Payment Glossary: key terms explained
Plain-language definitions of the most important payment security, tokenization and PCI DSS terms. From payment tokens and card vaults to 3D Secure, IC++ pricing and SAQ requirements, find every term you need in one place.
Tokenization and card data terms
Core concepts around how payment card data is stored, replaced and protected using tokens and vaults.
What Is a Payment Token?
A randomly generated surrogate value that replaces a real card number (PAN) in payment systems. Tokens have no exploitable link to the underlying card data.
What Is Network Tokenization?
A card scheme-issued token (Visa VTS, Mastercard MDES) bound to a specific merchant or device. Reduces card-not-present fraud and enables automatic card updates.
What Is a Card Vault?
A secure, certified environment that stores raw card numbers (PANs) and issues tokens in return. PCI Proxy operates a PCI DSS Level 1 card vault in the EU.
What Is PAN Data?
PAN stands for Primary Account Number, the 13-19 digit number embossed on a payment card. Storing or transmitting PANs unprotected triggers PCI DSS scope.
Authentication, compliance and pricing terms
Key terms around payment authentication protocols, PCI DSS compliance scope and transparent pricing models.
What Is 3D Secure (3DS)?
An EMVCo authentication protocol (Visa Secure, Mastercard Identity Check) that adds a payer identity step to online transactions. 3DS2 uses risk-based frictionless flows to meet PSD2 SCA requirements.
SAQ A vs SAQ D
SAQ A (22 controls) applies when card data is fully outsourced. SAQ D (up to 329 controls) applies when your systems touch card data. PCI Proxy helps reduce scope from SAQ D to SAQ A.
What Is Interchange Plus Plus (IC++)?
A transparent pricing model listing interchange fees, scheme fees and processor margin as three separate line items. PCI Proxy offers IC++ acquiring from 0.45% margin.
What Is a Payment Orchestrator?
A middleware layer that routes transactions across multiple PSPs, acquirers and gateways from a single integration. Portable vault tokens from PCI Proxy are the foundation of any orchestration strategy.
Payment Infrastructure Terms
Key players and concepts in the payment processing ecosystem explained.
What Is a Payment Gateway?
Routes transaction data between merchant, acquirer and card network. The merchant-facing entry point for card payments.
What Is a Payment Processor?
Handles authorization and settlement of card transactions between merchants and issuing banks on behalf of acquirers.
What Is an Acquirer?
The bank or financial institution that processes card payments on behalf of a merchant and settles funds into the merchant account.
What Is an Issuer?
The bank or financial institution that issues payment cards to consumers and approves or declines transactions.
What Is a Card Scheme?
Network that sets the rules and connects issuers and acquirers. Examples include Visa, Mastercard, and American Express.
What Is a Merchant ID?
A unique identifier (MID) assigned by an acquirer to each merchant location to identify transactions during authorization.
What Is a Chargeback?
A forced transaction reversal initiated by the cardholder through their issuing bank to dispute a payment.
What Is Payment Fraud?
Unauthorized use of a payment method for financial gain. Tokenization significantly reduces card fraud exposure.
What Is a CVV?
A 3 or 4 digit security code printed on a payment card used to verify card-not-present transactions.
What Is End-to-End Encryption?
Encrypts card data from the point of capture all the way to the secure processor so it cannot be read in transit.
What Is a Hardware Security Module?
A tamper-resistant hardware device used to generate, store and manage cryptographic keys for payment systems.
What Is AVS?
A fraud prevention tool that checks the billing address provided at checkout against the card issuer records.
What Is Strong Customer Authentication?
An EU payment regulation (PSD2) requirement for multi-factor authentication on electronic transactions.
What Is 3DS2?
The latest version of the 3D Secure authentication protocol supporting risk-based, frictionless authentication flows.
Why these terms matter for your business
Understanding payment tokenization, PCI DSS scope and authentication is the foundation of any secure payments strategy. PCI Proxy puts all of these concepts into practice: a dedicated EU PCI DSS Level 1 card vault with portable tokens, hosted payment fields, 3DS support and optional IC++ acquiring from 0.45%.
Ready to put these concepts into practice?
PCI Proxy is the EU card vault that makes tokenization, 3DS, IC++ and PCI scope reduction work together in a single platform.