Domain Context — Vocabulary
The terms a Payments PM should know on sight. Scan this before a loop; the goal is recognition, not memorization. The right word at the right moment signals seriousness.
Parties & intermediaries
| Term | Definition |
|---|---|
| Issuer | The bank that issued the customer's card or account. Makes the auth decision. |
| Acquirer | The bank that holds the merchant's side; routes auth requests through the network. |
| Network / scheme | Visa, Mastercard, Amex, Elo, RuPay, Mada, JCB, Discover, UnionPay. |
| Processor | The technology layer in front of the acquirer; sometimes the same company. |
| Gateway | The API surface; functionally the entry point of the processor. |
| PSP | Payment Service Provider — combined gateway/processor; e.g. Stripe, Adyen, Checkout.com. |
| MoR | Merchant of Record — the entity legally selling; often a third party absorbs sales-tax / compliance burden. |
| Cardholder | The consumer making the payment. |
| Beneficiary | The receiving party (in non-card rails). |
Instruments & data fields
| Term | Definition |
|---|---|
| PAN | Primary Account Number — full card number. |
| BIN | Bank Identification Number — first 6-8 digits, identifies the issuer. |
| MCC | Merchant Category Code — 4-digit code for merchant type (6051 = quasi-cash / crypto). |
| AVS | Address Verification Service — issuer checks billing address. |
| CVV / CVC | Card Verification Value / Code — 3-4 digit security code. |
| Network token | Scheme-issued token replacing PAN; lifecycle-managed (VTS / MDES). |
| Vault | PCI-tokenization layer; abstracts raw PAN out of your systems. |
| COF | Card-on-File — stored credential for future use. |
| Wallet | Apple Pay, Google Pay, Samsung Pay — abstract device-bound credentials. |
Authorization & authentication
| Term | Definition |
|---|---|
| Authorization | Issuer's go/no-go decision on whether to reserve funds. |
| Capture | Finalizing the auth into a charge. |
| Void | Reversing an authorization before capture. |
| Settlement | Actual movement of funds between issuer and acquirer. |
| 3DS / 3DS2 | 3-D Secure protocol for issuer-side authentication. |
| SCA | Strong Customer Authentication — PSD2 requirement in EU. |
| Frictionless 3DS | Issuer-decided no-challenge path. |
| Step-up | Requiring an extra authentication factor (OTP, biometric, push). |
| OTP | One-Time Password — usually SMS/app for step-up. |
| TRA | Transaction Risk Analysis exemption from SCA (acquirer-driven). |
| LVE | Low-Value Exemption from SCA. |
Fees & cost stack
| Term | Definition |
|---|---|
| Interchange | Acquirer-to-issuer fee on each card txn; largest single fee component. |
| Scheme fees | Visa / MC / etc network fees. |
| Cross-border fee | Issuer/scheme markup when countries don't match. |
| Acquirer markup / MSF | Merchant Service Fee — what the acquirer keeps. |
| DCC | Dynamic Currency Conversion — issuer-country currency offered at checkout. |
| FX spread | Margin on currency conversion. |
| Chargeback fee | Per-dispute fixed fee from acquirer. |
Disputes
| Term | Definition |
|---|---|
| Chargeback | Cardholder-initiated dispute via issuer; funds reverse. |
| Retrieval request | Pre-chargeback evidence request. |
| Representment | Merchant's defense of a chargeback. |
| Pre-arbitration / arbitration | Escalation steps when representment is challenged. |
| Reason code | Scheme-defined dispute reason (e.g. 4855 service not provided). |
| VDMP / ECP | Visa Dispute Monitoring Program / Mastercard ECP — threshold programs. |
| Friendly fraud | Real cardholder disputes a legitimate purchase. |
Metrics & KPIs
| Term | Definition |
|---|---|
| AAR | Authorization Approval Rate. |
| Conversion | Intent → completed payment. |
| TPV | Total Payment Volume. |
| GTV / GMV | Gross Transaction / Merchandise Value. |
| Take rate | Margin per txn after costs. |
| Cost per success | All-in cost ÷ successful payments. |
| Settlement speed | Time from auth to funds usable. |
| Time to availability | Customer-perceived speed to balance update. |
Emerging-market & alt-rail vocabulary
| Term | Definition |
|---|---|
| VPA | Virtual Payment Address (UPI, India). |
| UPI | Unified Payments Interface, India. |
| UPI Lite | Small-value on-device wallet, no PIN. |
| UPI AutoPay | Recurring-debit mandate framework on UPI. |
| UPI Intent / Collect | Push-from-PSP vs request-from-merchant. |
| IMPS | Immediate Payment Service, India. |
| NEFT | National Electronic Funds Transfer, India. |
| RTGS | Real-Time Gross Settlement, India high-value. |
| NPCI | National Payments Corporation of India — runs UPI, IMPS, RuPay. |
| PIX | Brazil's instant rail, run by BACEN. |
| PIX Key | Alias (CPF/email/phone/UUID) for a Brazilian account. |
| MED / MEC | PIX special-return (fraud) / operational-return mechanisms. |
| SEPA Instant (SCT Inst) | EU instant rail; ~10s settlement. |
| TIPS | ECB-operated SCT Inst settlement service. |
| FPS | Faster Payments Service (UK). |
| FedNow / RTP | US instant rails (RTP via TCH; FedNow via Fed). |
| Open Banking / PIS | Third-party payment initiation via consent. |
| AA (India) | Account Aggregator — consent-based data sharing. |
| PromptPay / PayNow / DuitNow / VietQR | SE Asian QR rails. |
| M-Pesa / MoMo | African mobile-money rails. |
| RuPay / Elo / Mada / Verve | Local card schemes. |
| Mandate | User authorisation for recurring debits. |
Crypto × payments
| Term | Definition |
|---|---|
| On-ramp | Fiat in → crypto credited. |
| Off-ramp | Crypto out → fiat in user's account. |
| Stablecoin | Crypto asset pegged to a fiat currency (USDC, USDT, EURC). |
| USDC settlement | Using USDC as a settlement rail between counterparties. |
| Travel Rule | FATF Rec 16 — share originator/beneficiary info on VA transfers. |
| VASP / CASP | Virtual / Crypto Asset Service Provider — regulatory category. |
| Self-custody wallet | Non-VASP wallet; attribution challenge for Travel Rule. |
| MiCA | Markets in Crypto-Assets, EU regulation. |
| VARA | Virtual Assets Regulatory Authority (Dubai). |
Regulators & frameworks
| Term | Definition |
|---|---|
| RBI | Reserve Bank of India. |
| BACEN | Banco Central do Brasil. |
| FCA / PSR | UK regulators — conduct / payment systems. |
| MAS | Monetary Authority of Singapore. |
| BSP | Bangko Sentral ng Pilipinas. |
| SAMA | Saudi Central Bank. |
| CBN / NIBSS | Central Bank of Nigeria / interbank settlement. |
| FinCEN | US Financial Crimes Enforcement Network. |
| FATF | Financial Action Task Force — standard setter. |
| PSD2 / PSD3 | EU Payment Services Directive. |
| PCI DSS | Payment Card Industry Data Security Standard. |
| MTL | Money Transmitter License (US state-level). |
| EMI | E-Money Institution license (UK / EU). |
| SAR / CTR | Suspicious Activity / Currency Transaction Report. |