Payment management is a complex field, but understanding its key terms is essential for any business looking to optimize its transactions and deliver a smooth customer experience. Here’s a glossary of the most important terms, explained in plain language:
1. Payment Players
Electronic Payment 💻: Any financial transaction conducted digitally, without physical exchange of money.
Payment Gateway 🌐: The bridge between a merchant’s website or app and the payment processor. It collects payment information and securely transmits it.
Payment Processor ⚙️: The brain of the payment system. It processes transactions, verifies available funds, and transfers money from the customer to the merchant.
Merchant 🛍️: The business that sells goods or services and receives the payment.
Customer 🧑🤝🧑: The person or business making the payment.
2. The Stages of a Transaction
Transaction 🔁: The exchange of value between a customer and a merchant, involving a payment and the receipt of goods or services.
Authorization 🚦: The payment processor’s validation that the customer has sufficient funds to complete the transaction.
Settlement 💸: The transfer of funds from the customer’s account to the merchant’s account, once the transaction is validated.
Refund ↩️: The return of funds to the customer in case of cancellation or product returns.
3. Costs and Security
Transaction Fees 💰: Commissions charged by payment processors and gateways for each transaction.
Exchange Rate 💱: The price of one currency relative to another, important for international transactions.
Security 🛡️: The protection of payment information against theft and fraud.
Fraud 🚫: Any illegal action intended to obtain funds or goods fraudulently.
Compliance ⚖️: Adherence to regulations and standards related to security and data protection, such as PCI DSS.
4. Protective Technologies
PCI DSS 🔒: A set of security standards for payment data, which merchants must comply with to protect their customers.
Tokenization 🗝️: The replacement of sensitive payment information with unique, random tokens, reducing the risk of fraud.
Encryption 🔐: The transformation of payment data into an incomprehensible code without the appropriate key, ensuring confidentiality.
5. Payment Trends
Digital Wallet 📱: A mobile app that stores payment information and allows online or in-store transactions.
Mobile Payment 📱: Payment through a smartphone or tablet, using mobile payment apps.
Contactless Payment 🫙: Payment made by simply tapping a card or mobile device on a payment terminal, without entering a PIN.
Understanding these terms will allow you to confidently navigate the world of payments and choose the solutions best suited to your business.