Glossary

Payments 101

PSP
Payment Service Provider

Judopay is a PSP. We enable businesses to take payments online, on mobile and in-app through a variety of payment methods. Most PSPs offer payment gateway or acquiring services. Judopay offers both.

Payment Gateway
In exactly the same way as you would walk into a store and tap your card on a Point of Sale Terminal to buy your lunch, a payment gateway enables that experience online, on mobile and in-app. We authorize transactions between you and your customers.

Acquirier
A bank or financial institution that processes a payment on behalf of a merchant.

Merchant Bank
After the payment, this is where the money ends up. For example, if you (consumer) bought headphones from Amazon (merchant), the merchant bank is Amazon’s bank

Issurer
The bank of a consumer. This bank issues a consumer with an account and a card.

Merchant
A Merchant is the payment world’s way of saying someone who sells something. A person or company involved in wholesale trade.

API
Application Program Interface

Essentially, an API produces a call from your system to ours, and that call requests data to be sent from our systems to yours. JudoAPI is the main component of our payment processing platform. Customers use this API to process multiple transactions and configure a checkout.

Sandbox Account
A self-contained virtual testing environment that mimics the live Judopay environment. It provides a safe space where you can initiate and watch payments you make to the Judopay APIs without touching a live account.

EPoS Terminal
Electronic Point of Sale Terminal

This is used in a store to take a payment from your card. You pop your card in, enter your pin and receive a receipt (provided the payment goes through). This physical activity can be mirrored online by using a Payment Service Provider. Each store is likely to have its own EPoS system, so integrating these into one place can be difficult.

Settlement

Money is settled from the acquiring bank into the merchant bank account. Normally shown as T+2 (T = transaction day + 2 days).

Alternative Payment Methods
Alternative payment methods are the way you pay. The most common types of alternative payment methods are debit cards, charge cards, and prepaid cards.

Mobile Digital Wallets
An electronic device or online service that allows an individual to make electronic transactions. Examples of this might be using Apple Pay or Google Pay on your mobile. Judopay enables these options for its merchants.

MID
Merchant Identification Number.

All online merchants must be assigned a MID to enable them to accept online, mobile or in-app payments. This is used by the computer network to identify the merchant processing a transaction. If you work with Judopay, we’ll help you set up your MID.

Card Schemes
Card schemes are payment networks linked to payment cards such as debit or credit cards, of which a bank or any other eligible financial institution can become a member. By becoming a member of the scheme, the member then gets the possibility to issue or acquire cards operating on the network of that card scheme.

QR Code
A QR Code is a scannable barcode that is configured by the payments provider. It can be scanned by most mobile phone s and the payment can be automatically taken from your account.

Marketplace or Aggregator
Connects multiple merchants under one roof. For example, a travel company like booking.com aggregates multiple hotels to connect many merchants with one customer through an online platform. A marketplace has two payment model options:

Staged Wallet: the aggregator owns all settlements times and gains interest on funds. Any money taken is held in one wallet and is then dispersed to Merchants under their own settlement rules.

Pass-Through Wallet: each merchant has a direct MID into wallet account. That is, all the funds move immediately to the correct merchant.

E-commerce platforms
E-commerce is the process of buying and selling products by electronic means such as mobile applications or the internet. An e-commerce platform is a software application that allows online businesses to manage to build a storefront online or in mobile. Examples include Magento, Shopify, WooCommerce.

M-commerce

Mobile Commerce

The movement to enabling customers to buy, sell and trade on-the-move. Enabling the best consumer experience through their mobile device.

Recurring Payments (or Subscription Payments)
Payments that are pre-authorised by the consumer and can be taken by the merchant on a regular, recurring basis without permission needed by the consumer.

Conversion rate
Getting your browsing customers from browsing to purchasing. The percentage of browsers that buy. Judopay, can increase this conversion rate for you significantly and can lead to many more sales.

 

Compliance

PCI DSS
Payment Card Industry Data Security Standard.

An information security standard that organisations handling branded credit cards from major card schemes must adhere to. The PCI Standard is mandated by the card brands and administered by the Payment Card Industry Security Standards Council. The standard was created to increase controls around cardholder data to reduce credit card fraud.

PSD2
The Second Payment Services Directive.

There are multiple elements to PSD2, some of which are still being ironed out. The directive has been designed by the countries of the European Union, and still applicable to the UK after Brexit. It’s good news for consumers and is encouraging incredible innovation in the payments industry. There are multiple elements to PSD2, some of which are listed below:

Open Banking: merchants, such as Apple, will be able to retrieve your account data from your bank with your permission. This means when you buy something they can make a payment for you, without having to redirect you to another service (like PayPal). Also, as a consumer, you’ll be able to collate information across all your bank accounts and hold it all in one place, giving you a safe and secure overview of your financial position all in one place.

3DS2: additional security checks when you’re paying online. The exact details of this are still being ironed out however an example of how this might work is using your mobile as a consenting device via facial recognition when making a payment on your laptop.

No more hidden costs: still to be confirmed of its inclusion, PSD2 has proposed making all costs throughout the payment journey transparent and also many of the costs (for example card scheme fees (see below)) standardised.

GDPR
The General Data Protection Regulation

European law regulating data protection. It sets guidelines for the collection and processing of personal information and individuals within the EU. Judopay GDPR policy can be found here.

KYC
Know Your Customer

A process to be completed by financial institutions (including Judopay) when opening accounts where they obtain information about the identity and address of the customers to help ensure that services are not misused.

AML
Anti-Money Laundering

AML is a term mainly used in the financial and legal industries to describe the legal controls that require financial institutions and other regulated companies to prevent, detect, and report money laundering activities.

Fees

Interchange Rate
An interchange rate is a fee charged by card schemes banks that cover the cost of handling and credit risk inherent in a bank credit or debit card transaction. You can see Visa’s interchange rates here and MasterCard’s interchanges rates here.

Scheme Fees

The card schemes are Visa and MasterCard and their fees are paid by acquirers like WorldPay, First Data and Barclaycard. Card scheme fees are a cost to your acquirer and are taken into account when setting the merchant service charge (MSC) rate they charge you for each transaction.

 

Making Payments Safe

Chargebacks

A payment a customer doesn’t recognise and believes to be fraudulent, so ask their bank to return the money to their account.

  • These are bad for merchants as not only is the payment returned to the customer by the bank, but both the issuing bank and acquiring bank charge them for the chargeback
  • Liability is typically on the merchant rather than the customer so the merchant should keep records of all purchases and receipt of payment/shipping should they need to dispute a chargeback at any point.

Tokenisation
When applied to data security, tokenisation is the process of substituting a sensitive data element with a non-sensitive equivalent, referred to as a token, that has no known value. So, Judopay takes card numbers and turn them into unknown values before any data leaves Judopay.

Pre-authorisation (autorisation)
Checks performed by banks to hold specific amounts or check your card is real. You may have seen £1 come out of your bank account when booking an Uber for example. This is Uber checking your bank account is live and well and has some funds in it. That fund will be held by Uber and then quickly returned to your bank account.

Zero-authorisation
Now, most card companies can do this as a zero-authorisation, meaning they can check your bank account is live and well without having to remove any physical funds from your bank account. Zero authorisation is set up with Judopay.

Collection
A collection is the result of a debt that hasn’t been paid on time. If you become significantly in debt with a merchant, it’s likely the merchant will pass the matter to a collection agency to receive that money from you.

3DS
3 Domain Secure

An additional fraud prevention tool where, for example, your bank may pop up to ask for a password in order to process a payment. Tokenisation does not happen in 3DS. 3DS is available to all companies using Judopay to process transactions. 3DS2.0 is part of PSD2 and explained above.

AVS
Address Verification Service

The system will check the billing address of a person claiming to own the card being used to purchase a good or service. A tool provided by card processors and issuing banks to merchants in order to detect suspicious transactions and prevent fraud.

Device ID
Judopay can pull contacts, card details, address notes, email addresses, and IP addresses (intellectual property- a key identifier of a device) to create a personality profile of a mobile phone and understand behavioural properties for that device. When this identity, we can understand the behaviors of the phone owner and better understand fraud.

Void
A void transaction is a card purchase that is canceled after it has been authorised but before it has been settled. This does not appear on a customer’s account statement, though it might appear on a list of pending transactions when the customer checks their account online.

CV2/CVV
Card Verification Value

The three little numbers on the back of your card. An important security feature for card transactions and often asked for on a payment screen.

PAN
Primary Account Number

This is the long number on the front of your card. The card number.

Luhn Checks
Also known as the modus 10 or the mod 10 algorithm which checks that the long card number is authentic. Judopay automates Luhn Checks.

TC40 Data
When a customer makes a fraud claim, their card-issuing bank generates a TC40 data claim. This claim is sent to your acquirer, any other issuing banks and card brands including Visa and MasterCard. The TC40 data report includes merchant details, bank details for those involved in the transaction and transaction details such as when and where it occurred.

Refunds
The returning of money to the customer after a good or service has been purchased. When you work with Judopay, refunds can be done through the JudoPortal.

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