the customer’s account to the merchant’s account once a transaction has been authorized and cleared.

Surcharge/convenience fee

An additional fee added to a transaction amount by the merchant to cover the costs associated with processing payments.

Tokenization

The process of replacing sensitive card data with a unique, non-sensitive token that can be used to process payments without exposing actual card details.

Virtual terminal

A web-based interface that allows merchants to manually enter payment details for transactions, typically used for card-not-present scenarios such as phone orders.