here's the 101
Payments Processors often use very specific language, so we've put this guide together to focus on what the terms mean, and why they matter for you.
Automation Banking Blockchain Cash Flow Compliance Contractual Cost Structure Counterparty Risk Creative Custody Digital PR Financial Fraud FX High Risk Vertical Infrastructure Integration Legal Liquidity Marketing Onboarding Operational Pinterest PR Pricing Regulatory Reporting Risk Management Security SEO Settlement Strategy Technical Transparency Treasury UX Volatility
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AML (Anti Money Laundering)
Framework to prevent financial crime
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AML (Anti Money Laundering)
Framework to prevent financial crime
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API
Technical interface enabling system integration
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API
Technical interface enabling system integration
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Audit Trail
Complete record of transaction and account events
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Audit Trail
Complete record of transaction and account events
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Auto Conversion
Automatic conversion of digital assets into fiat
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Auto Conversion
Automatic conversion of digital assets into fiat
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Bank Rail
Fiat payout method such as SEPA or SWIFT
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Bank Rail
Fiat payout method such as SEPA or SWIFT
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Blockchain
Distributed ledger recording transactions across a decentralised network
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Blockchain
Distributed ledger recording transactions across a decentralised network
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Chargebacks
Reversal of card payments through banking system
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Chargebacks
Reversal of card payments through banking system
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Cold Storage
Offline storage of digital assets
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Cold Storage
Offline storage of digital assets
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Commingling vs Segregation
Whether client funds are pooled or separated
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Commingling vs Segregation
Whether client funds are pooled or separated
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Compliance
Adherence to applicable laws regulations and policies
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Compliance
Adherence to applicable laws regulations and policies
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Confirmation
Validation that a transaction is included in a block
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Confirmation
Validation that a transaction is included in a block
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Confirmations Policy
Configured number of confirmations required
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Confirmations Policy
Configured number of confirmations required
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Correspondent Banking Risk
Reliance on intermediary banks for transfers
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Correspondent Banking Risk
Reliance on intermediary banks for transfers
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Custodial vs Non Custodial Processing
Whether processor takes possession of funds
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Custodial vs Non Custodial Processing
Whether processor takes possession of funds
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Custody
Control and safekeeping of digital assets via private keys
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Custody
Control and safekeeping of digital assets via private keys
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Data Retention and Residency
Where and how long transaction data is stored
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Data Retention and Residency
Where and how long transaction data is stored
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Double Spend Risk
Risk of transaction being reversed before confirmation
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Double Spend Risk
Risk of transaction being reversed before confirmation
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Enhanced Due Diligence
Deeper compliance checks beyond standard review
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Enhanced Due Diligence
Deeper compliance checks beyond standard review
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Fiat Float
Fiat funds held before payout
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Fiat Float
Fiat funds held before payout
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Fiat Settlement
Receiving funds in traditional currency
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Fiat Settlement
Receiving funds in traditional currency
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FX Spread
Difference between market rate and processor rate
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FX Spread
Difference between market rate and processor rate
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Hot Wallet
Online wallet connected to internet
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Hot Wallet
Online wallet connected to internet
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Irreversibility
Confirmed transactions cannot be undone
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Irreversibility
Confirmed transactions cannot be undone
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KYB
Compliance verification of business identity
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KYB
Compliance verification of business identity
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Layer 2 Network
Secondary network built on top of main blockchain
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Layer 2 Network
Secondary network built on top of main blockchain
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Licensing
Regulatory authorisation to operate in a jurisdiction
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Licensing
Regulatory authorisation to operate in a jurisdiction
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Liquidity
Ability to convert assets without major price impact
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Liquidity
Ability to convert assets without major price impact
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Merchant Category High Risk Vertical
Risk classification of business type
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Merchant Category High Risk Vertical
Risk classification of business type
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Merchant Discount Rate
Percentage fee charged per transaction
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Merchant Discount Rate
Percentage fee charged per transaction
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Minimum Volume Commitment
Contractual minimum processing requirement
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Minimum Volume Commitment
Contractual minimum processing requirement
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Network Fee Gas Fee
Fee paid to process a blockchain transaction
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Network Fee Gas Fee
Fee paid to process a blockchain transaction
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Off Ramp Partner
Third party used for conversion and payout
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Off Ramp Partner
Third party used for conversion and payout
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On Chain Transaction
Transaction recorded directly on a blockchain
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On Chain Transaction
Transaction recorded directly on a blockchain
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On Ramp Off Ramp
Conversion between fiat and digital assets
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On Ramp Off Ramp
Conversion between fiat and digital assets
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Partial Payments
Customer pays less or more than invoiced amount
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Partial Payments
Customer pays less or more than invoiced amount
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Payment Gateway
Interface connecting checkout to processor
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Payment Gateway
Interface connecting checkout to processor
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Payment Window Invoice Expiry
Time allowed to complete payment at quoted rate
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Payment Window Invoice Expiry
Time allowed to complete payment at quoted rate
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Payout Hold Compliance Hold
Temporary restriction on withdrawals
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Payout Hold Compliance Hold
Temporary restriction on withdrawals
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Payout Schedule
Frequency and timing of merchant payouts
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Payout Schedule
Frequency and timing of merchant payouts
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Pricing Schedule
Full fee structure including all charges
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Pricing Schedule
Full fee structure including all charges
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Private Key
Cryptographic key that controls access to digital assets
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Private Key
Cryptographic key that controls access to digital assets
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Proof of Funds Source of Funds
Verification of origin of funds
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Proof of Funds Source of Funds
Verification of origin of funds
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Proof of Reserves
Mechanism showing custodian holds claimed assets
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Proof of Reserves
Mechanism showing custodian holds claimed assets
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Public Address
Receiving address for digital asset payments
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Public Address
Receiving address for digital asset payments
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Rate Lock Quote Lock
Guaranteed exchange rate for defined time
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Rate Lock Quote Lock
Guaranteed exchange rate for defined time
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Reconciliation
Matching payments to invoices or orders
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Reconciliation
Matching payments to invoices or orders
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Reconciliation Export Accounting Integration
Processor reports and ERP integrations
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Reconciliation Export Accounting Integration
Processor reports and ERP integrations
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Refunds Policy
Rules for issuing refunds and handling FX differences
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Refunds Policy
A refund policy sets the rules for how a business handles returns and repayments, including who covers any difference in value when exchange rates have moved.
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Reorg Chain Reorganisation
Temporary rewrite of recent blockchain history
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Reorg Chain Reorganisation
Temporary rewrite of recent blockchain history
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Reserve Rolling Reserve
Portion of funds held back for risk coverage
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Reserve Rolling Reserve
Portion of funds held back for risk coverage