Payments & Compliance Glossary | Shuttle

Plain-language definitions for the payment processing, compliance, and fintech terms you'll encounter when building or managing payment infrastructure.

3

3D Secure 3D Secure is an authentication protocol that adds a verification step during online card payments, reducing fraud and shifting chargeback liability from the merchant to the card issuer.

A

AML (Anti-Money Laundering) AML (Anti-Money Laundering) refers to the laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income through the financial system.

C

Capture Capture is the step in payment processing where a previously authorised transaction is finalised and funds are submitted for settlement.

Chargeback A chargeback is a forced reversal of a payment transaction, initiated by the cardholder's bank, that returns funds to the customer and debits the merchant.

D

DTMF (Dual-Tone Multi-Frequency) DTMF is the signalling system that generates tones when a caller presses keys on a telephone keypad, widely used in secure voice payment systems to capture card details without exposing them to agents.

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Embedded Payments Embedded payments integrate payment processing directly into a software platform's user experience, allowing end users to pay without leaving the application.

I

IVR (Interactive Voice Response) IVR is a telephony technology that allows callers to interact with an automated system using voice commands or keypad inputs to navigate menus, retrieve information, or complete transactions.

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KYC (Know Your Customer) KYC (Know Your Customer) is the process of verifying the identity of customers and assessing their risk profile before and during a business relationship, required by financial regulations worldwide.

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Merchant Onboarding Merchant onboarding is the process of registering, verifying, and activating a new business to accept payments through a platform, acquirer, or payment processor.

Multi-PSP Multi-PSP is a payment strategy where a business connects to multiple payment service providers to optimise authorisation rates, expand geographic coverage, and reduce dependency on any single processor.

P

Payment Facilitator (PayFac) A Payment Facilitator (PayFac) is a company that onboards and underwrites sub-merchants under its own master merchant account, enabling platforms and marketplaces to offer payment acceptance without each merchant needing their own acquiring relationship.

Payment Gateway A payment gateway is the technology that securely captures and transmits payment data from the customer to the payment processor for authorisation, acting as the digital equivalent of a point-of-sale terminal.

Payment Layer A payment layer is the abstraction between a platform's application and the underlying payment service providers, enabling unified payment processing without direct PSP integrations.

Payment Links Payment links are unique URLs that direct a customer to a hosted checkout page where they can complete a payment without the merchant needing a website or integrated checkout.

Payment Monetization Payment monetization is the strategy of generating revenue from payment transactions processed through a platform, typically by charging fees or earning margin on each transaction.

Payment Orchestration Payment orchestration is the practice of routing transactions across multiple payment service providers through a single integration layer to optimise authorisation rates, reduce costs, and increase resilience.

Payment Processor A payment processor is the entity that handles the technical routing and communication of payment transactions between merchants, card networks, and banks to authorise and settle funds.

PCI DSS PCI DSS (Payment Card Industry Data Security Standard) is the global security standard that governs how organisations store, process, and transmit cardholder data.

PCI DSS Level 1 PCI DSS Level 1 is the highest tier of PCI compliance, required for organisations processing over six million card transactions annually and validated through an on-site audit by a Qualified Security Assessor.

PCI Scope PCI scope defines which systems, people, and processes within an organisation are subject to PCI DSS requirements because they store, process, or transmit cardholder data.

Platform Payments Platform payments refers to the payment infrastructure and flows that enable a software platform to process, manage, and monetise transactions on behalf of its users or merchants.

Pre-Authorization Pre-authorization is a payment request that verifies a cardholder's funds and places a temporary hold without immediately capturing the payment.

PSP (Payment Service Provider) A PSP (Payment Service Provider) is a company that enables merchants to accept electronic payments by connecting them to payment networks, handling transaction processing, and managing settlement.

PSP-Neutral PSP-neutral describes a payment infrastructure approach that is not tied to any single payment service provider, allowing businesses to connect to multiple PSPs through one integration.

R

Reconciliation Reconciliation is the process of matching payment transaction records against bank deposits and processor reports to ensure every payment is accounted for.

Refund A refund is a merchant-initiated reversal that returns funds from a settled payment transaction back to the cardholder's account.

S

SCA (Strong Customer Authentication) Strong Customer Authentication (SCA) is a European regulatory requirement under PSD2 that mandates multi-factor authentication for most electronic payments to reduce fraud.

Settlement Settlement is the process by which funds from a completed payment transaction are transferred from the acquiring bank to the merchant's bank account.

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Tokenization Tokenization replaces sensitive payment card data with a non-sensitive substitute token, reducing security risk and PCI scope for organisations that process payments.

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Voice Payments Voice payments are transactions initiated and completed over a telephone call, either through an agent-assisted interaction or an automated IVR system.

Void A void cancels a payment transaction after authorisation but before settlement, releasing the held funds back to the cardholder without incurring processing fees.

W

White-Label Payments White-label payments allow a platform to offer branded payment processing to its users by reselling or embedding another company's payment infrastructure under its own brand.

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