Payment Glossary
Merchants encounter real card‑scheme and cross‑border payment terminology during onboarding, settlement, and dispute processes. When an official source exists, we label the citation, its applicable scope, and the access date instead of paraphrasing.
22
Entries
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Topic groups
132
Cited sources
Card scheme basics
3-D Secure (3DS)
3-D Secure (3DS) is a cardholder authentication protocol that adds a step-up challenge during online checkout so issuers can confirm the payer before authorizing high-risk transactions.
Card Verification Value (CVV)
Card Verification Value (CVV) is the three- or four-digit security code printed on a payment card, used to verify that the customer likely possesses the physical or virtual card during checkout.
Interchange Fee
An interchange fee is a variable cost paid from the merchant acquirer to the card issuer for each card transaction, set by card networks and influenced by card type, region, and merchant category.
Acquiring and settlement
Card Payment Clearing
Card payment clearing exchanges final transaction details so the institutions serving the merchant and cardholder can calculate what they owe.
Issuing Bank
An issuing bank provides payment cards to customers and manages the accounts used for those cards throughout authorization, clearing, and settlement.
Merchant Account
A merchant account is an account used to accept and manage card-payment proceeds before they reach a business bank account.
Merchant Acquirer
A merchant acquirer is a payment service provider that contracts with businesses to accept and process card payments on behalf of participating card networks.
Merchant Discount Rate (MDR)
The merchant discount rate is the blended price charged to a merchant for processing card payments, covering network fees, acquirer margin, and related service costs.
Merchant Identification Number (MID)
A merchant identification number is an identifier assigned within a card-processing arrangement to identify a merchant or its merchant account.
Merchant of Record (MoR)
A merchant of record is the party legally responsible for a sale to the customer, including tax, compliance, and chargeback obligations tied to that transaction.
Payment Authorization
Payment authorization checks whether a card transaction is approved by the cardholder’s issuing institution or a service acting for it before funds can later be captured.
Payment Capture
Payment capture is the instruction to collect funds for a previously approved card payment so the authorized amount can move into clearing and settlement.
Payment Facilitator (PayFac)
A payment facilitator aggregates many sub-merchants under one master merchant identification, enabling platforms to onboard sellers quickly while the PayFac manages underwriting, compliance, and settlement on their behalf.
Payment Gateway
A payment gateway is technology that passes payment information from a business's checkout to the systems that process the transaction.
Payment Orchestration
Payment orchestration is the practice of routing each transaction through the optimal acquirer, method, or gateway path based on rules such as cost, authorization rate, geography, and redundancy requirements.
Payment Processor
A payment processor is a service that handles transaction messages between businesses, financial institutions, and payment networks during authorization, capture, and related status updates.
Settlement (Card Payments)
Card payment settlement transfers funds between participating financial institutions to meet obligations from processed card transactions after clearing has been completed.
Risk and compliance
Address Verification Service (AVS)
Address Verification Service (AVS) compares the billing address submitted at checkout with the address on file at the card issuer to flag mismatches that may indicate fraud.
Chargeback
A chargeback is a forced reversal of a card transaction initiated by the cardholder through their issuer, usually citing fraud, non-delivery, or billing disputes, and debited from the merchant through the acquirer.
PCI DSS
PCI DSS is the Payment Card Industry Data Security Standard—a set of security controls merchants and service providers must follow when storing, processing, or transmitting cardholder data.
Cross-border and FX
Cross-Border Payment
A cross-border payment is a transaction where the payer, merchant, acquirer, or settlement currency spans different countries, triggering FX conversion, local method requirements, and compliance checks.
Foreign Exchange Spread
Foreign exchange spread is the markup between the market reference rate and the rate applied to a merchant or payer during currency conversion, often combined with explicit FX fees in cross-border payments.
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