Every acronym that gets thrown around in payments meetings, in plain language.
⤓ DOWNLOAD THE CHEAT-SHEET (PDF)The issuer verifying its own customer mid-checkout (OTP, biometric). Pass the challenge and fraud liability shifts to the issuer. Card security →
The US batch transfer system — files processed in scheduled windows, flat fees in cents, reversible for ~2 banking days. Payroll, rent, and subscriptions live here.
The bank that sponsors a merchant into the card network, settles its funds, and eats the loss if the merchant vanishes owing refunds. Players →
Fraud where the victim is tricked into sending money themselves on an instant rail — no chargeback to save them. The UK now mandates bank reimbursement for most cases.
The card network's cut (~0.13–0.14% per side in the US). Tiny percentage, planetary volume — Visa and Mastercard's core revenue.
The first phase of a card payment: a yes/no question to the issuer with a hold placed on funds. No money moves. The $100 journey →
The first 6–8 digits of a card number, identifying the issuer. 'BIN attacks' brute-force the remaining digits to find live cards.
Splitting a purchase into installments, usually interest-free for the buyer — the merchant pays 2–8% for higher conversion and bigger baskets. BNPL →
The card system's undo button: the issuer claws back a payment from the merchant on the cardholder's behalf, up to ~120 days later. Chargebacks →
The exchange of final transaction records between banks ('make it real'), after authorization and before settlement.
Any transaction where the physical card can't be inspected — online, phone, mail. Roughly 3× the fraud rate of in-person, priced accordingly.
A bank that executes payments in markets where your bank has no presence — the connecting flight of cross-border money. Cross-border →
A one-time cryptographic proof generated per transaction by a chip or phone, making replayed card data useless.
The “pay in your home currency?” offer abroad — a 3–8% FX markup disguised as convenience. Always pay in local currency. FX & DCC →
The device-specific token stored in your phone's wallet instead of the real card number. Wallets →
2010 US law capping big-bank debit interchange at 21¢ + 0.05% (+1¢ fraud adjustment). Shifted billions from banks to merchants — and is still being fought in court.
The global chip standard (Europay-Mastercard-Visa). The US adopted it via a 2015 liability shift, not a law: keep swiping, you eat the counterfeit fraud.
The US Federal Reserve's instant payment rail, live July 2023, 1,400+ participating institutions. Competes with the private RTP network. Instant rails →
The Fed's RTGS system for high-value wires: instant, final, irrevocable, settled in central-bank money.
The gap between the exchange rate you're given and the mid-market rate. The biggest hidden fee in cross-border payments.
The secure front door for online payments: encrypts and tokenizes card data at checkout. Moves messages, not money. Players →
The fee paid by the merchant's side to the cardholder's bank on every card transaction — set by networks, received by issuers, fought over by everyone. Interchange →
The venerable message format underlying most card authorizations worldwide — the grammar that terminals and issuers speak.
Resellers who sign up merchants for acquirers and earn trailing residuals on every transaction, forever.
The cardholder's bank: approves transactions, takes the credit risk, receives interchange, funds your rewards.
The compliance machinery verifying who's transacting and screening against sanctions — the reason onboarding takes longer than the payment.
A 4-digit code classifying what a merchant sells. Quietly determines interchange rates, rewards eligibility, and what gets blocked.
The total fee a merchant pays to accept a payment — interchange + assessments + acquirer markup, blended. ₹0 on UPI P2M in India by mandate.
The 'real' exchange rate between two currencies — the midpoint of buy/sell. Compare every FX quote against it.
Mirror accounts banks hold with each other across borders ('ours' / 'yours' in Italian). Cross-border payments are ledger updates on these — money never crosses. Cross-border →
The non-profit utility that runs UPI, RuPay, and India's retail rails — proof that payment infrastructure can be public-good-shaped.
The bridges between local money and a new rail (stablecoins especially). The crossing is cheap — the ramps, with their licenses and FX, are where cost and competition live.
The 15–16 digit card number. Radioactive: any system touching it falls under PCI-DSS. Card security →
A master merchant that onboards sub-merchants in minutes and keeps the blended spread — the Stripe/Square model. Players →
The card industry's security standard for anyone touching card data. Heavy enough that avoiding its scope (via tokenization) is a product in itself.
Brazil's instant payment system (2020): ~8 billion transactions/month, free for individuals, run by the central bank. Instant rails →
The plumbing that switches authorization messages and settlement files between parties, earning fractions of a cent at massive scale.
The merchant's evidence package re-presenting a disputed transaction: delivery proof, IP logs, receipts. Chargebacks →
Settling payments one-by-one, instantly and irrevocably, in central-bank money — Fedwire, TARGET2, India's RTGS. The most final money there is.
The Clearing House's private US instant rail (2017) — carries ~98% of US instant payment volume.
Europe's 10-second euro transfers — mandatory for EU banks to receive (Jan 2025) and send (Oct 2025), priced the same as normal transfers.
The actual movement of money between banks — the last phase, where interchange gets deducted. The $100 journey →
A token pegged 1:1 to a currency, backed by cash and T-bills held by the issuer — who keeps the interest. A bearer money-market fund on always-open rails. Stablecoins →
The global bank messaging network (11,000+ institutions). Moves zero money — only instructions. Cross-border →
Swapping a real card number for a context-limited stand-in, so merchants store claim tickets instead of secrets. Tokenization →
The entity (usually the card network) that mints and manages network tokens, mapping them back to real PANs in its vault.
India's instant rail (2016): 23+ billion transactions a month, ₹0 merchant fees by mandate, run by NPCI. The world's largest real-time system. Instant rails →
A high-value RTGS transfer: instant, final, no undo. You pay (~$25 in the US) for certainty.