We pride ourselves on cutting out the jargon and communicating in simple, easy-to-understand language. But fintech is a jargon-heavy sector – even the word fintech (that’s shorthand for financial technology) is jargon. Get to grips with what everyone else is really saying with our insider’s glossary – updated regularly.
Application Programming Interface (API): A set of protocols that facilitates communication between two applications. APIs allow the creation of applications that access data from and the features of third parties.
Banking as a Service (BaaS): A model that allows a licensed provider to integrate financial products and services into a non-financial service brand’s own environment using APIs and a white-labelled front end.
Blockchain: A shared database or ledger that collects information into digital blocks. This decentralised approach means the sharing of these blocks of information is easier and cheaper.
Buy Now, Pay Later (BNPL): A short-term financing product that allows consumers to make purchases and pay for them later. BNPL is one of the fastest-growing digital financial product in part due to the speed of approval, term flexibility, low-to-no-interest and no credit impact if paid on time.
Cross-border payments: Wholesale, retail or recurring transactions involving individuals, banks, companies, and other entities in which the payee and the recipient operate from different countries.
CX: Shorthand for customer experience and refers to a customer’s entire experience of a brand, from the marketing stage in the buying journey, to post-sales service and everything in between.
Electronic Funds Transfer (eFt): The transfer of funds initiated electronically, including card payments, atm withdrawals, point-of-sale and debit transfers.
Fintech as a Service (FaaS): Fintech as a Service allows any company to use fintech APIs to embed financial capabilities into their existing applications, products and services. Sound familiar? FaaS is pretty much interchangeable with BaaS, but is fast becoming the preferable term in this fast-growing industry.
Know Your Customer (KYC): Standards used within the financial services industry to protect all parties from risk through the mandatory verification and authentication of a customer’s identity. All legal and financial institutions must validate their customers’ Proof of Identity (POI) and Proof of Address (POA) to prevent illegal or fraudulent activities.
Metaverse: The next iteration of the Internet – a digital, immersive 3D world that mimics aspects of the physical world using technologies like virtual reality (VR). Already in development, research suggests that 25% of people will spend at least one hour a day in a metaverse for work, shopping, education, social media and/or entertainment by 2026.
Payment gateway: An interface between a merchant and the acquirer that allows the acceptance of credit/debit transactions. The technology behind a payment gateway validates card details, ensures sufficient funds and then enables merchants to get paid.
Payment Card Industry Data Security Standard (PCI DSS): A set of standards that protect consumers’ sensitive data and is applicable to organisations that store/process/transmit cardholder data either as clear or in an encrypted manner.
Point to Point Encryption (P2P): Payment encryption. Specifically, customer account data is encrypted at the swipe and decrypted at either a retailer’s switch, a payment gateway or by the processor depending on the scheme.
POS financing: Also referred to as point-of-sale financing, an increasingly popular style of financial product that offers customers flexible, pay-over-time installment options when completing a sale via e-commerce. BNPL is an example of POS financing.
PSD2: A European regulation for electronic payment services that aims to make payments more secure, boost innovation and help banking services adapt to new technologies.
Strong Customer Authentication (SCA): The use of two authentication factors for bank operations that were not previously required, including payments and access to accounts online or via apps, as well as a stricter definition of what counts as an authentication factor.
Tokenisation: The process of replacing cardholder data with a random string of characters called Tokens to move sensitive data while minimising the threat of fraud or identity theft.
Virtual card: A payment card that exists digitally, rather than as a plastic, physical card, yet still offers users the same capabilities, including contactless payments via a smartphone.
White-Label platform: Also referred to as a cleanskin platform, a software platform that can be rebranded by a third party, allowing a bank or lender to put their stamp on a platform developed by a third-party (often a fintech).
Bank Identification Number (BIN): Also referred to as an Issuer Identification Number (IIN), the initial four to six numbers on a payment card that identifies the institution that issues the card. BINs are vital to the process of matching transactions to the issuer of the charge card.
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