Knowledge Base – Payments Terminology
Blog: Payments Terminology
As the payment industry becomes more widely acknowledged, the number of questions that arise about payments-related terms also naturally increase. In this blog, we will explain some of the most common jargon that is associated with payments. The topics that we will focus on include: “What is an E-wallet?”, “Omnichannel”, “Chargeback”, “Anti-Money Laundering (AML)”, “Anti-Terrorist Financing (ATF)”, “Near-Field Communication (NFC)”, “Point Of Sale (POS)”, “3D Secure (3DS)” and “Alternative Payment Method (APM)”.
Electronic wallet / E-wallet
Often referred to as digital wallet, these are electronic devices or online services that allows an individual to make electronic transactions. This can include purchasing items online with a computer or using a smartphone to purchase something at a brick and mortar store.
Omnichannel is a cross-channel content strategy that organizations use to improve their user experience. Rather than working in parallel, the consumer gets one seamless experience both online, across all devices and offline in the store.
A chargeback is the reversal of a prior outbound transfer of funds from a consumer’s bank account, line of credit, or credit card. The return of funds to a consumer is initiated by the issuing bank of the credit card (or other instrument) used a consumer to make a purchase. It’s common for a customer to dispute a charge when an item was damaged or was of poor quality. The customer may also dispute a charge when they encounter a purchase on their statement that isn’t recognised.
The Payments industry makes extensive use of abbreviations. We will discuss 5 popular abbreviations which are commonly used and oftentimes misunderstood.
APM Alternative payment method
“Alternative payment method”, these are all payment methods that you use that are not a credit card.
AML Anti Money Laundering & ATF Anti-Terrorist Financing/ CTF Counter-terrorist Financing
AML stands for “Anti-Money Laundering” and ATF is “Anti-Terrorist Financing” (also known as CTF “Counter-terrorist financing”).
Anti-money laundering refers to a set of procedures, laws and regulations designed to stop the practice of generating income through illegal actions. Anti-Terrorist Financing also refers to a set of procedures, laws and regulations, however these are designed to stop the illegal smuggling of cash to terrorist organisations. It is often closely linked with money laundering.
POS Point Of Sale
“Point Of Sale”. The place or point where a transaction takes place between a merchant and a customer when a product or service is purchased.
NFC Near Field communication
“Near-Field Communication” is used in combination with POS and is a set of communication protocols that enables two electronic devices, one of which is usually a portable device such as a smartphone, to establish communication which allows you to tap your card next to the machine instead of inserting it into the machine to make a purchase.
3DS 3d secure
3D Secure is an extra security layer for your credit card. The “3D” part is based on the 3 domain servers, the 3 parties that are involved in the 3D security process. These include the company from which the purchase is being made from, the acquiring bank and the card issuer.