Payment Industry Terms
A plain-English glossary of common payment processing terminology
The payments industry is full of jargon. We believe you shouldn't need a glossary to understand your statement — but just in case, here's a straightforward guide to the most common terms.
Acquirer
The bank or financial institution that processes card payments on behalf of a merchant. CanDo Payments works with Elavon as our acquiring partner.
Authorisation
The process of verifying that a cardholder has sufficient funds or credit to complete a transaction. This happens in real time when a card is presented.
Auth Fee
A small fee charged for each authorisation request, regardless of whether the transaction is approved or declined. Typically between 1p and 5p.
Chargeback
A reversal of a card payment, initiated by the cardholder's bank. This can occur when a customer disputes a transaction.
Chip and PIN
A method of card payment where the cardholder inserts their card into the terminal and enters a four-digit PIN to verify the transaction.
Contactless
A payment method where the cardholder taps their card or device on the terminal to pay. Currently limited to £100 per transaction in the UK.
DCC (Dynamic Currency Conversion)
A service that allows international cardholders to pay in their home currency at the point of sale. The merchant receives the payment in GBP.
EPOS (Electronic Point of Sale)
A system that combines payment processing with business management tools — including sales tracking, stock management, and reporting.
Interchange Fee
A fee paid by the acquirer to the card-issuing bank for each card transaction. This is set by the card schemes (Visa, Mastercard) and is the largest component of processing costs.
ISO (Independent Sales Organisation)
A company authorised to sell payment processing services on behalf of an acquiring bank. CanDo Payments Ltd is an ISO.
Merchant
A business that accepts card payments from customers.
Merchant Cash Advance
A form of business funding where a lump sum is provided upfront and repaid through a percentage of future card transactions.
MSC (Merchant Service Charge)
The total fee charged to a merchant for processing a card transaction. This includes the interchange fee, scheme fee, and the acquirer's margin.
NFC (Near Field Communication)
The wireless technology that enables contactless payments. Used by card terminals, smartphones, and wearable devices.
PCI DSS
Payment Card Industry Data Security Standard — a set of security requirements that all businesses handling card data must comply with to protect cardholder information.
PCI Fee
A monthly or annual fee charged to merchants for PCI compliance management and monitoring.
Payment Gateway
Software that connects an online store to the payment processing network, enabling e-commerce businesses to accept card payments securely.
Scheme Fee
A fee charged by the card schemes (Visa, Mastercard, Amex) for using their network to process transactions.
Settlement
The process by which funds from card transactions are transferred from the acquirer to the merchant's bank account. CanDo Payments offers next-day settlement.
Terminal
A device used to accept card payments. Available as countertop, portable, or mobile units.
Tokenisation
A security process that replaces sensitive card data with a unique identifier (token), allowing recurring payments without storing the actual card number.
Virtual Terminal
A web-based application that allows merchants to process card payments manually — typically used for phone orders or mail orders.
3D Secure
An additional layer of security for online card payments. The cardholder is asked to verify their identity (e.g. via their banking app) before the payment is processed.