Glossary
Plain-English definitions of common card payment and payment processing terms.
Account updater
A service provided by card networks that automatically refreshes stored card details when a customer’s card is replaced or expires. This helps reduce failed recurring or repeat payments.
Acquirer (acquiring bank)
A financial institution authorised to process card payments on behalf of a business. The acquirer routes transactions for authorisation and settlement, then deposits funds into the merchant’s account.
Acquirer net revenue
The portion of transaction fees retained by the acquiring bank after interchange and scheme fees are paid. This covers operating costs and profit margin.
Acquirer markup
The additional fee charged by the acquirer/processor on top of interchange and scheme fees. The markup can vary depending on pricing model, transaction volume, and risk profile.
Acquirer Reference Number (ARN)
A unique reference that helps banks and providers track a card payment end-to-end. It’s commonly used when investigating settlement issues or disputes.
Address Verification System (AVS)
A fraud check that compares the billing address details entered at checkout with those held by the card issuer. Used mainly for card-not-present payments.
Application Programming Interface (API)
A technical connection that allows a website, app, or EPOS platform to send payment requests to a gateway or processor and receive responses (approved/declined, tokens, refunds, etc.).
Authorisation
The step where the cardholder’s issuing bank approves or declines a transaction based on available funds, card status, and risk checks.
Batch
A group of authorised transactions submitted together for settlement, often at the end of the trading day.
Blended pricing
A pricing model where a single rate applies to most card transactions. Simple to understand, but can be less transparent than interchange-plus pricing for higher-volume merchants.
Chargeback
A reversal raised by a cardholder through their bank. Chargebacks can relate to fraud, disputes over goods or services, processing errors, or unrecognised transactions.
EPOS
Electronic Point of Sale systems combine hardware and software to manage sales and often integrate directly with payment terminals, stock, and reporting.
Payment gateway
Software that securely transmits payment data between your checkout/website and the payment processor. Gateways often support tools like tokenisation, fraud filters, and 3-D Secure.
Interchange
A fee paid to the card issuer for processing the transaction. Interchange varies by card type, how the payment is accepted (in-person vs online), and other risk factors.
PCI DSS
A global security standard designed to protect cardholder data. Businesses that accept card payments must meet relevant PCI requirements for their setup.
Tokenisation
A security process that replaces sensitive card data with a unique token, reducing exposure if systems are compromised and simplifying repeat payments.