International Payment Glossary pt. 1

You have certainly heard of specific terms used in the fintech field, such as EME, SEPA, or BaaS. It is true that these acronyms can sometimes seem obscure to the uninitiated.

To help you better understand the world of fintech, international payments, and financial services, Vincent Voisin, our co-founder and Chief Compliance Officer, has written a summary document of the most common terms, those that are often found in the payments ecosystem.

‍

Institutions & Statutes

Financial institutions, as well as international and non-international payment service providers, are numerous. Acronyms are often confusing and we get lost in a chaos of unclear names and concepts. Here is the Playbook to have everything under control.

Electronic Money Institution (EME) : structure approved by the ACPR to issue and manage electronic money (cards, wallets, prepaid accounts).

Payment Institution (EP) : an actor authorized to provide payment services (transfers, cards, direct debits) without being able to issue electronic money.

Approval : official authorization issued by the ACPR or the AMF to carry out a regulated financial activity.

ACPR : a body of the Banque de France that supervises banks, insurance companies and fintechs to guarantee the stability of the financial system.

AMF : French authority that regulates financial markets and protects investors.

CIF : advisor authorized to recommend financial products under the supervision of the AMF.

IOBSP : intermediary marketing banking or payment products on behalf of an authorized partner.

ESMA : European authority based in Paris that harmonizes financial rules in the European Union.

MiFID : European directive governing investment services and market transparency.

ORIAS : French register listing all authorized financial intermediaries (CIF, IOBSP, brokers, etc.).

Payments & Infrastructure

Payments involve multiple systems and infrastructures, processes, and guidelines. They include various steps and technical aspects. Here are some key terms.

‍

SEPA : unified zone for payments in euros, allowing simplified transfers and direct debits in 36 countries.
SWIFT : a global network used by banks to exchange secure payment messages.

Payment scheme : set of technical and contractual rules of a network (Visa, Mastercard, SEPA...).

BINS : British system automating electronic payments (salaries, invoices, transfers).

ACH : American network allowing electronic fund transfers without using cards.

Wero : future European instant payment scheme, alternative to Visa/Mastercard.

Settlement : the final stage of a payment where the funds are actually transferred.

PSP : payment service provider (e.g. Stripe, Adyen) connecting merchants and card networks.

DSP2 : European directive governing Open Banking and payment security.

IBAN : international number identifying a bank account.

BIC : SWIFT code identifying a bank.

Wire Transfer : international transfer using the SWIFT network.

Clearing (Compensation): validation of transactions before settlement between institutions.

Instant Payment : SEPA transfer executed in real time, credited in a few seconds.

Payment Gateway : technical gateway that secures online payments between customer, merchant and bank.

Card Scheme Fee : fees collected by card networks for the use of their infrastructure.

Products & Services

Whether it's solutions for users, technological infrastructures or management tools for businesses, each concept is essential to fully understand what can and cannot be done in a One-Stop Shop.

‍

Multi-currency account : account that allows you to manage several currencies from the same interface.

Buy Now, Pay Later (BNPL) : option allowing you to pay later or in several installments, often at no cost.

Cashback : automatic reimbursement of part of the amount spent, to retain users.

Virtual Card : temporary bank card, often used to secure online payments.

Digital Wallet : application like Apple Pay or PayPal that stores payment methods.

Open Banking : framework authorizing access to banking data (with consent) via API.

Open Finance : extension of Open Banking to all financial data (savings, insurance, credit, etc.).

BaaS (Banking as a Service) : model where a fintech uses a bank's infrastructure via API.

White-Label Platform : a fintech solution rebranded by another company under its own brand.

White-Label POS Financing : credit integrated into a commercial journey, operated by a fintech.

Liquidity Management : management of cash inflows and outflows of a company.

Treasury Management System (TMS) : software that automates cash management.

Forward (Futures contract): agreement setting an exchange rate in advance for a future transaction.

Foreign exchange option : financial product that allows you to buy or sell a currency at an agreed price, without obligation.

It's not over! As you know, financial terms are a lot, but fintech terms are even more numerous. The 'tech' section is coming very soon so that you don't miss out on any of the lengthy explanations in 'financialese' from your advisors ;)

‍