Glossary¶

2¶

2FA¶

Two-factor authentication (2FA) is a security process that requires users to provide two means of identification before accessing an account.

The two levels of security are a password and a unique special code generated by an authentication app installed on a mobile device.

Tip

Popular authentication apps' examples are Google Authenticator and Authy.

If 2FA is enabled, a user receives a temporary 6-digit code which can be used only for a very short period: about 20 seconds. After 20 seconds the code will expire and a new code will be generated. The requirement to enter both the password and this 6-digit code makes an account better protected. Even if the password is compromised (make sure to never reveal it to anyone!), the account cannot be accessed without direct access to the mobile device.

Enable 2FA in account preferences → User profile settings.

3¶

3D Secure¶

Three-Domain Secure (3DS), also known as a payer authentication, is a security protocol that helps to prevent fraud in online credit and debit card transactions. This additional security was initiated and created by Visa and MasterCard and it’s branded as ‘Verified by Visa’ and ‘MasterCard SecureCode’ respectively.

There are 4 main parties involved in the process: the customer (card owner), the issuer (such as Visa or MasterCard), the acquirer (bank), and the interoperability domain (such as payment system).

Info

When you, as a merchant, have 3D Secure enabled on your website and your customer uses the card that is enrolled in the 3D Secure program, the process looks as follows:

The customer enters their credit or debit card information in the payment form.
Payment system contacts a directory server and gets the message that the card is registered in the program.
The customer sees the 3D Secure page when they need to authenticate themselves to the issuing bank by entering the password or a one-time PIN.
The result of the 3DS authentication goes to the payment system and then it submits transaction details to the acquirer.
The transaction is authorized or denied by the acquirer.
The customer can see the response about whether the transaction is successful or failed.

A¶

Access Scope¶

API access scopes are any permissions to write a resource include the permission to read it. Developers include a scope in certain authorization requests, which then displays appropriate permissions text in a consent dialogue that is presented to a user.

Account¶

The combination of user name and password that provides an individual, group, or service with access to the Paytone platform. There are six types of accounts depending on access rights:

Owner account¶

The privileged account that serves as a default primary contact, impacts access to the Paytone platform and allows circumvention of controls to administer the system.

Administrative (Admin) account¶

The privileged account that impacts access to the Paytone platform and has all permissions except permission to manage the Owner's access.

Manager account¶

The user account with access inviting new members, viewing and creating operations, setting up 'Payment options' and 'Payout options' but they cannot enable/disable methods and view extended reports.

Developer account¶

The account for a technical specialist which cannot create new operations but has full access to the 'Setting' section.

Support account¶

The account that has the same access as the manager but cannot invite new members and edit batch payouts.

Watcher account¶

The user account that has read-only access to all sections except the sensitive data like API keys, Integration properties etc.

Account Balance¶

Presents estimates of the revenue earned during a current payout interval calculated from the last payment and up to the day when it's generated.

Account Updater Service¶

Account Updater is a generic term for programs such as Visa's Account Updater or MasterCard Automatic Billing Updater that are offered by the credit card networks to automatically update subscription customer card data when cardholder information changes or goes out of date.

Info

This service records changes to credit card account numbers and expiration dates due to mergers, portfolio flips (e.g., Visa to MasterCard), re-issued cards (from loss or security breach) account closures, and product upgrades.

Companies that participate in updater programs have several ways to check the information in their subscriber database: automated nightly updates that check any card have been processed in the past six months, requests for information on specific cards that have been declined and requests for information on a set of cards due for their next billing instalment.

Account Health¶

A property that displays the state of connection based on account interaction with the payment provider.

Account reconnecting¶

The feature polls the provider's API to retrieve the updated information and enables to change the account credentials if they are invalid or has been invoked.

Acquiring Bank¶

A bank or financial institution that accepts debit or credit card transactions for a cardholder.

Info

Acquirers/Acquiring banks are registered members of a card network, such as MasterCard or Visa, and accept (or acquire) transactions on these debit and credit card networks' behalf for a merchant. The card network connects acquiring banks to banks that issue credit cards or issuing banks so that a customer transaction can be verified. Whenever a cardholder uses a debit or credit card in a purchase, the acquiring bank will either approve or decline the transactions based on the information the card network and issuing bank have on record about that card holder's account.

Aside from managing all transactions that a cardholder completes with his or her credit or debit card, an acquirer also assumes full risk and responsibility associated with the transactions it processes. Because of this, the acquirer charges various fees for its services. These fees vary by the acquirer, but they're commonly assessed on a routine schedule for activities such as transactions, refunds, chargebacks, and other various situations and reasons. The acquirer assesses fees on behalf of themselves, the card network, and the issuing bank.

Active Balance¶

Property of Currency account that displays an available funds without overdraft.

Activity Log¶

An overview of users' actions within the organisation.

Address Verification System¶

A service used to verify a card holder's billing address.

Affiliate¶

In eCommerce, an affiliate is a person or company who promotes other merchants' products on their website.

Info

Affiliates are also known as publishers and their purpose is to convince the audience of the value of the promoted products, to ultimately close sales. Visitors can purchase products from the merchant's website through a link tracked with a unique ID meant to track affiliate sales. Out of that sale, a percentage will go to the affiliate who intermediated the order.

Affiliate Bonus¶

A bonus payment or extra commission offered as a reward to affiliates when they reach or exceed certain thresholds defined by bonus programs.

Affiliate Marketing¶

A partnership between an affiliate and a vendor with the purpose to advertise products.

Tip

Usually, the affiliate promotes vendor's products on their website and receives a commission for every conversion it has generated.

Affiliate Network¶

A platform where vendors list their products and invite affiliates to promote them in exchange for a commission.

Tip

The affiliate network manages payment processing, customer support and provides advertising material to help marketers promote different products. It also helps advertisers manage everything while marketers use them for their reliability, range of products and ease of use.

Analytics¶

Analytics refers to the process of collecting and analysing data to discover patterns and information about user's interacting with a website, separate pages, or software products.

Annual Recurring Revenue (ARR)¶

A metric that shows the amount of money a contracted subscription is generating for one year. It is calculated by multiplying the amount of recurring revenue business is generating during a month (also called MRR) by 12.

Tip

Tracking the Annual Recurring Revenue metric is important in showing the real-time run rate of a subscription business.

Application Programming Interface (API)¶

The Application Programming Interface (API) establishes a set of functions and procedures that allow the creation of software tools which access the features or data of an application, operating system or other services. In other words, the API specifies how some software components should interact with each other or how the data gets transferred from one database to another (e.g. online forms or checkout process).

Arbitration¶

A mechanism for resolving banking disputes between merchants and shoppers.

Artificial Intelligence (AI)¶

An area of computer science which studies and creates intelligence operated by machines that work and react like humans.

Audit Log¶

Audit Log (Audit Trail) is a security-relevant chronological record, set of records, and/or destination and source of records that provide documentary evidence of the sequence of activities that have affected at any time a specific operation, procedure, or event related to user's profile.

Authorization Rate¶

Authorization rate determines what quantity of the total number of transactions were successful.

Average Cost of Service¶

A business metric that shows the total costs involved in providing a service.

Info

Average Cost of Service is calculated by tracking all the costs directly involved in manufacturing and handling a product or delivering a service.

B¶

Balance¶

The financial result of all completed transactions of a trading account.

Bank Identification Number (BIN)¶

The Bank Identification Number, also called BIN, represents the first four to six digits on a credit card, which can be used to identify the issuing bank that issued the card.

Info

The first section of the Bank Identification Number identifies the location of the bank that issued the card, while the latter portion identifies the specific name of the bank. BINs are traditionally used by online merchants as a way to detect fraud by matching the geographic area where the cardholder is located to the geographic area identified in the Bank Identification Number.

The terms Issuer Identification Number (IIN) and Interbank Card Association Number (ICA) also refer to this same collection of numbers.

A personal identification number or PI identifies a cardholder.

Base amount¶

An amount expressed in the base currency.

Base currency¶

The first currency in a currency pair in terms of exchange trading. The base currency is the currency against which exchange rates are generally quoted.

Examples: USD/JPY, the US Dollar is the base currency; EUR/USD, the EURO is the base currency.

Billing¶

Also called invoicing, billing is the process of requesting payment from a customer by generating an invoice to recover the money resulted from the sale.

Bulk Ordering¶

Ordering high amounts or pieces of a product, all at once.

Bundling¶

A marketing strategy which consists of selling multiple products as one.

Business Model¶

A business model represents a description of how a business generates revenues and makes a profit.

Info

The business model explains what products or services the business will sell and how it plans to do so, including all the costs associated with this.

C¶

Callback¶

The request which contains data about the certain entities, e. g. operation with its state, properties and request body.

Card Gate (Card Gateway)¶

A payment software solution designed to connect a merchant to their acquiring bank’s processing platform, to facilitate payment processing and allow a merchant to accept credit and debit card payments. In other words, it's an interface between the merchant and the payment processor.

Card Not Present (CNP) Transaction¶

Whenever a transaction is completed and the cardholder (or their credit card) is not physically present to hand to the seller.

Info

Whenever credit card information is exchanged over the internet, phone, or mail, it is called a CNP transaction. The card associations created this term to help identify these transactions because CNP situations tend to be where the majority of fraudulent activity occurs. The Address Verification System is one way that the card associations encourage sellers and banks to monitor for fraud in CNP transactions.

Cart Abandonment¶

Shopping cart abandonment happens when a visitor surfs an eCommerce website, adds products to the shopping cart, but exits without submitting an order.

Info

There are multiple reasons potential customers might abandon their shopping cart, like not offering the desired payment method, shipping is considered to be too expensive, the checkout process takes too long to complete or not mobile-friendly.

Cart Abandonment Rate¶

The shopping cart abandonment rate shows the percentage of abandoned carts out of the total number of completed orders.

Info

This metric is calculated by dividing the total number of completed purchases by the number of shopping carts created and expressed as a percentage.

The abandonment rate is a key performance indicator to understand how the visitors are surfing on an eCommerce store, how's their shopping behaviour and which optimisations should be made to increase the conversion rate.

Channel Manager¶

A stand-alone solution or a set of advanced features on an eCommerce platform dedicated to managing sales channels.

Chargeback¶

Chargeback is the return of funds to a consumer, initiated by the issuing bank of the instrument used by a consumer to settle a debt. Specifically, it is the reversal of a prior outbound transfer of funds from a consumer's bank account, line of credit, or credit card.

Info

When a consumer is either unhappy with a product or service or didn't receive purchased product or service, the customer's last resort is to contact their bank or credit card company after trying to resolve the issue with a merchant. The issuing bank or credit card company, as the last option can issue a credit to the customer, called a chargeback. Other reasons for a chargeback include bank processing errors, duplicate billing, identity theft, disputes over the price charged and processed, or missed refunds.

Merchants may suffer heavy penalties for chargebacks. Chargeback processing is an expensive process for all parties involved, from the issuing bank to the acquiring banks, to the payment service provider, and the fees charged to the merchant for each chargeback often reflects that. The card associations have strict rules about chargeback management which they require banks, payment service providers, and merchants to follow. If a merchant receives too many chargebacks, it will no longer be permitted to accept credit cards from the card associations. It is always in a merchant's best interest to issue a refund before a chargeback occurs.

Chargeback Rate¶

A metric that shows the ratio between the total number of transactions and the total number of chargebacks a merchant has earned.

Checking Account¶

A deposit account held at a financial institution that allows withdrawals and deposits.

Also called transactional account, a checking account allows easy access to money, being accessed using checks, ATMs, and electronic debit cards among other methods. Transactions are debits to a checking account while a credit is a deposit. Money stored in a checking account is usually spent daily for the majority of transactions.

Checkout¶

A multi-step process in the eCommerce purchase flow that ends up at online order.

Info

The checkout process starts with the page showing all the products added to the shopping cart and finishes when the actual order is submitted. Having an optimized checkout flow is vital for the success of an eCommerce business.

Churn Rate (Attrition)¶

Customer churn happens when a company loses customers due to various reasons.

Info

There are two types of attrition: voluntary churn and involuntary churn. Voluntary churn happens when a customer decides to stop using a product or downgrades from a paid version. Involuntary or passive churn happens when subscriptions are cancelled without action on the customer's part, but due to failed payment authorizations.

Co-termination¶

Co-termination, also known as billing charges alignment, gives customers owning two or more active subscriptions for different products acquired from the same vendor and the possibility to synchronize expiration/renewal dates.

Tip

The co-termination process enables the proration of subscriptions by setting a single renewal date for multiple items.

Commerce Account¶

An account on the provider hub that holds information about a particular merchant including the merchant's name and logo, contract scheme, creation date and time etc.

Commerce Scheme¶

Commerce Schemes defines a set of rules comprised routing and FX-rate schemes for both ingoing and outgoing transactions in supported currencies.

Commerce Service¶

A generic term for all services that are supported in the Commerce section on the provider hub.

Configurable Retry Logic¶

A platform feature that recovers failed transactions due to soft declines.

Conversion Rate¶

Conversion rate shows the percentage of visitors/users who “convert” on the action of a webpage or campaign.

Info

Actions taken by a visitor may include purchasing, submitting a form, downloading content, calling a contact phone number or making an extended site visit. To find out the conversion rate, to take the number of conversions and divide it by the number of orders.

Credentials¶

Credentials refer to the verification of identity. They may be part of a certificate or other authentication process that helps confirm a user’s identity to a payment service provider.

Credit Card¶

A plastic card with an information-holding magnetic strip that is issued to a cardholder for the use of purchasing goods and services through a credit account.

Info

Credit Cards contain several informational and security features, among them, a 16-digit embossed card number, an expiration date, and a hologram. On the reverse side is a magnetic stripe, signature panel, and 3-digit Card Verification Value (CVV). Several payment systems use non-standard alternatives such as key fobs and miniature cards.

Credit cards are linked to lines of credit, so their use implies an obligation to pay the credit issuer, as opposed to a direct withdrawal from existing funds.

Credit Card Account Number¶

The number that uniquely identifies a specific credit card account.

Info

The first four to six digits of the number are the Bank Identification Number, identifying the issuing bank. The last digit is a check digit, used to detect errors. The rest of the digits represent the account number assigned to the cardholder.

Credit Card Authorization¶

A request to see whether a credit card is approved for use to complete a given purchase transaction.

Info

Authorization is necessary to check whether a cardholder's credit card holds sufficient funds and is approved to purchase from a merchant. An authorization request first emerges whenever a cardholder attempts to purchase a good or service through a debit or credit card.

The request for authorization is first sent through the merchant's acquiring bank to determine the cardholder's bank. When notified, the cardholder's bank determines whether the transaction with the merchant will either be approved or declined based on the cardholder's line of credit. After the acquiring bank clarifies whether the cardholder holds sufficient funds or credit for the transaction, information travels back through the acquiring bank to the merchant. If the transaction is approved, the amount of the transaction is deducted from the cardholder's account and the cardholder gets a receipt.

Credit Card Authorization Code¶

The credit card authorization code represents the five or six numbers generated by an issuing bank to validate a credit card whenever it is approved in the sale of a good or service.

Info

During a sales transaction, an authorization code is sent from an issuing bank with the message to either authorize or decline a sale. The outcome depends on whether the customer has sufficient funds or credit to purchase the product or service. If the customer does not have sufficient funds (or the card is stolen or counterfeit), the message signals to decline the transaction.

If the customer does have sufficient funds, the message and the code can be used to verify that the transaction was approved.

Credit Card Interchange¶

The process in which an acquirer or acquiring bank submits approved card transactions on behalf of its merchants.

Info

Interchange refers to the clearing and settlement of records between payment system participants. The term can also be used to describe the fees or transfer pricing between issuers and acquirers. Participating acquirers and issuers pay or receive interchange each time a credit or debit card is used.

E.g.: banks pay interchange for the fees associated with card-based transactions. The fee tends to be paid by the acquiring bank, or the merchant's bank, to the consumer's banks, or the issuing bank.

Currency Account¶

Currency holding accounts that give the flexibility to make and receive foreign currency payments in selected currencies without converting the funds into base currency. For online businesses, multiple currency accounts enable to support billing in multiple currencies and consolidate transaction data made in the same currency for accounting and financial management purposes.

Customer Acquisition Cost (CAC)¶

The total amount of costs that a business is spending to acquire a customer.

Info

Customer Acquisition Cost (CAC) consists of all the money spent towards earning a customer, from human resources to marketing, sales and customer onboarding of support efforts.

Customer Relationship Management (CRM)¶

The software and processes of tracking the information that defines a prospect or customer relationship.

Customer Retention¶

Customer retention refers to the strategies used by a company to keep its customers coming back to purchase more products.

Info

Customer retention is an effective strategy to grow an eCommerce business, as retaining buyers is more cost-effective than customer acquisition. Retention plays a pivotal role in every software and online services companies' growth. It directly impacts customer lifetime value (CLTV) and is a key barometer of the health of your subscriber base.

D¶

Dashboard¶

An interface that acquires and consolidates data across an organization and visually represents data for use.

Delayed Delivery Transaction¶

A delayed delivery transaction happens when a cardholder completes two separate [transaction receipts and a buyer does not receive a good or service immediately at the time of purchase. The first receipt functions as a deposit for goods or services, such as a down payment. The second receipt is to pay the remaining balance due to the merchant.

Deposit¶

A direct balance top-up with the desired and allowable amount.

Deposit Account¶

A savings account that allows money to be deposited and withdrawn by the account holder.

Digital Commerce (eCommerce)¶

Also known as eCommerce, digital commerce is the buying and selling of goods and services using the Internet, mobile networks and commerce infrastructure.

Digital Wallet¶

A system that securely stores users' payment information and passwords for numerous payment methods and websites.

Direct rate¶

A direct rate (a direct quote) is a currency exchange rate between a base and exchangeable currency in the context of using FX rates from open resources.

Examples: USD/JPY rate from 'currencylayer', where the US Dollar is the base currency, is a direct rate.

Download Insurance Service (DIS)¶

The Download Insurance Service (DIS) enables customers to download a file assigned to the digital products they have purchased for an extended period, either by accessing a link sent via email or by logging in to their buyer account.

Dunning Management¶

Dunning management tools are used in the case of payment cancellation and they automatically attempt to authorize the payment and to renew the subscription, as soon as the shoppers update their payment information.

E¶

Electronic Storefront¶

An eCommerce solution for merchants who want to host a website that advertises their products or services and for which consumer transactions are generated online.

Estimated Rate¶

The preliminary result of applying a rule to the source rate. After savings, rate rule will be used for this currency pair exchanging.

Exchange Rate¶

The value of one currency versus another currency. Most exchange rates are free-floating and will rise or fall based on supply and demand in the market.

Exchange Rate Type¶

A type of exchange rate formation. There are two basic types: fixed wherein a currency’s value is tied (usually, by the government) to the value of another single currency and commercial (market) wherein it's allowed to fluctuate according to the foreign exchange market and daily established by commercial banks or other financial structures. Also, commercial bid rates are always higher than ask.

Expired Card Handling¶

Expired Card Handling enables a payment service provider to identify and update expired cards to increase authorization rates.

F¶

Fraud¶

Making use of the internet to submit fraudulent transactions.

Freemium¶

A customer acquisition model where software is offered with a limited feature set for free without a time limit.

G¶

EU GDPR is an abbreviation for the European Union General Data Protection Regulation, a regulation that defines how organizations need to protect the personal data of European citizens.

Info

Personal data is considered anything that can be used to identify a person, including first and last name, email address, ID number, credit card number or an IP address from which a person visits a website. This regulation applies to all organizations located in the European Union or outside of it that handle personal data of EU citizens.

Growth Hacking¶

A process that implies running multiple tests and experiments in marketing, customer success, product development, sales funnels, and other areas as well, to help a business quicker reach success.

H¶

Hard Decline¶

Hard declines are permanent authorization failures that cannot be recovered and should not be retried, can happen because of stolen or lost cards, invalid credit card data or account closure.

Info

Out of the total number of declines, 10% to 20% are hard declines.

Hosted Payment Page (Checkout)¶

A multi-themed ready-made frontend application that uses the Commerce Public API to visualize available payment services and create a payment invoice. After successful invoice creation, depending on the payment flow, the client is redirected to the final gateway.

Hypertext Transfer Protocol Secure (HTTPS)¶

A communications protocol for secure communications over a computer network. It provides authentication for websites and servers that guard against 'man-in-the-middle' attacks, allowing users to trust that a given website or asset accurately represents itself through the web address.

This system adds Hypertext Transfer Protocol (HTTP) to SSL/TLS, providing bidirectional encryption.

I¶

Independent Sales Organization (ISO)¶

A third-party sales organization that signs merchants up to accept credit cards on behalf of one or more acquiring banks.

Info

An Independent Sales Organization is a sales force for hire used by acquirers that do not wish to staff and manage a sales force internally. Generally, ISO sales representatives receive a commission for each merchant they sign.

Intelligent Payment Routing¶

Intelligent Payment Routing enables to match or route card transactions to the payment gateways best equipped to handle them and retry authorizations using a failover or backup gateway.

Inverted Rate¶

An inverse ratio to a direct rate, a currency exchange rate between an exchangeable and base currency in the context of accepting FX rates from open sources. An inverted rate is used primarily when a direct rate on this currency pair unsupported by the rate source.

Examples: from API CBRF, USD/RUB rate is only available as the direct, that's why an inverted rate RUB/USD is used in the relevant Rate scheme.

Issuing Bank¶

An issuing bank is represented by any bank or financial institution that grants credit cards and/or lines of credit through card associations.

L¶

Ledger¶

A tool for accounting and financial management. The Ledger screen includes all aspects of the accounting and based in double-entry bookkeeping, hence the use of debits and credits.

Localisation¶

Localization refers to tailoring the details of products and services sold online to specific markets or geographic regions. Localization involves identifying a user and tracking its geolocation, apparently to provide a better user experience.

M¶

Marketing Automation¶

Marketing automation sends personalized marketing messages based on a customer's activity and preferences.

Merchant¶

A merchant represents a person or company that sells goods or services. An eCommerce merchant refers to a party that sells goods or services through the internet.

Info

A merchant works with an acquiring bank to apply for and receive a merchant account. Whenever a customer purchases an item with a credit or debit card, the merchant submits the purchase transaction information to the acquiring bank which will submit it through the card association network to the card holder's issuing bank. The issuing bank will approve or decline the charge, and bill the cardholder the amount due to the merchant.

Merchant Account¶

An account issued by an acquiring bank that allows a business to accept credit and debit cards.

Info

A merchant account is an account number issued by an acquiring bank for a specific merchant. This account number is similar to other unique account numbers issued by a bank (like a bank account number) but is specifically used by the merchant to identify itself as the owner of the transaction information it sends to the bank, and the recipient of the funds from the transactions. As part of the application to receive a merchant account, merchants are required to agree to follow the regulations set by card associations. Merchant accounts are subject to varying fees. These fees can either be implemented through monthly billing, as a percentage of each transaction or both.

Merchant Category Code (MCC)¶

A 4-digit code designated by a credit card company that lists the product, service, or line of business of a merchant.

Info

A merchant category code is first assigned by a credit card company, such as Visa or MasterCard, to a merchant once it begins to accept one those companies' credit cards. If a merchant is involved in more than one type of business, then the Merchant Category Code will apply to that merchant's primary line of business.

Merchant Discount Rate¶

A fee assessed for the processing of a credit card payment from a customer.

Info

Discount rates are traditionally stated as a percentage of each purchase transaction processed. Often these rates are based on the type of business the transactions are being processed for, the types of credit cards used by consumers (business and rewards cards often cost more), and the size of the average transaction (also known as an average ticket, or average sale amount). Usually, the largest component of the discount rate are the fees charged by the payment system itself, which is often called interchange.

Merchant of Record¶

An entity that is authorized and held liable by the financial institution to process the end consumer’s credit and debit card transactions.

Monthly Recurring Revenue (MRR)¶

Monthly Recurring Revenue (MRR) is a metric used to understand how much money customers are paying monthly for subscriptions for a product or service.

Info

This metric tells how much revenue comes for a subscription business each month. MRR is calculated by multiplying the number of customers a business has by the average of their monthly subscriptions.

N¶

Net Promoter Score (NPS)¶

The Net Promoter Score (NPS) measures how likely customers are to recommend a product or service.

Tip

Find out the NPS by asking customers the likelihood that they would recommend a business on a scale from 0 to 10. Customers who rate a 9 or 10 are considered promoters, those who rate a 7 or 8 are considered passives, and anyone who rates 6 or below is regarded as a detractor. Figure out the NPS by subtracting the percentage of detractors from the percentage of promoters.

O¶

Omnichannel¶

A fully-integrated approach to commerce that provides shoppers with a unified experience across online and offline channels (e.g., touchpoints).

On-premises¶

On-premises software is a type of software delivery model that is installed and operated from a customer's in-house server and computing infrastructure.

Operating Regulations¶

The rules that govern payment system participants regarding system membership, the acceptance and exchange of transactions, the pricing of transactions, the security of cards and data, and other topics.

Overdraft¶

An extension of credit from a lending institution that is granted when an account reaches zero. The overdraft allows the account holder to continue withdrawing money even when the account has no funds in it or has insufficient funds to cover the amount of the withdrawal.

P¶

Partial processing¶

Payment¶

The transaction that results in the transfer of monetary funds from the customer bank or credit card account to the merchant bank account.The online payment can be done from a credit card, checking account or another clearinghouse like PayPal and similars.

The typical online payment process has the following stages:

Customer submits the payment information to the merchant. For example, the customer completes the payment form on the merchant website and submits the information.
The merchant submits the payment information to the online payment gateway.
The online payment gateway submits the payment to the payment processor.
The payment processor authorizes the payment and responds to the payment gateway
The payment gateway responds to the merchant
The merchant responds to the customer showing if the online payment was successful or not and taking the appropriate action.

Payment Card Industry Data Security Standard (PCI)¶

A mandatory set of rules and regulations created to reduce credit card fraud.

Info

PCI Compliance currently has six objectives: to build and maintain a secure network, to protect cardholder data, to maintain a vulnerability management program, implement strong access control measures, regularly monitor and test networks, and to maintain an information security policy. These objectives are maintained through a set of strict regulations merchants and payment service providers must follow to collect and transfer credit card information.

Payment Gateway¶

Any software that facilitates the communication of transaction information.

Payment gateways are software and servers that transmit transaction information to acquiring banks and responses from issuing banks (such as whether a transaction is approved or declined). Essentially, payment gateways facilitate communication within banks.

Payment Invoice¶

An invoice is a payment request sent by a merchant that lists the goods or services, includes the total amount and any necessary taxes, and provided it to a customer.

Payment Method¶

The way that a customer chooses to pay to the merchant. Typically, payment methods include cash, checks, credit or debit cards, money orders, bank transfers and online payment services such as PayPal and others.

Payment Processor¶

A payment processor is a company authorized to process credit card transactions between buyers and sellers.

Info

Payment processors enable merchants to receive debit or credit card payments online by providing a connection to an acquiring bank. These processors perform many functions such as evaluating whether transactions are valid and approved, using anti-fraud measures to assure that a purchase transaction is initiated by the source it claims to be. Processors are held to standards and regulations organized by credit card associations. These standards include rules regarding fraud, chargebacks, and identity theft.

Payment Service¶

A virtual entity that displays the payment method linked with the specific currency.

Payment Service Provider (PSP)¶

A third party that helps merchants accept and facilitate payments.

Info

Payment service providers partner with acquiring banks to offer merchants the capability to accept payments. Payment Service Providers often offer services in addition to processing transactions. These services include Payment Card Industry Data Security Standard (PCI) compliance, fraud protection, and the ability to process different currencies and translate different languages.

Payout¶

The transaction refers to the financial return or monetary disbursement of investment or annuity.

Payout Method¶

The way that the merchants can refund customers, pay suppliers, withdraws and transfer funds.

Payout Point¶

An aggregation entity that sets a configuration for processing a payout request through links to the exchange rate scheme and the routing scheme that are set for it.

Payout Request¶

Operation for abstraction from route and payout. Allows dynamic routing and failover for payouts.

Payout Request Event Log¶

Event log for a specific request for payout. Gives detailed information about the process for requesting payout.

Payout Routing Scheme¶

An aggregation entity responsible for routing configuration. Consists of a set of routing rules for each payout method.

Payout Routing Rule¶

Route processing rule for the payout method currency. Sets the route processing strategy and the conditions under which this strategy will be active.

Payout Service¶

A virtual entity that displays the payout method linked with the specific currency.

Personalisation¶

A targeting method in which a webpage, ad or email message appears to have been created specifically for a recipient.

eCommerce personalisation means delivering individualised content (discounts, offers or product recommendations) to website visitors based on their previous actions, demographics and other personal data. Personalisation techniques include adding the recipient’s name or any personal information in the message you are delivering, customising the user experience on your online store, offering a discount based on the shopper's behaviour or recommending products.

Point-of-Sale (POS)¶

The location where a merchant and a cardholder complete a transaction.

Purchase Flow¶

Also known as shopping flow, the purchase flow represents steps and actions a customer takes to complete a purchase.

Q¶

Quarterly Recurring Revenue (QRR)¶

A metric used to understand how much money customers are paying quarterly for subscriptions for a product or service.

Tip

QRR can be calculated by multiplying the number of customers a business has by the average of their quarterly subscriptions.

R¶

Recurring Revenue¶

Recurring revenue is the portion of a company's revenue that can be counted on in the future, having a high degree of certainty and being predictable and stable.

Recurring Transaction¶

Recurring transactions are charges applied to a cardholder in predetermined intervals for services or goods of an ongoing nature (memberships, subscriptions).

Info

In a recurring transaction, a cardholder will purchase a service or good. Instead of charging one price, the merchant will establish a set interval of time (usually, a month) in which the consumer will be charged an agreed-upon sum. This payment will continue until cancelling the service or—if the charge applies to one part amount—amount is paid off.

Refund¶

Money returned to a payer or the act of returning money previously received.

A refund usually refers to the reimbursement of funds to a customer for a product or service provided, for reasons such as defects in merchandise or dissatisfaction with labour performed.

Renewal¶

Renewals are the actions a customer takes to renew his subscription by placing a renewal order and they can be manual or automated.

S¶

Sales Channel¶

A way of bringing products or services to market so that they can be purchased by customers.

Info

A sales channel can be direct if it involves a business selling directly to its customers, or it can be indirect if an intermediary such as a retailer or dealer is involved in selling the product to customers.

Sales Closing Ratio¶

The Sales closing ratio is a metric used to determine how well is performing an individual sales representative.

Tip

This metric is calculated by comparing the number of closed deals to the number of presentations one sales representative makes.

Sales Receipt¶

An electronic or paper record of a transaction, generated at the point-of-sale.

Info

Whenever a customer purchases a product or service, they will receive a paper or electronic note that usually includes the merchant's name and address, as well as the transaction number, the date, the item sold, and how much was charged for that item or service. Tax is also often included in a receipt. Some point-of-sale devices include the possibility of sending the sales receipt by email.

Shipping¶

The process of delivering goods to a customer, usually through the mail.

Shopping Cart¶

A shopping cart on an eCommerce site is a piece of software that facilitates the purchase of a product or service.

Tip

Shopping carts bridge the gap between shopping and buying, so having the best shopping cart application and integrations is extremely important to an online business.

Shopping Cart Integration¶

Shopping cart integrations are services or software used to simplify the eCommerce process.

Info

Shopping cart integrations offer support in handling orders, inventory, accounting, e-mail marketing, and other eCommerce activities. They are connected to the shopping carts and granted access to the customer data to streamline digital commerce operations.

Soft Decline¶

Soft declines are temporary authorization failures which may be successful after a subsequent attempt.

Info

Soft declines happen because some of the following reasons: insufficient funds; card activity limit exceeded; failures due to system, technical or infrastructure issues; expired cards. Out of the total number of declines, 80% to 90% are soft declines.

Software-as-a-Service (SaaS)¶

A software licensing model in which access to the software is provided on a subscription basis, with the software being located on external servers rather than on servers located in-house.

Info

Software-as-a-Service is typically accessed through a web browser, with users logging into the system using a username and password. Instead of each user having to install the software on his computer, the user can access the program via the internet.

Split Payment¶

A means by which payment for a single order of goods or services is made using more than one payment methods.

Info

Split payment is a multi-payment method that either involves multiple payment cards owned by the user individual or multiple payment cards of different parties involved in the transaction.

Split Payout¶

The same means as the split payment but for outcome transactions from the merchant account.

Subscription¶

A subscription is a recurring transaction made regularly in exchange for a product or service.

Info

Subscription business models are based on the idea of selling a product or service to receive monthly or yearly recurring subscription revenue. They focus on recurring revenue—a single customer pays multiple payments for prolonged access to a good or service.

Subscription Lifecycle¶

Subscription lifecycle refers to the process of managing the stages a customer goes through when doing business with a SaaS company.

Subscription Management¶

Subscription management refers to customer lifecycle operations like managing trials, assigning credits, issuing refunds and making mid-cycle subscription changes.

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While recurring billing is automated, subscription management involves billing actions that cannot always be scheduled.

T¶

Tax (Sales Tax)¶

A sales tax is a tax paid to the government for the sales of certain goods and services.

Info

Usually, the one who collects the funds for the tax from the customer is the merchant, at the point of completing the sale. The tax is then passed on to the government.

Tokenisation¶

Tokenisation is the process of replacing sensitive data with non-sensitive data (known as a token), which can be later used to get access to the initial (tokenised) data. In the payments industry, it is used to safeguard a card number and other payment data by replacing it with a unique string of numbers. This string can be used later to implement recurring payments.

Info

Tokenisation enables merchants to securely pass their customers’ data to a payment service provider.

Transaction Settlement¶

The process through which a merchant receives funds for a transaction with a customer.

Info

Once a buyer purchases goods or services, their issuing bank sends funds to the seller's payment processor, which disperses said funds to the merchant.

The term 'settlement' is also used to refer to the specific amount of funds transferred by an acquirer to a merchant for the acceptance of a card transaction.

Transition to Subscriptions¶

The process of making the shift from perpetual licensing to subscriptions.

Info

There are two transition models: most companies will choose to let legacy perpetual licenses exist alongside subscriptions or shift to subscriptions only. Choosing a transition model will depend on your business needs.

Trial¶

A free trial is a customer acquisition model that provides a partial or complete product to prospects free of charge for a limited time. Typically, a free trial runs for 14 or 30 days.

U¶

Up-selling¶

A marketing strategy to get the customers to buy a more expensive product or add more features and benefits that are related to the product they intended to buy in the first place.

Usage Billing¶

Usage billing (also known as metered billing) enables charging customers a fixed recurring fee for their subscriptions starting with the initial purchase and subsequently as a part of the renewal process, plus overage costs for the metered resources they consume each billing cycle.

V¶

Virtual Reality (VR)¶

Virtual reality (VR) is an artificial environment that is created with software and presented to the user in such a way that the user suspends belief and accepts it as a real environment.

Voice Shopping¶

Voice shopping is the process of making purchases using smart speakers, chatbots or virtual assistants.

Voice-activated Banking¶

Voice banking is a process that allows a person to record a set list of phrases with their voice, using the recording to create a personal synthetic voice.