Welcome to the first entry of our guide to
essential payment terminology.
We will be introducing key terms for the payment professionals regularly,
so you too can speak the money lingo.
Card Not Present Transaction
A card not present transaction (CNP) is a credit card purchase made over the telephone or over the Internet where the physical card has not been swiped into a reader. It is a major route for credit card fraud. If a fraudulent transaction is reported, the bank that hosted the merchant account that received the money from the fraudulent transaction must make restitution. Whereas in a swiped transaction the bank that issued the credit card is liable for restitution.
Payment Service Provider
A payment service provider (PSP) offers merchants online services for accepting electronic payments by a variety of payment methods including credit card, bank-based payments such as direct debit, bank transfer, and real-time bank transfer based on online banking online ban. Some PSPs provide unique services to process other next generation methods (payments systems) including cash payments, wallets and other payments methods such as Jumio.
Typically, a PSP can connect to multiple acquiring banks, card, and payment networks. In many cases, the PSP will fully manage these technical connections, relationships with the external network, and bank accounts. This makes the merchant less dependent on financial institutions and free from the task of establishing these connections directly – especially when operating internationally.
Furthermore, a full service PSP can offer risk management services for card and bank based payments, transaction payment matching, reporting, fund remittance and fraud protection.
A micropayment is a financial transaction involving a very small sum of money and usually one that occurs online. Payment service providers define the amount of a micropayment differently averaging from $10-20 and though micropayments were originally envisioned to involve much smaller sums of money, practical systems to allow transactions of less than $1 have seen little success.
One problem that has prevented their emergence is a need to keep costs for individual transactions low, which is impractical when transacting such small sums even if the transaction fee is just a few cents. Micropayments were initially devised as a way of allowing the sale of online content and were envisioned to involve small sums of only a few cents.
(entries are derived from Wikipedia)