Payments glossary
Short and practical: what the terms in payment provider contracts mean and how they affect your business.
3-D Secure (3DS)
3-D Secure is an extra check of the buyer during online card payment: an SMS code, approval in the banking app or biometrics.
Acquiring
Acquiring is the service of accepting cashless payments: a bank or payment company takes the buyer's payment and settles the funds to the merchant.
Chargeback
A chargeback is a forced reversal of a payment initiated by the buyer's bank when the customer disputes a transaction.
H2H (host-to-host)
H2H (Host-to-Host) is a direct API integration in which the merchant collects payment data on its own page and passes it to the provider.
High-risk merchant
A high-risk merchant is a business that banks and providers classify as elevated risk due to chargebacks, regulation or the niche's reputation.
KYC and KYB
KYC and KYB are the customer (Know Your Customer) and business (Know Your Business) checks a provider runs before onboarding a merchant.
MDR (merchant discount rate)
MDR (Merchant Discount Rate) is the percentage of each payment that a merchant pays the acquirer or provider for processing.
P2P payments
P2P payments mean accepting money as a transfer from the buyer's card or account to the details of an individual or agent instead of classic acquiring.
Payouts
Payouts are transfers from the merchant to customers, partners or itself: winnings, cashback, earnings, balance withdrawals.
PSP (payment service provider)
A PSP (Payment Service Provider) connects a merchant to one or more payment methods through a single contract and API.
Rolling reserve
A rolling reserve is a share of volume that the provider temporarily holds back as protection against chargebacks and refunds.
Settlement
Settlement is the transfer of funds for accepted payments to the merchant, minus fees, reserve and refunds.
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