Explore our comprehensive finance dictionary to learn the key terms and definitions used in the financial industry. From banking to investments and insurance, our finance glossary covers it all. Stay informed and up-to-date with the latest financial jargon.
Aadhar Verification
Service offered by payment service providers that allow businesses and governmental organisations to verify the Aadhar identity of their customers, vendors, partners, and so on.
Account Aggregator
An RBI entity and a financial data sharing system that includes various customer account information like bank accounts, insurance accounts, business accounts, etc.
Authentication
The first step in the process of credit card payments is where the card is authenticated with an OTP validation.
Authorisation
The second step in credit card processing is where the transaction is authorised based on balances and risks.
Average Order Value
An E-Commerce metric that helps businesses determine the amount of money spent by an average customer. It can be calculated by dividing the total revenue by the number of customers.
Bank Account Verification
A verification suite feature that allows businesses to verify if a bank account exists.
Bank downtime
A period of time when bank systems are not in working condition leading to transaction failure.
Banking As A Service
Relatively a new term in the fintech space which allows businesses to offer banking services on their own platform without getting a banking license. Through BaaS, businesses can offer customer account creation services, lending services, card issuance systems, and more.
BIN
The abbreviation of the bank identification number is usually the first 6 digits of the card number. It is assigned by the card scheme to all of its member banks, financial Institutions, and processors.
Borrower KYC
The entire process of verifying the identity of the loan borrower by a business.
Bulk Payment
An alternative term for payouts that allows any business, individual, or institution to disburse funds to multiple beneficiaries at the same time.
Buy Now Pay Later
A payment system that allows customers to purchase a product or service and pay for the same in installments without any EMI. It helps in increasing the average order value and revenue for a company.
Capture
The last step in the card transaction process is were the funds are captured or settled into the beneficiary’s account.
Card Not Present (Cnp)
A transaction that is done remotely by the card user. More often than not, it is an online transaction and has a higher merchant discount rate compared to card-present transactions.
Credit Card
Credit cards work on a credit line issued by the bank. There is a limited spend limit and the customer is obliged to repay the spent amount after a predetermined period of time.
Debit card
Customers make purchases out of the available funds in their bank account.
Card Present (CP)
Transactions wherein the cards are present at the point of sale physically.
Card Tokenization
The process of replacing sensitive card information with a random cryptographic string.
CVV
The abbreviated form of Card Verification Value, it is the three or four-digit number at the back of the card which is used for transactions.
Cash On Delivery
When a customer uses cash instead of online payment methods to pay for any goods or delivery services, it is considered a cash-on-delivery transaction.
Chargeback
A chargeback is when a customer or credit card holder raises a dispute for any transaction done with a business. the business can choose to defend the chargeback or the amount is accorded back to the customer.
Checkout Page
Check out page is the webpage(s) that a customer encounters while making a purchase from an online store.
Co-Branded Cards
Another popular use case of Banking as a service that allows businesses to issue co-branded cards to their customers, vendors, partners, or students for loyalty and rewards, payroll, expense management, and more.
Co-lending
When two or more lenders collaborate to extend credit to their target audience
Contactless Payments
Payments that do not require physical contact between the recipient and the customer. Contactless payments have been made possible through fintech revolutions like card swiping, UPI, net banking, and more.
Corporate Credit Card
Credit card issued by companies to specific employees for business-related transactions.
Credit Card Processing System
Step-by-step process of a credit card transaction.
Credit Line
A facility provided by the bank to a customer that allows them to avail credit up to a certain point.
Current Account
A current account usually refers to a business bank account wherein you can deposit or withdraw money without prior notice.
Customise Check Out
It allows businesses to customise their checkout page to look like their website or mobile application.
Customizable API
An alternative to custom process actions, customizable API offers a no-code solution to include custom messages.
Dashboard
Centralised control panel that allows businesses/merchants to have a look at all of that transactions, refunds, settlements, and so on. This service is usually provided by a payment gateway provider.
Digitizing Business Kyc
Digitizing business KYC refers to the process of making all verification services online this could be done through OCR technology or verifying the information with a government database. Some examples are Aadhar verification, PAN card verification, etc.
Disbursal
Disbursal is another term for bulk payments or payouts. Any business or organisation needs to do disbursals on a regular basis in terms of employee salaries, customer refunds, partner commissions, etc.
Dynamic Routing
Smart transaction routing among multiple banks leads to a higher transaction success rate.
E Mandate
The underlying infrastructure created by RBI and NPCI makes recurring billing possible for businesses.
E-Rupi
A leakage-free voucher system created by RBI and NPCI that enables direct benefit transfers. For instance, the e-Rupi can be used to disburse pensions to retired individuals.
Easy Split
A marketplace settlement solution offered by Cashfree Payments that allows businesses to disburse commissions to their partners and vendors in a hassle-free manner.
E-KYC
Another term for online KYC ( know your customer). It helps verify the identity of individuals and businesses.
ePOS
Electronic point of sale that allows businesses to accept customer payments through virtual mediums using new-age digital payment methods like cards, UPI, QR scans, payment links, and more.
Escrow Account
An escrow account is an intermediary account or safe house for funds and assets when the transaction is still ongoing. NBFCs , fintech, and other lending service providers can use escrow accounts to pool funds before disbursing to customers.
Expense Management
Expense Management is the process of receiving, verifying approving, and then disbursing funds for business-related employee expenses.
FIRC
FIRC is the abbreviated form of a foreign inward remittance certificate. It basically acts as proof for any foreign Currency received by an individual or business in India.
Flexible Repayment
Flexible repayment is usually associated with BNPL. It allows businesses to offer flexible repayment options to the customer for any product or service.
Global Payouts
A global payout system allows businesses to disburse funds in another country whether it be to employees, freelancers or service providers, etc
Gross Transaction Value
Gross transaction value or gross Merchandise value is the total value of the transactions processed.
GST IN Verification
Another feature under the verification suite that allows businesses to verify the GST Details for quick KYC and onboarding.
Hosted Payment Gateway
The payment gateway page allows businesses to redirect the customer to the payment service provider’s site while making a transaction. Once the transaction is successfully and securely completed, the customer is redirected to the merchant’s website.
Identity Verification
Identify verification is the process of cross-checking the identity of an individual or a business entity.
IMPS
Immediate Payment Services (IMPS) allows any individual to do bank-to-bank transfers in real time.
NEFT
National Electronic Fund Transfer (NEFT) is an interbank transfer service managed by RBI and works in 30-minute batches.
RTGS
Real Time Gross Settlement (RTGS) is an interbank transfer service that allows for transferS above 2 lakhs.
Income Tax Act 1961
Government regulation imposes a penalty of 10000 Rupees if anyone has given an incorrect PAN number. Pan verification allows businesses to avoid such penalties.
Instant Refund
Instant refund is a service offered by payment service providers that allow businesses to disburse refunds in real-time in case the order is canceled by the customer. Businesses can choose to do partial or full refunds.
Instant Settlement
Another service is offered by payment service providers wherein merchants can get access to their customer payments and settle it into their business accounts within 15 minutes. This allows businesses to eliminate any cash flow uncertainty and reduce the stress on working capital.
Integration of Payment Gateway
The plugging of the payment gateway to the business’s website or ERP. Most payment gateways offer plugins for the most popular payment platforms. Apart from that, they offer detailed integration guides for major computer languages such as PHP, Python, Ruby, C#, etc.
Integrated Payment System
Software that integrates with your ERP and allows businesses to accept payment and seamlessly reconcile payments.
Intelligent Reporting
Payment gateways with intelligent reporting allow businesses to view and download monthly reports or generate custom reports including details like payment settlements, refunds, and reconciliation details.
International Payments
Some payment gateways allow businesses to accept international payments in addition to accepting payments in domestic currency.
Interoperable Card Tokenization System
This allows businesses to process card payments across multiple payment gateways or card networks.
Invoice Discounting
Invoice Discounting is the process where a business sells the invoice to a third party in order to get access to the funds in real-time. The third party is usually a financing company that takes on the responsibility of collecting the payment from the buyer.
Inward Remittance
Inward Remittances are transactions that are made from overseas to domestic banks. Inward remittance must have a foreign inward remittance certificate issued along with it.
Lending Service Providers
Service providers are the NBFCs or banks that work in collaboration with regulated entities to carry out some of their banking functions. Lending service providers may take over the task of onboarding the borrower and disbursing funds to them.
Lending As A Service
A relatively new concept in the financial sector where service providers aid banks to streamline their lending process.
Liberalized Remittance Scheme
Liberalized remittance scheme is a system by the Indian government that allows individuals to remit funds to another country for investment, expenditure, or academic purposes.
Loan Repayment
The process of repaying a credit availed by an individual or business with or without interest
Maker Checker Flow
Allows businesses to assign different rules to different team members and minimise human errors.
Marketplace
An E-Commerce platform where products and services by multiple sellers are aggregated.
Merchant
Another term for any business as an entity is used specifically in the payments ecosystem.
Merchant Category Code (MCC)
A code assigned to any sector or business by a card scheme is known as a merchant category code. The merchant discount rates (MDR) might vary on the basis of the MCC.
Merchant Discount Rate (MDR)
Merchant Discount Rate is the fee imposed on the merchant by the acquiring bank on every transaction.
Merchant Fraud
Wrongful activity or criminal deception is done by specific merchants while accepting payments from customers.
Merchant Identification Number
A number is assigned to every specific business or merchant by the acquiring bank.
Merchant Service Provider
The merchant service provider allows businesses to accept payment from customers seamlessly. They can help businesses set up merchant accounts, accept payments in various currencies, offer payment safety, and reconcile payments.
Multi-user support
Payment Gateways with multi-user support allow businesses to add multiple team members to define roles and permissions.
Multiple Payment Gateway
Businesses choose to integrate with multiple payment gateway partners so that they can achieve high transaction success rates and reduce the load of all transactions.
National Automated Clearing House (NACH)
National Automated Clearing House is a recurring payment platform by NPCI.
National Payments Corporation Of India
An umbrella organisation that handles most of the payment platforms in India including UPI, FASTag, Bharat Bill Pay, and more
NBFC
NBFC is the abbreviated version of non-bank financial company. These organisations do not own a banking license, however, they provide banking services.
Neobank
A neo bank is a new-age bank that operates exclusively online With no physical branches. they usually offer a higher customer experience and technological advancement compared to traditional banks.
