Glossary

Payment terms, explained simply

The words you’ll hear when you start accepting card payments — in plain English.

Acquiring bank: The bank that receives card payments on behalf of a business and deposits the funds into the business’s bank account.
Authorization: The real-time check where the customer’s card issuer approves or declines a payment.

Chargeback: A payment reversed by the customer’s bank after the customer disputes the charge.
Chargeback ratio: The number of chargebacks divided by the number of transactions in a period. High ratios can put a business’s processing at risk.
Checkout page: A secure web page where customers enter their card details to complete a purchase.
CVV / CVC: The three- or four-digit security code on a card, used to help confirm the cardholder has the card.

Decline: A payment the card issuer refuses to approve, for example because of insufficient funds or suspected fraud.

High-risk business: A business in an industry the card networks and banks consider more likely to see chargebacks or fraud, such as nutra, travel or MLM.

KYC (Know Your Customer): The identity and business checks a payment provider carries out before approving an account.

Payment gateway: The technology that securely sends card details from a checkout to the payment processor.
Payment link: A shareable URL that takes a customer straight to a checkout page for a set amount.
Payment processor: The company that handles card transactions — routing them for authorization and settling funds to the business.
PCI DSS: The Payment Card Industry Data Security Standard — security rules for any organization that handles card data.

Refund: Money returned to a customer’s card by the business, usually for a return or cancelled order.
Rolling reserve: A percentage of sales held back for a set period to cover possible chargebacks, common for high-risk businesses.

Settlement: The transfer of approved card payments, minus fees, into the business’s bank account.

Underwriting: The review of a business’s documents and risk profile before it is approved to accept card payments.

Virtual terminal: A browser-based tool for typing in card details to take payments by phone or email.

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