Payments Glossary

Also known as an ‘Acquiring Bank’, refers to a financial institution that processes card payments from a particular Card Scheme (or several) on behalf of a Merchant.

Refers to a collective term used to designate any type of payment method that falls outside the scope of Card Payments. This typically includes the following types of payment methods: Offline Credit Transfers, Direct Debits, E-Wallets, Vouchers, Carrier-Billing Mobile Payments, and Crypto Payments.

Refers to a financial institution that processes non-card payments from a particular APM Scheme (or several) on behalf of a Merchant.

Refers to a payment network linked to an Alternative Payment Method. Examples of APM Schemes include: Neteller, Skrill, POLi, SOFORT, etc.

Refers to a set of information and documentation provided by the merchant via their respective Sales Executive/Account Manager for the purpose of completing a merchant review process (e.g. merchant onboarding) with Fibonatix.

Refers to a computer interface that allows different applications to communicate with one another, access and share data.

Refers to a financial institution which holds a banking license given by the competent authority in its country of operation and which is authorised to provide banking services to companies.

Also known as Issuer Identification Number or IIN, refers to the first six or eight digits of a card number which are used to identify the Issuer. 

Refers to a term used in the context of Card Payments to describe pricing model in which the Merchant pays on every successful transaction a fixed fee which does not vary based on the transaction parameters. 

Also known as ‘Card Association’, refers to a payment network linked to payment cards. Examples of Card Schemes include Visa, Mastercard, American Express, UnionPay, etc.

Refers to a term used in the context of Card Payments to describe a dispute mechanism which allows a Customer to dispute a card transaction and secure a refund for his/her purchase. In essence, a Chargeback voids a card transaction, withdrawing funds that were previously deposited into the Merchant’s account and applying credit to the cardholder. A Chargeback differs from a refund in one simple way: rather than contact the Merchant in case of a dispute and request a refund, the cardholder ‘goes over the merchant’s head’ and asks the Issuer (via the relevant Card Scheme) to forcibly remove funds from the Merchant’s account. If the Issuer feels the cardholder’s request is valid, the funds will be removed from the Merchant’s account and returned to the cardholder.

Refers to a calculation of Chargebacks (count and amount) against the sales volume and Transaction count which is monitored by the Card Schemes (as well as Payment Partners and PSPs) on a Merchant level as well as on an Acquirer level. A high CBR may indicate problematic business practices by the Merchant as well as it being an indicator of financial exposure that may mean that the Merchant will very likely incur negative balances (especially over time).

Means an entity that has successfully completed the Onboarding process and is either actively a company service.

Refers to a client of our Clients (also known as Cardholder in the context of Card Payments).

Refers to software used to document, manage, and store data related to Leads, Prospects, Opportunities, and Clients as well any interactions with them throughout the various stages of the Merchant Life Cycle.

Refers to the processes related to dealing with Customer disputes (Fraud and Chargebacks for Card Payments, recalls and returned wires for Wire Transfers) on behalf of a Merchant.

Refers to the process of systematically researching and verifying the accuracy of any statements and/or documentation provided and examining the validity of the Merchant’s business model and sales practices in light of internal and external acceptance policies and guidelines. There are three levels of Due Diligence:

• Standard Due Diligence – refers to the ordinary due diligence process covered in the following sections of this document.
• Enhanced Due Diligence – refers to a variation of the Standard Due Diligence process for any merchant application considered to be of greater risk.
• Simplified Due Diligence – refers to a variation of the Standard Due Diligence process for any merchant application considered to be of lower risk.

Refers to a financial institution which holds an EMI license given by the competent authority in its country of operation and which is authorised to issue e-money and undertake payment services under the relevant E-Money Regulations (EMRs).

Refers to UK Electronic Money Regulations 2011 as well as to the relevant sections of the EU Payment Services Directive 2015/2366 (PSD2).

Refers to a term used in the context of Card Payments to describe transactions flagged by an Issuer as potentially fraudulent and reported to the Card Schemes as a TC40 report for Visa transactions (as part of Visa’s Risk Identification Service or RIS), and as a SAFE report for Mastercard transactions (as part of its System to Avoid Fraud Effectively or SAFE).

Refers to a calculation of Fraud amount against the sales volume which is monitored by the Card Schemes (as well as Payment Partners and PSPs) on a Merchant level as well as on an Acquirer level. A high F2S may indicate problematic business practices by the Merchant as well it being a typical precursor for high CBR.

Means a collaboration between two (or more) companies to add value to mutual customers by offering their services bundled together.

Refers to a term used to describe the processes and activities needed to connect two separate technological systems to each other so they can communicate with one another, access and share data.

Refers to a term used in the context of Card Payments to describe a fee charged by the Issuer to the Acquirer each time a transaction is successfully processed. These fees are passed on to the Merchant and compensate the Issuer for the risk involved in approving the payment.

Refers to a term used in the context of Card Payments to describe a pricing model in which the Merchant pays on every successful transaction a fixed fee (the second +) on top of the Interchange and the Card Scheme fees (first +) which vary depending on the level of security for the transaction and the card type used.

Also known as ‘Issuing Bank’, refers to a financial institution that issues Card Scheme branded payment cards such as credit cards, debit cards and prepaid cards directly to consumers.

Refers to any entity (store, restaurant, etc.) that accepts payments in exchange for providing a Customer with goods and/or services.

Refers to an account with a Payment Services Provider (PSP) that enables a business to accept payments in a variety of methods from its Customers. A Merchant Account is typically payment method specific (meaning that it supports particular payment types and not others).

Refers to a four-digit number listed in ISO 18245 which is used to classify a business by the type(s) of goods and/or services it provides.

Also known as Transaction Discount Rate or TDR, refers to the composite rate (i.e. including Interchange, Card Scheme fees, Acquirer fees, etc.) charged to a Merchant for payment processing services on successful transactions.

(also known as Primary Account Number or Payment Card Number) refers to the card identifier found on payment cards and which is associated by the Issuer to a particular cardholder and payment account.

Refers to any service provided that fall under the scope of Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC.

Refers to a license given pursuant to Directive (EU) 2015/2366 of the European Parliament authorizing a company to provide Payment Services.

Refers to an organisation that provides merchants with a variety of services for accepting payments by a variety of methods including card payments, alternative payment methods (APMs), and wire transfers. Typically, a PSP can connect a merchant to multiple acquirers, APM networks and other solution providers. In most cases, the PSP will fully manage the technical connections, relationships with the external network, and any other element related to the technical aspect of processing payments. Furthermore, PSP will often offer additional services such as: risk management, transaction matching, reporting, fund remittance and fraud protection in addition to multi-currency functionality and services.

Refers to a contractually predefined period (usually a day, a week or a month) during which processed transactions are accumulated for settlement to a merchant. The duration of the Processing Cycle can vary from merchant to merchant and depends on the details of the merchant’s agreement with Fibonatix and/or the relevant Payment Partner.

Also known as ‘Financial/Finance Statement’, refers to a periodic financial report provided to the merchant by Fibonatix’s Client Financials team. The Processing Statement summarises the processed volume minus any fees charged during the reporting period and the final amount that would be paid out on the Settlement Date.

Is an idiomatic term used to refer to any finding(s) discovered as a result of the various checks conducted during merchant Onboarding which can be interpreted as an indication of Risk.

Also known as an Inquiry or Request for Information or Soft Chargeback, refers to a term used in the context of Card Payments to describe a type of non-financial dispute in which the cardholder reaches out to their Issuer and is either requesting more details regarding a particular transaction or the Issuer requires additional information before moving forward with a Chargeback.

Refers to exposure to possible damage. In general terms, Risk is calculated as: likelihood x impact. In the context of this document, we refer to two types of possible damage:

• Financial Damage – refers to a loss of capital as a direct result of an event. It could be a one-time event such as the imposition of a fine or an ongoing event such as a merchant account balance becoming negative over time.
• Reputational Damage – refers to a negative change of perception by key stakeholders, including clients, partners, investors, regulators, and employees in a way that may indirectly lead to loss of capital. The negative change of perception can stem from a wide range of events (e.g.  negative publicity, internal fraud, mistreatment of Customers, failure of internal processes, etc.), but is generally driven by the belief that the future ability of an organization to deliver on its stated goals and performance targets will be worse than previously expected, given the new information that has come to light.

Refers to the act of transferring the funds accumulated during the Processing Cycle to the merchant’s Settlement Account.

Refers to an Account held by a Merchant with a Bank or EMI to which the merchant wishes Fibonatix and/or the relevant Payment Partner to deposit any funds due as a result of the merchant’s payment processing activities.

Refers to a financial institution (Bank/EMI) that offers Settlement Account services to Merchants.

Refers to the day on which funds, accumulated during the Processing Cycle are paid out to the merchant.

Refers to a four-digit code system used by the UK’s Companies House as well as other government agencies for classifying businesses into an industry type.

Refers to the person(s) and/or entity(ies) that is/are the beneficiary(ies) of a company’s capital.