Ten More Need-to-Know Payment Terms

In an industry where it is often hard to keep track of all the terms and acronyms without a guidebook, we are continuing our efforts to add substance to your payment vocabulary. Here’s another list of 10 payment industry terms you may want to know:

Automated Clearing House (ACH)

An electronic clearing and settlement system in which payment orders are exchanged among financial institutions. In the US, the ACH network processes large volumes of credit and debit transactions in batches, including direct deposit, payroll and vendor payments.


The transmission or processing of a group of payment orders and/or securities transfer instructions as a set at specified or discrete intervals of time.

Chip Card

A payment card containing one or more computer chips or integrated circuits for identification, data storage or special purpose processing used to validate personal identification numbers (PINs), authorize purchases, verify account balances and store personal records. Chip cards facilitate EMV® payment processing throughout Europe and the US.

Contactless Card

A payment card that does not require physical contact between the card and the card reader or terminal. These types of cards include credit cards and debit cards, key fobs, smart cards, or other devices, including smartphones and other mobile devices, that use radio-frequency identification (RFID) or near field communication (NFC) to make secure payments. Commercial examples include ATAR pay, Samsung Pay, Apple Pay, Android Pay and Fitbit Pay.

Data Encryption Standard (DES)

A symmetric cryptographic algorithm that is widely used, particularly in the financial industry. Triple DES consists of operating three times on a set of data (encrypting-decrypting-encrypting) using a double-length DES key.

Digital Signature

A string of data generated by means of a cryptographic method that is attached to a message to ensure its authenticity as well as to protect the recipient against repudiation by the sender. A valid digital signature gives a recipient reason to believe that the message was created by a known sender (authentication), that the sender cannot deny having sent the message (non-repudiation), and that the message was not altered in transit (integrity).

Electronic Wallet

A computer device used in electronic money systems which can contain an IC (integrated circuit) card or in which IC cards can be inserted. This can include purchasing items on-line with a computer or using a smartphone to purchase something at a store. An individual's bank account can also be linked to their digital wallet. They might also have their driver’s license, health insurance card, loyalty card(s) and other ID documents stored on the phone using their digital wallet.


The use of cryptographic algorithms to encode clear text data into secure ciphertext to prevent unauthorized observation. Encryption does not itself prevent interference but denies the intelligible content to a would-be interceptor. In an encryption scheme, the intended information or message, referred to as plaintext, is encrypted using an encryption algorithm – a cipher – generating the ciphertext that can be read only if properly decrypted.

Personal Identification Number (PIN)

A numeric code which the cardholder may need to quote for verification of identity. In electronic transactions, it is seen as the equivalent of a signature. PINs may be used to authenticate banking systems with cardholders, governments with citizens, enterprises with employees, and computers with users, among other uses.

Point of Sale (POS)

The time and place where a retail transaction is completed. At the point of sale, the merchant calculates the amount owed by the customer, indicates that amount, may prepare an invoice for the customer (which may be a cash register printout), and indicates the options for the customer to make payment. It is also the point at which a customer makes a payment to the merchant in exchange for goods or after provision of a service.