Payment Ecosystem Vocabulary

A complete set of vocabulary flashcards covering basic participants, mechanisms, routing networks, and security protocols in the payment ecosystem.

Merchant

An entity selling goods or services that accepts card payments from customers.

Acquirer

The bank or organization serving the merchant that receives and processes card transactions.

Issuer

The bank or organization issuing payment cards to customers that approves or declines transactions.

Cardholder

The owner or authorized user of a payment card who receives transaction notifications.

Payment network

The network connecting the issuer, acquirer, and other parties to route transaction information.

Payment ecosystem

The complete system involving the merchant, cardholder, issuer, acquirer, network, and payment processing participants.

Payment processor

An entity that handles transaction data and manages payment execution between parties.

Payment gateway

A system connecting the merchant to payment processing networks, typically used to securely transmit online payment data.

Payment facilitator (PayFac)

An entity that helps merchants, especially small and medium-sized businesses (SMBs), access payment acceptance services.

Sub-merchant

A merchant that operates under a Payment Facilitator (PayFac) to accept payments.

Payment service provider (PSP)

A provider offering merchants access to multiple payment methods and processing connections.

Authorization

The step of requesting permission from the issuer to confirm if a transaction can be approved.

Authentication

The process of verifying identity or confirming the legitimate authority to use a payment method.

Clearing

The process of exchanging and reconciling transaction data among parties prior to settlement.

Settlement

The final step of transferring funds between participating institutions after transaction processing and reconciliation.

Transaction

A payment or financial exchange carried out between involved parties.

Payment method

The specific payment mechanism selected, such as cards, bank transfers, QR codes, or e-wallets.

Digital payment

A payment made using electronic channels instead of cash.

Card payment

A payment completed using a debit card, credit card, or prepaid card.

Contactless payment

A payment method that does not require physical contact, typically using NFC to speed up checkout.

Tokenization

The process of substituting sensitive information, such as card numbers, with secure tokens.

3-D Secure (3DS)

An additional security and authentication layer used for online card payments.

Fraud detection

A process or system utilized to spot and evaluate transactions with signs of fraudulent activity.

Chargeback

A request to reverse a transaction resulting from disputes, fraud, or invalid claims.

Refund

An amount returned to a customer when a order is cancelled or merchandise is returned.