Paymentpedia

3

• Payment Industry Terms

  3DS (3-D Secure)

  An additional security layer for online card transactions.

A

• Payment Industry Terms

  A2A (account-to-account)

  A2A payments allow for money to be moved from one account to another, without the need for third-parties.

• Payment Industry Terms

  Acquirer

  A financial institution that authorizes and settles payments for merchants. (See also Merchant of Record)

• Payment Industry Terms

  API (Application Programming Interface)

  A set of programming tools that allows software to interact with other services or applications.

• Payment Industry Terms

  APM (alternative payment method)

  Refers to any form of payment that isn’t a major international credit card brand.

• Payment Industry Terms

  ARN (Acquirer Reference Number)

  A unique number assigned to a transaction during payment processing.

• Payment Industry Terms

  Auth/Capture

  A two-step authorization process for credit card payments:

  • Authorization: verifies the cardholder's ability to pay and reserves the funds.
  • Capture: confirms the transaction and collects the funds from the cardholder.

B

• Payment Industry Terms

  BIN (Bank Identification Number)

  The first six digits of the PAN, which identifies the issuing bank.

• Payment Industry Terms

  BNPL (buy now pay later)

  BNPL differentiates itself from installment loans by primarily offering zero-interest payment installments, without the need for a credit card.

C

• Payment Industry Terms

  Card Networks (Card Schemes)

  Organizations that set rules and provide infrastructure for processing card payments (e.g., Visa, Mastercard).

• Payment Industry Terms

  Cardholder

  The person who uses a credit or debit card to make a payment.

• Payment Industry Terms

  Conversion Rate (CR)

  The percentage of transactions successfully completed compared to the total number of transactions processed.

• Payment Industry Terms

  Credit Card Payments

• Payment Industry Terms

  Cross-border

  A term describing payments made between entities in different countries, often involving currency exchange and additional regulatory or processing complexities.

• Payment Industry Terms

  CVV (Card Verification Value)

  A security code (usually 3 or 4 digits) on the back of the card used for online transactions.

D

• Payment Industry Terms

  Descriptors

  Text appearing on the cardholder's statement describing the transaction.

• Payment Industry Terms

  Digital wallet/eWallet

  Digital wallets allow users to instantly transfer funds through several linked routes. The user will transfer the funds from an existing bank account, or credit/debit card information must be uploaded to transact.

F

• Payment Industry Terms

  Fallback

  An alternative processing channel used if the primary channel experiences an error.

• Payment Industry Terms

  FX (Foreign Exchange)

  The rate at which one currency is converted to another.

G

• Payment Industry Terms

  Gateway vs Processors

  • Payment Gateway: Transfers transaction data to processors or acquirers.
  • Payment Processor: Provides complete payment processing services, including data transfer, authorization, settlement, and fund collection.

I

• Payment Industry Terms

  Installments

  Prevalent in Latin America, installment credit refers to credit card-based small or micro-loans designed to purchase consumer goods.

• Payment Industry Terms

  Interchange Fee (IC)

  A fee paid between banks for the acceptance of card-based transactions, typically paid by the merchant’s bank (acquirer) to the cardholder’s bank (issuer).

• Payment Industry Terms

  IPN (Instant Payment Notification)

  A real-time notification sent after a transaction is complete.

• Payment Industry Terms

  Issuer

  The financial institution that issues a credit or debit card to a cardholder.

K

• Payment Industry Terms

  KYC (Know Your Customer)

  Regulations requiring businesses to verify the identity of their customers.

M

• Payment Industry Terms

  Marketplace

  An online platform where multiple vendors sell products or services.

• Payment Industry Terms

  Mastercard

  Mastercard is a leading financial services company providing payment processing and technology solutions globally. Through its extensive network, Mastercard facilitates secure electronic transactions using credit, debit, and prepaid cards, offering payment solutions that support both online and in-store purchases, as well as cross-border commerce and digital payment innovations.

• Payment Industry Terms

  MCC (Merchant Category Codes)

  Codes that classify businesses by industry type.

• Payment Industry Terms

  Merchant Discount Rate (MDR)

  A fee charged to merchants by acquiring banks for processing debit and credit card transactions. It is typically a percentage of the transaction amount.

• Payment Industry Terms

  Merchant of Record (MoR)

  The entity legally responsible for processing customer credit card transactions. dLocal acts as a local MoR in each market

• Payment Industry Terms

  Message Authentication Code (MAC Code)

  A Message Authentication Code (MAC) is a security feature used to authenticate messages and ensure data integrity during payment transactions.

• Payment Industry Terms

  Mobile money

  Mobile money is a local payment method prevalent in emerging markets. Users can deposit cash at registered agents, and send funds using an account linked to their mobile number without internet access.

N

• Payment Industry Terms

  Nequi

  Nequi is a digital wallet and financial services app in Colombia owned by Bancolombia. It provides users with an easy way to manage money, make payments, and transfer funds digitally, without needing a traditional bank account. Nequi’s features include peer-to-peer transfers, bill payments, and a virtual debit card, making it a key player in Colombia’s growing digital finance ecosystem.

• Payment Industry Terms

  NuPay

  NuPay is a payment solution from Nubank, one of the largest digital banks in Latin America, focused primarily on Brazil. NuPay offers a seamless, one-click online payment experience, allowing Nubank customers to make secure purchases without needing to enter card details. By providing a smooth checkout option, NuPay is part of Nubank's efforts to streamline digital payments for its extensive user base.

O

• Payment Industry Terms

  Oxxo

  OXXO is a popular convenience store chain in Mexico that also serves as a payment point for various financial transactions. Through its extensive network of stores, OXXO allows customers to pay bills, make cash payments for online purchases, and even transfer funds. For many Mexicans without access to traditional banking, OXXO serves as a critical financial touchpoint, making digital and e-commerce purchases more accessible.

P

• Payment Industry Terms

  PAN (Primary Account Number)

  The main card number displayed on the front of the card.

• Payment Industry Terms

  Payment Service Provider (PSP)

  A third-party company that facilitates the processing of online payments for merchants, offering services like payment gateways, transaction processing, and security.

• Payment Industry Terms

  Payment Split

  The process of dividing a payment transaction into different amounts to be sent to multiple recipients, commonly used in marketplaces or platforms with multiple sellers.

• Payment Industry Terms

  Payment Types

  Different methods for making online payments (e.g., credit cards, bank transfers, cash tickets, eWallets, etc.).

• Payment Industry Terms

  PISP (Payment Initiation Service Provider - ITP)

  A third-party service provider that initiates payments directly from a consumer’s bank account with their consent, typically used in Open Banking frameworks.

• Payment Industry Terms

  PIX

  A real-time payment system developed by the Central Bank of Brazil, enabling instant bank transfers between individuals and businesses 24/7.

R

• Payment Industry Terms

  Refunds and Chargebacks

  • Refund: A credit issued to a customer by the merchant.
  • Chargeback: A credit issued to a customer by their bank, typically due to unrecognized charges.
• Payment Industry Terms

  Return Code

  A return code provided by payment processors indicating the status or outcome of a payment transaction, such as success, failure, or rejection.

• Payment Industry Terms

  RTP (real-time payment)

  A payment method that links up and pulls money straight from a bank account and into a customer’s, in real time.

S

• Payment Industry Terms

  Sale

  A single-step transaction where the card is charged immediately.

• Payment Industry Terms

  Save

  Tokenization of cardholder information for recurring payments.

• Payment Industry Terms

  Settlement Types

  Different options payments are settled between dLocal and merchants:

  • Cross-border: dLocal collects payments locally and settles in USD abroad.
  • Local-to-local: dLocal collects and settles payments in the same local currency.
  • FX@Transfer: dLocal collects payments locally, and converts to USD/EUR for settlement with the merchant.
• Payment Industry Terms

  Smart chaining

  Recover failed and rejected card payments with the alternative that better fits the transaction.

• Payment Industry Terms

  Smart routing

  AI-driven transaction routing to the best-converting processor.

• dLocal Specific Terms

  Smartfields

  Customizable payment fields hosted by dLocal but embedded in the merchant

• Payment Industry Terms

  Sub-acquirer

  A third-party entity that processes payments on behalf of a payment acquirer. It operates under the acquirer’s agreement and is responsible for processing transactions.

T

• Payment Industry Terms

  Tokenization

  Replacing sensitive data (like credit card numbers) with a secure token for future use.

V

• Payment Industry Terms

  Verification / Zero Dollar Authorization

  A method used to verify the validity of a payment card by performing an authorization request with a zero-dollar amount.

• Payment Industry Terms

  Visa

  Visa is a global payment technology company that enables secure, reliable, and fast electronic transactions through a network that connects consumers, businesses, financial institutions, and governments in more than 200 countries. Visa offers payment solutions, including credit, debit, and prepaid cards, that facilitate everyday purchases and cross-border transactions worldwide.

W

• Payment Industry Terms

  WeChat

  WeChat is China’s leading social media and messaging app that also incorporates a powerful digital payment feature, WeChat Pay. WeChat Pay enables users to make peer-to-peer transfers, pay bills, and complete in-store and online purchases directly from the app. As a mobile wallet deeply integrated into daily life, WeChat Pay is pivotal in China’s cashless economy.