Payment Glossary: 70+ Payment Terms and Definitions for 2026

Cart abandonment in payments happens when a buyer reaches checkout but drops off because of authentication friction, missing payment methods, or declines. It signals lost revenue and fixable checkout issues.

cart abandonment, checkout abandonment, abandoned checkout

Approval rate shows how many payment attempts issuers authorize. It helps payment teams spot decline drivers, improve routing, and recover revenue that would otherwise be lost.

authorization rate, payment approval rate, transaction approval rate

Payment authorization is the issuer decision that approves or declines a card transaction before capture. Strong authorization performance helps merchants reduce failed payments and protect revenue.

card authorization, auth, authorization request

AVS checks a shopper’s billing address against issuer records during authorization. Used well, it helps payment teams cut fraud without creating unnecessary false declines.

AVS, billing address verification, address verification

Payment capture is the step that converts an approved card hold into collected funds. Getting the timing right helps merchants secure revenue, avoid expired authorizations, and reduce refund overhead.

card capture, payment settlement request, capture request

A card network connects acquirers and issuers to authorize, route, and clear card payments. For payment teams, network rules and response codes can directly influence approval rates and retry strategy.

card scheme, payment network, card rail

Card Present refers to an in-person payment where a physical card is read by a terminal. It usually brings lower fraud risk, stronger issuer trust, and better authorization performance.

CP, card-present transaction, face-to-face transaction

CAVV is the cryptographic proof that a 3D Secure check succeeded. When payment systems pass it correctly, merchants reduce fraud exposure and avoid declines caused by broken authentication data.

Cardholder Authentication Verification Value, 3DS authentication value, 3D Secure cryptographic value

A customer-initiated transaction happens while the buyer is on session and actively completing checkout. Getting this first payment right supports stronger authentication, cleaner tokenization, and better downstream billing performance.

CIT, on-session transaction, cardholder-initiated transaction

CVV is the card security code used in online payments to help issuers verify card possession. For merchants, capturing it correctly can reduce false declines, block fraud, and support stronger authorization outcomes.

CVC, CID, card security code

A payment decline happens when an issuer refuses an authorization request. For merchants, understanding soft vs hard declines helps recover revenue, reduce false declines, and improve checkout performance.

declined payment, transaction decline, authorization decline

Decline codes explain why a card payment failed and whether it is worth retrying. For payment teams, they are a key input for reducing false declines, controlling retry costs, and recovering revenue.

issuer response code, payment decline code, authorization decline code

A digital wallet stores payment credentials as secure tokens and passes authenticated data into checkout. For merchants, that means faster payment flows, fewer false declines, and better conversion.

mobile wallet, e-wallet, digital payment wallet

A false decline blocks a legitimate payment during authorization, often because issuer or fraud rules lack context. For merchants, that means lost sales, lower approval rates, and more checkout friction.

insult rate, incorrect decline, wrongful decline

A floor limit lets a merchant approve low-value card payments offline when speed or connectivity matters. The trade-off is higher exposure to delayed declines and unrecovered revenue.

offline limit, authorization floor limit, zero floor limit

Fraud detection screens transactions across checkout, gateways, networks, and issuers to stop unauthorized payments. Well-tuned controls reduce chargebacks without unnecessarily hurting conversion or approvals.

transaction fraud screening, payment risk screening, fraud checks

An authorization hold temporarily reserves card funds before capture. For payment teams, managing holds well helps prevent false declines, support issues, and missed revenue.

pre-authorization hold, card authorization hold, funds hold

An issuer is the bank behind a customer’s card and the final authority on approval or decline. For payment teams, issuer behavior shapes retries, routing, and revenue recovery.

issuing bank, card issuer, issuer bank

A merchant is the business that starts a card or digital payment by capturing customer details and sending an authorization request. How it manages declines, retries, and routing can directly affect recovered revenue.

seller, business merchant, merchant of record

Network fees are card-brand charges for routing payment messages. They affect every authorization attempt, so poor retry logic and avoidable declines can quietly raise processing costs.

assessment fee, brand fee, card network assessment

NFC payments let customers tap cards, phones, or wearables to send tokenized credentials at the point of sale. For merchants, that means faster checkout, lower exposure to card data, and more reliable authorizations.

contactless payments, tap-to-pay, near field communication payments

Offline authorization lets a terminal approve a card transaction locally when no issuer connection is available. It helps merchants keep accepting payments, but shifts delayed-decline risk to the merchant.

offline auth, EMV offline approval, offline approval

An optimization engine evaluates transaction data, routing, and retry timing in real time to reduce avoidable declines, recover failed payments, and improve approval performance.

payment optimization engine, authorization optimization engine, payment decision engine

A point of sale is the hardware or checkout flow that captures payment details and starts authorization. Its setup affects decline handling, fraud controls, and transaction success.

POS, payment terminal, checkout system

A risk score helps payment teams judge whether a transaction should pass, be reviewed, or be blocked before authorization. Used well, it reduces false declines and protects revenue.

transaction risk score, fraud score, payment risk rating

A soft decline is a temporary issuer rejection that can often be recovered with better authentication, corrected request data, or well-timed retries to protect revenue.

temporary decline, recoverable decline, conditional decline

Strong Customer Authentication requires two-factor verification for many EEA online payments. Getting exemptions, 3D Secure flows, and retries right helps reduce false declines and protect conversion.

SCA, PSD2 SCA

Yield optimization helps payment teams recover more approved transactions by improving routing, data quality, and retry timing. Done well, it lifts revenue and reduces avoidable payment failures.

payment optimization, authorization optimization, payment yield management

A zero-dollar authorization verifies a card without placing a hold, helping merchants safely vault credentials, reduce avoidable declines, and support smoother recurring billing.

account status inquiry, $0 authorization, zero amount authorization

3D Secure adds cardholder authentication before authorization, helping merchants reduce fraud and shift certain chargeback liability while managing checkout friction and approval performance.

3DS, 3DS2, payer authentication