Are you getting dizzy with all the fintech and personal finance terms and abbreviations out there? We totally understand!
New technology could seem a bit intimidating, even a bit overwhelming. That’s the reason we wanted to make things clear for you, which is also a part of our mission to constantly innovate payments making them easier and more affordable.
Here is a non-exhaustive list of fintech terms, jargon and words that might come handy when making choices for the financial technology to entrust your money.
Fintech
It’s a short and very descriptive term for innovative financial technology. Fintech encompasses relatively novel processes, applications, business models and products, served via the internet as a financial service for people or businesses. Examples include digital wallets, crowdfunding platforms, mobile payments, insurance, budgeting apps.
Contactless card
It makes your shopping faster because you don’t need to enter a PIN in most cases. The payment transaction information is transmitted via radio waves, between the contactless card’s embedded NFC chip and the antenna built-in the POS terminal. The technology helps you quickly tap & pay with any of your iCard debit cards.
Electronic money
E-money is a record of monetary value stored in a computer system. This record is exchanged and transferred between the ledgers of participants in the financial system – fintechs, banks, payment processors and other types of financial institutions. iCard, for example, is a licensed e-money institution with the right to open accounts for people throughout the EEA.
Virtual cards
Virtual cards are payment instruments (VISA, Mastercard or other) that have no physical carrier and are only suited for online and distant payments. The major advantage of virtual cards is their safety aspect – they are a commodity which can be deleted with a tap. In essence, virtual cards are like a wall between the risks associated with online payments and your primary debit card.
AML
Anti-money laundering is a series of regulations, government requirements and procedures implemented by financial institutions in an effort to prevent any illegal activities related to money laundering.
KYC
Know Your Customer is a process employed by banks and fintechs alike for verifying the identities of account holders. It also refers to related banking regulations. Besides being a legal requirement, knowing our customers is a way to protect the integrity of iCard digital wallet.
IBAN
It is short for International Bank Account Number. It is a combination of identifiers within a long string of letters and numbers – pointing to a particular account, within a particular institution. IBANs can range from 16 characters long all the way to 29 characters, depending on the country.
SEPA
SEPA is an intra-European payments system that is harmonizing the payments in Euro on the continent, making them the equivalent of domestic payments for the sake of improving the general business environment on the continent. Expanding this abbreviation gives you Single Euro Payments Area. SEPA is currently evolving into SEPA Instant (or SCT Inst) and you can learn more here.
SWIFT
This is the communications network that is used to send international bank transfers. SWIFT stands for Society of Worldwide Interbank Financial Telecommunication and is a system for sending financial messages between participating financial institutions.
PSD2
The Second Payment Services Directive is a European directive that regulates payment services and providers within the EU/EEA. It’s an upgrade to the initial PSD which went live in 2009 with the aim of stimulating competition in banking, improving the quality of financial services and protecting the consumers. In 2018, the upgraded PSD2 paved the way to open banking. It also banned additional charges on card payments and aimed to restore consumer confidence in purchasing services and goods online by making payment processors implement the Strong Customer Authentication.
P2P transactions
The term refers to peer-to-peer transfer of funds or money transferred between users of the same financial institution. In iCard, P2P works instantly and for free, letting people transfer money via iCard Messenger, QR codes or by using an email or phone number as the identifier, rather than an IBAN account. For example, sending money to a family member with an iCard account is a P2P transfer.
SaaS
Short for Software as a Service, the term points to a model for software distribution where apps are hosted by the provider. SaaS refers to software systems that are accessed via the internet – from a desktop or laptop’s web browser or from a mobile device.
PAN
In the cards industry, it refers to Primary Account Number – the 16-digit card number that identifies the card network (VISA, Mastercard or other), the issuing bank and the cardholder.
CVC/CVV
Both acronyms are often used interchangeably. Expanding them gives you Card Verification Code (CVC) and Card Verification Value (CVV). These are the 3-digit number, usually found on the back of your debit/credit card – next to the now obsolete signature zone. VISA and Mastercard allow printing the CVC/CVV on the front of the card since 2019. Providing the 3-digit value during online transactions serves as proof of the payment card’s authenticity.
NFC
Near-field communication, as implied by the name, enables communication from a short distance between compatible devices. One of them is the transmitter (the NFC chip or tag) and the other one is the receiver (antenna). The receivers in modern mobile phones can behave like a chip, for example in mobile payments, and as a reader. Contactless debit cards have embedded NFC chips that are sending payment information to the POS terminal.
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Did we miss any terms? Let us know in the comments below.
Getting all the way down here means that you now have a richer fintech vocabulary. Keep staying up to date with technology because this is the best way to have your money and identity protected online.
And iCard digital wallet can be the additional security layer for your finances, especially if you switch on unlocking it with a fingerprint or FaceID.
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