Payments Glossary
Understand the merchant industry with our payments glossary, with clear definitions of key terms and technologies.
C
Card Machine / Terminal
A device used to process card payments in-store. Mobile models like the PAX A920 offer portability and features like Wi-Fi and touchscreen operation.
Chargeback
A reversal of a card transaction initiated by the cardholder’s bank. Often occurs when a customer disputes a charge or claims fraud.
Contactless Payments
Payments made by tapping a card or device (e.g., smartphone) against a reader without entering a PIN. Increases speed and convenience at checkout.
E
Ecommerce Gateway
A secure online platform that allows businesses to accept card payments via their website. It encrypts data to protect customer information during transactions.
EPOS (Electronic Point of Sale)
A system that combines hardware (like tills and scanners) with software to process sales, track inventory, and manage transactions efficiently.
I
Interchange Fee
A fee paid by the merchant’s bank to the customer’s bank for processing card transactions. It’s built into the total processing cost.
M
Merchant Account
A type of bank account that temporarily holds funds from card transactions before they’re transferred to the business’s main account.
Merchant Services
A bundle of services and equipment (like terminals, accounts, and software) that enables businesses to accept card and digital payments.
N
Next-Day Funding
A service where funds from card payments are transferred to the business’s account by the next working day, improving cash flow.
P
PCI Compliance (Payment Card Industry Compliance)
A set of security standards (PCI DSS) that businesses must follow to protect cardholder data. Non-compliance can lead to fines and security risks.
Payment Gateway
A tool that securely transfers payment information between the customer, the business, and their banks—used in online, mobile, and virtual terminals.
Payment Processor
A company that handles the transaction between the customer’s and merchant’s bank. They ensure payments are approved and completed.
Portable Terminal
A wireless card machine that can be moved around a venue – ideal for restaurants, bars, and shops needing flexibility.
POS (Point of Sale)
The place where a customer completes their purchase. A POS system may include a terminal, till, barcode scanner, and software.
Processing Fees
The charges applied by providers for each card transaction. These may vary based on transaction type, card type, and provider.
S
Settlement Time
The time it takes for funds from a card transaction to appear in the merchant’s bank account. Can range from next day to several days.
T
Transaction Fee
A per-transaction charge applied by your provider for each payment processed.
V
Virtual Terminal
A browser-based tool that allows businesses to take payments over the phone or by mail order by manually entering card details.