GLOSSARY

Financial key terms

Discover key terms of modern transaction banking and the fintech landscape. Our financial glossary offers clear definitions for essential terms in digital payments, cross-border transactions, and beyond. Stay up to date and follow the trends that are shaping global banking.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Account balance

An account balance indicates the present value of a financial account, whether it is a checking, savings, investment, or loan account. It shows the amount of money available or the outstanding amount owed, depending on the account type. The balance is determined by subtracting withdrawals and debits from deposits and credits.

ACH

ACH, or Automated Clearing House, is a local payment route in the United States that facilitates electronic money transfers between banks. It requires a local bank account or the use of local payment providers. ACH payments enable financial institutions to transfer funds electronically, bypassing traditional card networks like Visa and Mastercard. It’s commonly used for direct deposits, bill payments and other bank-to-bank transfers within the United States.

ACH payment

ACH payments are processed through the local ACH network in the United States, requiring a local bank account or the use of local payment providers. This method allows financial institutions to transfer funds electronically, bypassing traditional card networks like Visa and Mastercard.

B

Balance of payments

The balance of payments is a financial statement that summarizes all economic transactions between a country and the rest of the world over a specific period. It records trade in goods and services, cross-border investments, and financial transfers. A positive balance indicates that a country exports more than it imports, while a negative balance shows the opposite.

Bank transfer

A bank transfer refers to the electronic transfer of money from one bank account to another. Such transfers can take place either within the same bank or between different banks and are among the most commonly used methods worldwide for processing payments between individuals and companies.

BIC (Bank Identifier Code)

The Bank Identifier Code (BIC) is an internationally valid bank sort code defined by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). Since the BIC code is issued by SWIFT, it is often also referred to as the SWIFT code.

Business account

A business account is a specialized bank account designed to manage corporate funds and business-related income, used exclusively for handling transactions that support the company’s financial operations. This type of account helps maintain clear financial separation from personal funds, improving transparency in tracking business income and expenses. In some cases, it is legally required for a business to hold a separate corporate account.

C

Cash management

Cash management refers to the strategic process of all activities designed to manage a company’s liquidity, ensuring that cash is readily available to meet obligations and invest effectively.

Cashback

Cashback is a financial reward where a percentage of the money spent or deposited is returned to the customer. It is commonly offered by credit cards, banks, retailers and online platforms to incentivise spending, saving or specific financial behaviors. Cashback can reduce overall costs and increase savings, making it a popular benefit across various industries.

Cashless payment

A cashless payment refers to any financial transaction where no physical cash is exchanged. Instead, the payment is processed using digital or electronic methods such as bank transfers, payment cards, mobile apps, or online platforms. It allows money to move from one account to another without the need for coins or banknotes.

Credit card

A credit card is a payment card that enables users to make purchases or withdraw cash using borrowed funds, rather than money from their own bank account. Unlike a debit card, which instantly deducts the transaction amount from a linked account, a credit card allows users to borrow up to a set limit and repay it later, usually with interest.

Currency

A currency is a commonly accepted form of payment, typically issued by a government and used within its region. It serves as the physical representation of money, facilitating trade and financial transactions.

Currency exchange

Currency exchange is the process of converting one country’s currency into another, enabling international activities such as travel, trade, and investment. This can take place at physical locations like banks and exchange offices, or through digital platforms. Exchange rates fluctuate based on factors like market demand, economic indicators, and geopolitical events.

CVC (Card Verification Code)

The Card Verification Code (CVC) is a security feature found on debit and credit cards. For most cards, such as Visa and MasterCard, it’s a three-digit number located on the back, near the signature area. This code adds an extra layer of protection by confirming the cardholder has the physical card when making online or phone purchases.

D

Debit card

A debit card is a payment card that enables users to make purchases or withdraw cash directly from their bank account, such as a checking or savings account. Unlike a credit card, which relies on borrowed funds, a debit card immediately deducts money from the user’s account when a transaction is made.

Debit interest rate

A debit interest rate, also known as a debit card interest rate, is the interest charged when a bank account linked to a debit card goes into overdraft. This rate applies only when spending exceeds the available balance, effectively resulting in a short-term loan from the bank.

Dual currency system

A dual currency system refers to the simultaneous use of two currencies within the same country or economic region. Typically, this involves a combination of the national currency and a widely accepted foreign currency, such as the U.S. dollar or euro.

E

Electronic signature

An electronic signature (e-signature) in banking is a digital method of signing documents that confirms the identity and intent of the signer. It allows customers, financial institutions, and third parties to authorise contracts, transactions, and regulatory documents – such as account openings, loan agreements, and KYC forms – without a handwritten signature. Legally recognised, e-signatures range from typed names to advanced digital formats secured with encryption and certificates.

Exchange rate

The foreign exchange rate describes the relationship between two currencies. It shows how much one currency is worth in exchange for another and indicates the price of a foreign currency that must be paid domestically to obtain it. The exchange rate therefore regulates the price of two currencies in relation to each other.

F

Foreign exchange

Foreign exchange (FX) is the global market for exchanging one currency for another. It enables international trade, investment, and travel by converting currencies through real-time exchange rates.

FPS (Faster Payment System)

The Faster Payment System (FPS) is a UK payment scheme that enables businesses, individuals, and institutions to send and receive sterling payments in near real time, 24/7. Transactions are typically processed within seconds, making FPS one of the fastest domestic payment systems in the world.

I

Instant transfer

An instant transfer is a real-time payment method that allows funds to be sent and received within seconds—24/7, including weekends and holidays. In banking, instant transfers are used for fast domestic or cross-border payments, ensuring immediate fund availability and improved cash flow.

Interchange fee

An interchange fee is a charge paid between banks for processing credit or debit card transactions. When a customer uses a card to make a purchase, the merchant’s bank (known as the acquiring bank) pays a fee to the customer’s bank (the issuing bank). This fee covers costs such as transaction handling, fraud prevention, and maintaining security.

Interest rate

An interest rate is the cost of borrowing or the reward for saving, expressed as a percentage of the principal amount in an account or loan, reflecting the time value of money and compensation for risk. It influences economic activity by guiding consumers, investors, and businesses in decisions related to spending, saving, and investing.

Interest rate risk

Interest rate risk refers to potential financial losses that may arise from fluctuations in market interest rates. Rising or falling rates affect borrowing costs, the value of fixed-income investments, and liquidity planning. For internationally active companies, this can also impact financing and the return on liquid assets. Effective treasury strategies, such as hedging, help reduce this risk.

K

Key currency

A key currency is a stable and widely used currency in international trade and finance that serves as a benchmark for global transactions. It is often held as a reserve by central banks and used for pricing commodities, foreign exchange, and cross-border payments. The British pound, U.S. dollar, euro, and yen are widely considered key currencies.

M

Mastercard

Mastercard is a global payment network that enables secure electronic transactions between consumers, businesses, and financial institutions. It partners with banks and financial institutions to issue branded credit, debit, and prepaid cards, allowing users to make purchases in stores, online, and abroad.

Minimum balance

A minimum balance is the lowest amount of money that must be maintained in a bank account to keep it active or to avoid fees. Banks may require a minimum balance for business or personal accounts as a condition for waiving maintenance fees, earning interest, or accessing certain account features. Falling below the required threshold can result in penalties or loss of benefits.

Mobile banking

Mobile banking refers to financial services provided by a bank or financial institution through a mobile device, such as a smartphone or tablet. These services typically include checking account balances, transferring money, paying bills, and more, all accessed via a mobile app or optimised mobile website.

MT103

An MT103 is a standardised payment message issued by the bank within the SWIFT network, serving as an official confirmation of a completed transfer. It includes all relevant payment details, such as the date, amount, currency, and information about the sender and recipient. The MT103 document thus provides a reliable basis for transactions requiring payment confirmation, such as deliveries or services.

P

Payment gateway

A payment gateway is the technical connection between a business and the payment networks. It securely transmits payment data, authorizes transactions in real time, and protects against fraud. In modern FinTech solutions, the gateway plays a central role in ensuring smooth, fast, and secure payment processing – whether in e-commerce, mobile apps, or at the point of sale.

Payment provider

A payment provider, also known as a Payment Service Provider (PSP), is a company that enables businesses to accept and process customer payments through various channels. These may include credit cards, bank transfers, direct debits, and digital wallets, both online and in-store.

Phishing

Phishing is a type of cyberattack in which attackers use fraudulent emails, messages, calls or websites to deceive individuals into revealing personal information, downloading harmful software or becoming victims of other cybercrimes. As a form of social engineering, phishing relies on manipulating human behavior rather than directly targeting systems.

Premium account

A premium bank account is a specialised account offering benefits like reduced fees, higher limits, discounted loans, and financial advice. These perks are available to customers who maintain high balances or engage in relationship banking by holding multiple accounts (e.g., checking, savings, loans) with the same institution. While premium accounts provide valuable services, they often require significant balances to avoid fees, making them ideal for those with higher financial activity or savings.

Prepaid card

A prepaid card is a payment card that is preloaded with a specific amount of money by the user or a third party. Unlike a debit or credit card, it is not directly linked to a bank account or a line of credit. Instead, users can only spend the amount of money that has been preloaded onto the card.

Prime rate

The prime rate is the interest rate that commercial banks charge their most creditworthy customers, often large corporations. From a currency perspective, it reflects the cost of borrowing in a particular currency and serves as a key indicator of monetary policy. Changes in a country’s prime rate can influence capital flows, foreign exchange rates, and the overall strength or weakness of that currency in global markets.

PSD2 (Payment Services Directive 2)

The Payment Services Directive 2 (PSD2) is a key regulation within the European Union that governs Open Banking. It aims to liberalise the market by allowing third-party providers (TPPs) to offer payment services, fostering competition and innovation in the financial sector.

R

Routing number

A routing number – also known as a routing transit number or ABA routing number – is a nine-digit code used to identify banks in the United States, ensuring that funds are correctly routed for various types of transactions. This number is essential for handling domestic payments, such as direct deposits and bill payments, within the United States.

S

SEPA (Single Euro Payments Area)

The Single Euro Payments Area (SEPA) allows businesses, individuals and other institutions to make cashless euro payments, such as credit transfers and direct debits, across the European Union and certain non-EU countries. These payments are processed with the same speed, security, and efficiency as domestic transactions.

SSL (Secure Sockets Layer)

SSL (Secure Sockets Layer) is an encryption-based Internet security protocol that protects data exchanged between a website and a user’s browser, ensuring sensitive information stays private and secure. It helps businesses safeguard transactions, build trust, and improve search rankings by enabling HTTPS. SSL is the direct predecessor of TLS (Transport Layer Security), which is now the standard for secure communications online.

SWIFT

A global network that facilitates secure and standardized communication between financial institutions. Established in 1973, SWIFT provides a messaging platform that enables banks and other financial entities to exchange information related to international money transfers, securities transactions, and other financial operations.

SWIFT payment

A SWIFT payment is an international money transfer made through the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network. The SWIFT network doesn’t actually transfer funds, nor is it a banking system, Rather, it sends payment orders between banks using SWIFT codes.

T

Treasury management

Treasury management plays a central role in the financial health and operational efficiency of a business. It encompasses a wide range of responsibilities that go far beyond simply managing cash. From ensuring day-to-day liquidity to supporting long-term financial strategy, treasury teams help companies maintain stability, adapt to market changes, and make informed decisions.

W

Wire transfer

A wire transfer is an electronic method of sending money from one bank account to another, either domestically or internationally. While domestic wire transfers typically use local systems (like Fedwire in the US or SEPA in Europe), international wire transfers are most often processed through the SWIFT network.

About amnis

amnis offers a comprehensive platform for international banking, offering a range of tools in one place. Transfer money abroad, exchange currencies 24/7 and collect international money transfer with your own IBAN accounts supporting 20+ currencies. Founded in 2014 in Zurich, amnis is a regulated payment institution under the supervision of the Banking Supervision Section in Liechtenstein (FMA) within the EEA.

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