Issuer (card issuer) - is a bank that issued the buyer's card.



MPS or Card Network - an international payment system. Example: Visa, MasterCard, Discover, JCB, UnionPay, etc.


Alternative Payment Methods (APM) - alternative payment methods. Example: PayPal, Sofort, Ideal, USSD, and others.

  • ACH is an alternative payment method in the USA - online transfers.
  • PSP - Payment Service Provider - a provider that accepts payments.
  • SEPA - Single Euro Payments Area, bank transfers in EUR within EEA. 


Processing Center (PC) - a processing centre that processes information about transactions and sends them for further passage to the MPS network. They are responsible purely for the technique. To work, you need a mainframe with access to the MPS network.


Rolling reserve - the reserve of the acquiring bank, which is accrued as a percentage of profit from the previous period. The bank keeps this money with itself to cover risks for a certain period of 120-180 days, and calculations are shifted every day by day.


Gateway - is a technical payment provider that has communication and integration with the processing center.


Merchant Category Code (MCC) - code that describes the merchant/merchant industry.


Descriptor - information that is displayed in the client's bank statement about the completed transaction. There are two types:


Local acquiring - an operation when the acquiring bank and the issuer are located in the same country. Using local acquiring increases the success rate of payments.


Chargeback -  is a procedure for disputing a transaction by the issuing bank (from the client's side), in which the payment amount is debited from the recipient and returned to the payer.


Fraud - a card fraud aimed at the illegal use of money from her account. There are several types:


  • Friendly fraud - real cardholders make purchases and then demand a refund from the bank;
  • Phishing is a scam aimed at obtaining confidential data (often mailings with fake websites);
  • Skimming - stealing information about card data using a skimmer - a device made in the form of an overlay on an ATM card reader.


Liability shift - is a transfer of responsibility from the merchant (acquiring bank) to the issuing bank for the transaction. Reduces the likelihood of receiving fraudulent chargebacks. A liability shift can be obtained when conducting a transaction using a 3D protocol or a DSRP transaction (Apple / Google Pay).


3-D Secure - is a method of verification when making a payment (reduces fraud and traffic) — shifts responsibility for fraud to the bank that issued the buyer's card. For example, SMS code.


AVS verification - verification of the client's residential address information with the issuing bank's data. It is used as one of the tools for preventing card fraud.


CVV verification - verification of the 3-character (AMEX - 4 characters) code entered by the client with its true value. It is used as one of the tools for combating fraud.


Decline code - an error code during a transaction.


Fraud alerts - TC-40 (Visa) and Safe (MasterCard) - notification that a particular transaction has been reported as fraudulent. In this case, the chargeback may not be issued.


Chargeback rate - is the norm/limit of the international payment system for the level of chargebacks (example: no more than 100 and 0.9% chargebacks from Visa, Mastercard).


BIN - the first six digits of the card (in the future 8), which can be used to determine the card's payment system, bank, country, card brand, and other characteristics. Extremely important information.


Card Type - types of cards:

  • Debit cards;
  • Credit cards;
  • Prepaid cards - can be anonymous and not anonymous.


Types of transactions:

  • SALE (Approved) - withdrawal of funds;
  • REFUND - refund transaction;
  • AUTH - freezing funds on the buyer's card;
  • SETTLE (Capture)Authorization capture (settle) takes place after a payment authorization. It’s when the authorized money is transferred from the customer’s account to a merchant’s account. So, in short, the transaction amount doesn’t reach the merchant account until the funds are captured. Read on to learn the details.
  • VOID - cancel the authorization, unfreezing funds back to a customer;
  • DECLINE - transaction received a decline for some reason


Transaction types:

  • 1st - the first card transaction with CVV input.
  • Token payment - a transaction on a previously tokenized card, there are the following types:
  • 1-click - customer-initiated one-click payment.
  • Recurring - merchant-initiated regular subscription write-off.
  • Installment - merchant-initiated credit / installment write-off.


Tokenization - saving card data for further payments (there are restrictions on what can be stored, for example, you cannot save a CVV code).


Host-to-host integration - the business on its side collects and stores card data, which is then sent to the PSP or Gateway for the operation. Requires PCI DSS. 


Solid Payment Form (iframe integration) - a business embeds a payment form or widget on its website/application. Thus, the merchant is not responsible for collecting and storing card data and does not need to be PCI DSS compliant.


PCI-DSS - is a payment card industry data security standard developed by the Payment Card Industry Security Standards Council (PCI SSC), established by the international payment systems Visa, MasterCard, American Express, JCB, and Discover. The standard is a set of 12 detailed requirements for ensuring the security of data on payment cardholders that are transmitted, stored, and processed in the information infrastructures of organizations. Taking appropriate measures to ensure compliance with the standard's requirements implies an integrated approach to ensuring the information security of payment card data.


Algorithm Luna - an algorithm for calculating the check digit of a plastic card number. It is used to validate the card number in many payment systems. However, some payment systems ignore the algorithm.