Both networks provide glossaries which mention network (scheme) specific terminology as well as more general industry terms.

The Mastercard glossary can be found here, and the Visa glossary is here.

For a summary of more general and regularly used terms please see below:

3D Secure (3DS) Created by Visa and MasterCard, 3D Secure also referred to as 3DS is a technical standard that adds a layer of security in online credit and debit card transactions.Different card networks developed their own 3D Secure transaction products:

• MasterCard SecureCode

• Verified by Visa

Acquirer The card acquirer is a member of a card network (scheme) that enters into an agreement with a merchant and maintains its account to accept payments. As such, it acts as an intermediary between the merchant and the international payment systems. The card acquirer enables merchants to accept card payments. Also, one of the four in the four-party model.

Agency Banking /Digital Banking / banking light An agency banking partner is a third-party which carries out certain banking services on behalf of a non-banking entity. They can usually provide BACs, Faster Payments, and Direct Debits that their clients can then in turn provide to their end customers.

AML Anti-Money Laundering, AML, is the term used to describe the tools and techniques to prevent criminals from depositing their illicit funds into the financial system. AML tools will analyse habits and transactions to spot where money laundering is occurring and further review these risky transactions.

API APIs are application programming interfaces, a set of instructions and tools that enable software developers to create applications that can interact with another company’s systems. For example, by connecting to a bank’s API, a fintech startup could develop a mobile phone app that moves money in and out from the accounts of a bank’s customers, or simply lets them check their balance.

Authorisation A key part of the card transaction flow. When a customer attempts to use their card to purchase goods or services, the merchant’s acquirer requests authorisation for the transaction from the customer’s bank or issuer processor. This involves a number of steps including the bank/processor verifying the validity of the payment, checking funds and performing fraud checks on the merchant and transaction itself.

BACS (Bankers’ Automated Clearing System) One of the traditional UK payments schemes used for bulk, high volume, regular retail payments and with T+2 day settlement.

Bank Identification Number (BIN) The term bank identification number (BIN) refers to the initial set of four to six numbers that appear on a payment card. This set of numbers identifies the institution that issues the card (regulated issuer) and is key in the process of matching transactions to the issuer of the card.

Basis points (bps) A common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01%.

BIN Range A BIN’s digits or ‘range’ allow issuers to separate a BIN for the country and currency allocation and identifies a company issuing a card or a specific product.

BNPL (Buy Now, Pay Later) Short term, Point of Sale credit arrangement allowing customers to spread the cost of a single payment across a number of weeks or months.

Card Fulfillment This term refers to the physical creation and provision of physical cards. The organisation is often referred to as a card fulfilment bureau, and they are responsible for providing the physical cards (with chip profiles defined to coincide with scheme and regulatory requirements based on the card type – credit, debit or prepaid) and sending these to customers. Card design is another key area of focus, again in line with network/scheme requirements.Examples include Idemia and Tagnitecrest.

Card Network/Card Scheme The terms network and scheme are interchangeable depending on where in the world you happen to be. The US refer to networks – The UK and Europe tend to refer to a card scheme. The role of a card network (scheme) is to facilitate transactions between merchants and card issuers. To do this, card networks create virtual payment infrastructures and charge merchants interchange fees for processing consumers’ card transactions. The card network pays the acquiring bank and the acquiring processor their respective percentages from the remaining funds. The acquiring bank credits the merchant’s account for cardholder purchases, less a “merchant discount rate.” The issuing bank posts the transaction information to the cardholder’s account.

Card PIN Personal Identification Number or PIN which is usually 4 digits used to secure a customer’s card to ensure that only they are able make payments using that card at merchants requiring chip and pin

Card Programme The term that covers all elements encompassing a card product. From licensing to scheme membership, marketing to card launch, operational activities, strategy and profitability.

Card Programme Manager The entity that manages all the parts of the card programme including strategy, arrangements with vendors and schemes, understanding of the route to profitability, marketing strategy and all of the other key relationships. For card programmes that have underlying accounts and are created with and issuing bank, the programme manager will also understand and map out the structure of the profit centre and the store of value (where actual monies are held in a ledger).

Card Verification Value/Card Verification Code (CVV/CVC & CVV2/CVC2) A verification value usually on the back of physical cards (and usually displayed on the back of virtual cards as well for consistency). Whilst Card Numbers and Expiry dates are allowed to be stored by merchants to allow a more seamless purchase journey for returning customers, CVC2/CVV2 is unique to the card and used to further verify the customer during a purchase. The key difference between CVV1/CVC1 & CVV2/CVC2 is that the 1st iteration of verification numbers were embedded as part magstripe along with the card number and expiry which meant that fraudsters could steal all the magstripe data and imprint duplicate cards using this complete profile of your card.Now the more prevalent usage, especially in european countries, is to use Chip and PIN/contactless for in-person transactions and Card Details + CVC2 for online purchases. The addition of a PIN only known to the cardholder therefore acts as an additional layer of security.NOTE: For VISA/MasterCard CVC2 is 3 digits and for American Express is 4 digits.

Cardholder Person the card is issued to from the issuer. Also known as the customer and is the person who applied for, funds and makes transactions using the card. Also, one of the four in the four-party model

CHAPS (Clearing House Automated Payment System) Another of the traditional UK payments schemes used for same day transfers of large, valuable payments with no upper limit. Used for things like house purchases and other large, high value transactions.

Chargeback Where funds are returned to the payment card and sometimes through a dispute resolution process. The most common chargeback case is where goods are returned and the merchant initiates a chargeback which refunds the customer in the amount originally paid for the goods. Customer initiated chargebacks are often for unrecognised payments (sometimes fraudulent) or for goods or services not received.

Chip and PIN/EMV Chip and PIN refers to the combination of the EMV Microprocessor Chip embedded within the card and the PIN used to allow the chip to transfer information and transact at merchants. EMV is short for Europay, MasterCard, Visa who were the founders of the EMV technology back in 1994.

Clearing The process of exchanging financial transaction details between an acquirer and an issuer to facilitate posting of a cardholder’s account and reconciliation of a customer’s settlement position.

Cross-Border Payments Transactions where the initiation of the transaction and the recipient of that payment are in different countries. These can be between people, companies or financial institutions.

E-Money Article 2(2) of Directive 2009/110/E : “electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transaction, and which is accepted by a natural or legal person other than the electronic money issuer”.Prepaid cards are a good use case example for e-money storage. There is no underlying bank account associated with the card, and when you top up a prepaid card the funds are represented as an amount you have available to spend

E-Money Directive (EMD/EMD2) The legislation that regulations e-money activities and payment services in the EU to provide more service electronic money services and encourage more competition

E-Money Institute Financial institutes authorised to provide e-money services (providing they have an e-money licence.

E-Money Licence A licence required by EMIs which allows them to issue and redeem electronic money.

EMD Agent An agent of an E-Money Institute. Delegated authority to provide the same services as the partner institute and operating under their E-Money Licence

Faster Payments A relatively new (since 2008) bank payments scheme which is a 24/7 real time system for low-value payments up to 250k.

Fintech The aggregation of the words ‘Financial’ & ‘Technology’. The term Fintech broadly covers technology that improves access, automation or delivery of financial services. Things that fall under this broad spectrum include cryptocurrency, digital banks, financial data aggregation, embedded finance, POS lending, data focussed credit agencies and many more…

Four-Party-Model The online payment network is often called the Four Party model (even though there are more parties involved). The Four Party model covers the entities involved in a transaction. The model includes the Cardholder, Merchant, Issuing bank and Acquiring bank, but forgets the network (scheme).

IBAN International Bank Account Number used to make and receive payments across countries. It’s usually a combination of the account number and sort code as well as additional characters that make it unique.

Interchange The percentage of each transaction paid by the Acquiring Bank (who the merchant banks with) to the Issuing bank (who issued the card to the customer). Interchange is paid to the Issuing bank to cover the risks and costs they incur during the card payment process like fraud checks and transaction authorisations.

Issuer The issuer, or issuing bank, is the cardholder’s bank, which is a regulated entity.When a consumer makes a purchase with their card for a product or service from a merchant, this information is passed to the acquirer which then references the relevant card scheme and the issuer to collect funds. The issuing bank is the intermediary between cardholders, card schemes, and acquirers. The information sent from the issuer determines whether the payment from the customer is accepted or not. Also, one of the four in the four-party model.

Issuer processor Marqeta is an issuer processor. The technology layer that sits between the Card network and the Issuing Bank/Banking platform/Card Programme. The issuer processor provides a number of key component capabilities such as Card Issuance, Payment Processing, Authorisation stand in, processing of clearing and settlement files from networks and is the technical gateway into the card payment flow.

Just-in-time funding Standard functionality of the Marqeta offering that allows you to automatically fund a card in real time during the transaction process. This means that customers don’t have to retain large amounts of cash on the card and can retain a zero balance but still use the card for payments. Cards always have a zero balance until a transaction is authorised and funds move as part of the e-money flow.

Know Your Client/Customer (KYC) A process to ensure businesses identify and verify the identity of their clients, for anti-money laundering (AML) purposes.

Magstripe The strip of magnetic tape on the back of cards that stores card information and is captured when swiping or dipping at a merchant terminal.

Merchant The traditional definition of a merchant is a “person or company involved in wholesale trade”. In the card ecosystem the merchant is just the person or organisation where you use your card to transact in either goods or services. Also, one of the four in the four-party model

Merchant Service Charge (MSC) The charge that the Merchant pays, usually a minimum fee as well as a per transaction percentage charge on debit and credit transactions.

Mobile/ Digital wallet A mobile or digital wallet is a way to carry your credit card or debit card information in a digital form on your mobile device. Instead of using your physical plastic card to make purchases, you can pay with your smartphone, tablet, or smartwatch. This can be either using cryptocurrency or real money which is often pre-loaded onto a digital account.In theory, it is safer to use than a physical credit or debit card as the owner does not need to reveal their account number at point of purchase, and even if someone was able to intercept the transmitted encrypted information, they could not re-use it to authorise further payments. Examples include GooglePay, Apple pay and Samsung Pay

Near field communication (NFC) This is the technology behind digital wallets, tap to pay cards and tapping a debit card vs an Oyster card to pay for the tube. It is a set of communication protocols that enable two electronic devices, one of which is usually a portable device such as a smartphone, to establish communication by bringing them within 4 cm (2 in) of each other.

Neo/Digital Bank Neobanks are digital banks who operate entirely online and have no physical branches and are often app based. Starling, Monzo and Revolut are notable neo/digital banks in the UK.

Networks/Schemes A card network sets the terms of card transactions as well as transfers payments between cardholders, merchants, and their respective banks. When a cardholder uses their card to make a purchase they are requesting that their card issuer pay the merchant. But that payment first has to go through a card network (scheme).The networks pass information between the merchant’s acquiring bank and a card issuer (the financial institution that issued a card on behalf of a network like Mastercard or Visa) to decide whether or not to facilitate the purchase.

Open banking A term used to refer to the use of open APIs by banks to enable third party software developers to create applications and software using the bank’s data. Open Banking gives customers access to their banking data via third-parties so they can view account information and initiate payments.

PCI-DSS Compliance Payment Card Industry Data Security Standard is the set of 12 requirements that helps enforce the security of cardholder information and reduce fraud. Adherence to the standard is applicable for any stakeholders in the payment process handling card information and is governed by the Payment Card Industry Security Standards Council.

Physical card A physical card is typically made of plastic, although metal and wood have seen a recent uptake in demand and contains an electronic chip that is ready by card readers and ATMs. The card often features the company branding as well as the name of the cardholder, PAN, CVV, date of expiry and a signature strip. Some physical cards are contactless enabled.

POS POS or Point-of-Sale traditionally refers to the physical location the card payment was made. Historically this was at the physical merchant terminal using swipe, chip & PIN or contactless but POS also covers online payment portals at e-commerce sites.

Primary Account Number (PAN)/Card Number 14,15 or 16 digit number on a payment card that’s commonly referred to as the Card Number. This is the number that uniquely identifies the card and is often embossed on physical cards.

Principal Member A Principal Member is a financial institution that directly participates as an issuing and/or acquiring member of the Mastercard or Visa networks/schemes. The process to apply for principal membership is described in The Licensing Question section.

Processor (acquirer processor, payment processor) An organisation that provides payment processing services such as Authorisation, Settlement and clearing. They, like the Issuer Processor, will be connected to the networks.

PSD2 Second Payment Services Directive OR Revised Payment Services directive is an EU regulation designed to contribute to a more integrated and efficient European payments market, make payments safer, increase the consumers’ protection and foster innovation and competition while ensuring a level playing field for all players, including new ones. It’s given rise to an Open Banking ecosystem in Europe.

SEPA (Single Euro Payments Area) An EU payments initiative aiming to make Eurozone payments easy and cheap by creating a single market for EURO denominated payments. A big step in achieving this goal is the creation of 3 SEPA payments schemes: SEPA Direct Debit (SDD), SEPA Credit Transfer (SCT), SEPA Cards Framework (SCF)

Settlement The process by which the network (scheme) facilitates the exchange of funds on behalf of issuers and acquirers. Clearing is a prerequisite for settlement.

Tokenisation Tokenisation is the process of turning a meaningful piece of data, such as an account number or card number (PAN) into a random string of characters called a token that has no meaningful value if breached. Tokens serve as reference to the original data, but cannot be used to guess those values. The tokenisation process is used when converting card data for use in digital wallets, such as apple pay.

Transaction Monitoring The process of regularly monitoring transactions to ensure compliance with anti-money laundering legislation and spot fraudulent activity on a card or account

Underbanked/unbanked People or businesses that have little or no access to mainstream financial services. The World Bank estimates that there are 2 billion adults worldwide without access to formal financial services.

Unicorn A privately held company with a valuation of over $1billion. A Fintech Unicorn is just a unicorn in the Fintech industry i.e Starling Bank

Virtual card A ‘virtual’ version of a physical card. Essentially a digitally stored card number, expiry and CVV that is usually secured on a customers mobile app or online portal. Works the same way as a physical card except it’s unable to be used in Chip and Pin devices but can still be used for contactless payments when tokenised. Beneficial as new card numbers can be used at potentially risky merchants therefore protecting the funds stored on account.

Vpay VPay is a Single Euro Payments Area (SEPA) debit card for use in Europe, issued by Visa Europe. It uses the EMV Chip and PIN system and may be co-branded with various national debit card schemes such as the German Girocard or Italy’s PagoBancomat. The VPay card system competes with Mastercard’s Maestro debit card product.