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

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

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.

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.

E

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.

I

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.

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

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

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.

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.

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.

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.

Discover amnis

Cookie Consent with Real Cookie Banner