Reference

Fintech glossary A–Z

Short, sourced definitions of the payments, banking, lending, compliance and digital-asset terms beginners meet most often. Each entry links to the full explainer and to its primary sources.

#

3-D Secure Fraud & Security: 3-D Secure (3DS) is a card industry standard, now managed by EMVCo as EMV 3-D Secure, that lets the merchant and the card issuer exchange data during an online purchase so the issuer can authenticate the cardholder and approve the transaction. It helps prevent card-not-present fraud.

A

Acquirer Payments: An acquirer (or merchant acquirer) is the bank or licensed payment company that signs up a merchant to accept card payments, sends each payment request into the card network and later pays the merchant, minus fees that include interchange passed to the card issuer.
AML Regulation: AML stands for anti-money laundering: the laws, rules and controls that stop criminals disguising the illegal origin of their money. Banks and other firms must know their customers, monitor activity and report suspicious transactions to the authorities.
API Open Banking: An API (application programming interface) is a published set of rules that lets one software system ask another for data or actions in a fixed format. In open banking, approved apps use bank APIs to read data or start payments with your consent, holding a token instead of your password.
APR Lending: APR (annual percentage rate) is the cost of credit expressed as a yearly rate. It combines the interest rate with certain fees charged when the loan is made, such as origination charges, so you can compare loans on one number.

B

BNPL Lending: BNPL means buy now, pay later: a form of credit that lets you split a purchase into smaller instalments, usually interest-free. The classic plan is four payments, the first at checkout and the rest every two weeks. Late payments can bring fees.

C

CBDC Digital Assets: CBDC stands for central bank digital currency: a form of digital money, denominated in the national currency, that is a direct liability of the central bank. Retail CBDCs would be used by the public like digital cash; wholesale CBDCs are for banks. Most central banks are exploring one.
Chargeback Payments: A chargeback is when your card issuer reverses a card payment by pulling the money back from the merchant through the card network. Visa describes a dispute as a way for an issuer to return a contested transaction; if valid, the amount is taken from the merchant's account.
Credit score Lending: A credit score is a prediction of your credit behaviour, such as how likely you are to repay a loan on time, calculated from the information in your credit reports. In the US most scores range from 300 to 850; higher means lower risk.
Custodian in investing Wealthtech: A custodian is a financial institution that holds and safeguards investors' securities and cash. In the US, investment advisers with custody of client assets generally must keep them with a qualified custodian, such as a bank or registered broker-dealer, which sends account statements at least quarterly.

E

e-money Banking: E-money (electronic money) is digitally stored monetary value, a claim on the issuer, that is issued when you hand over funds so you can make payments, and that others accept. It must be redeemable at face value at any time, cannot earn interest and is safeguarded rather than deposit-insured.

I

IBAN Banking: An IBAN (International Bank Account Number) is a standard format for identifying a bank account, defined by ISO 13616, with Swift as its registration authority. It starts with a two-letter country code and two check digits, followed by the national account number of up to 30 characters.
Interchange Payments: Interchange is a fee paid on each card payment by the merchant's acquirer to the cardholder's issuer. Visa calls these interchange reimbursement fees, transfer fees between acquiring and issuing banks. Some laws cap it, such as the EU's 0.2% limit on consumer debit cards.

K

KYC Regulation: KYC stands for 'know your customer'. It is the process a financial firm uses to identify a customer, verify that identity and understand what the account will be used for, as anti-money laundering rules require.

N

Neobank Banking: A neobank is a company that offers retail banking services mainly through a smartphone app and website instead of branches. It is a marketing term, not a licence: some neobanks are licensed banks, while others are e-money firms or apps built on a partner bank.

O

Open banking Open Banking: Open banking means you can let regulated third-party apps read your bank account data or start payments from your account, with your explicit permission and through a secure bank API. The Basel Committee defines it as sharing customer-permissioned bank data with third parties to build services.

P

PSD2 Open Banking: PSD2 is the European Union's second Payment Services Directive, applying since 13 January 2018. It regulates payment initiation and account information services, requires strong customer authentication, and cuts a consumer's maximum loss on unauthorised payments to €50 in most cases.

R

Regtech Regulation: Regtech (regulatory technology) is the application of financial technology for regulatory and compliance requirements and reporting by regulated institutions, such as identity checks, transaction monitoring and regulatory reports.
Robo-advisor Wealthtech: A robo-advisor (US regulators write robo-adviser) is an automated digital investment advisory programme. It uses your answers to an online questionnaire about goals, time horizon and risk tolerance to build and manage a portfolio, typically as a registered investment adviser.

S

SCA Fraud & Security: SCA stands for strong customer authentication: a European and UK requirement that payment providers verify you with at least two independent elements, something you know, something you have and something you are, when you log in online or make an electronic payment.
Settlement Payments: Settlement is the step where money actually moves between the banks involved, so the payment is complete and final. Some systems settle each payment on its own at once, such as Fedwire Funds, whose transfers are final and irrevocable; others settle in batches, like ACH, four times a day.
Stablecoin Digital Assets: A stablecoin is a crypto-asset designed to keep a stable value against an official currency, usually the US dollar. A single company typically issues it, and its reserves and promise to redeem tokens back the peg. It is not a bank deposit; US law bars FDIC insurance.

T

Tokenization Fraud & Security: In payments, tokenization is a process that replaces the primary account number (PAN), your long card number, with a surrogate value called a token. Payment tokens can be restricted to a specific merchant, device or payment scenario, so a stolen token is worth far less than a stolen card number.