Nestor G Pestelos Jr · Writing

Payments Glossary

Published August 18, 2026

TL;DR

Word list for the rest of this series. Each heading is a stable address on this site. InstaPay is not RTGS. A card authorization is not a transfer.

I am writing a series about how money moves. Later pieces will say InstaPay, authorization, or PSP and need one public address to point at. This is that page. It is a word list. It is not a history of payments and not a vendor comparison.

Contents

Parties: cardholder · merchant · acquirer · issuing bank · card network · four-party model · payment gateway · processor · payment service provider · ActiveMerchant

Lifecycle: authorization · capture · settlement · void and refund · card-present · card-not-present · chargeback · interchange fee · scheme fee

Security: AVS and CVC · 3-D Secure · PAN · PCI DSS · QSA and SAQ

US rails: Federal Reserve payment system · Reserve Bank · ACH · FedACH and EPN · Nacha · Same-Day ACH · check presentment · RTGS · Fedwire · FedNow

PH rails: InstaPay · PESONet · PhilPaSSplus · PhilPaSS · QR Ph · InstaPay QR · PDDTS · PhP-USD PvP · NRPS · PPMI · BancNet · PCHC · PNPI · RA 11127 · ODPS

Parties

Cardholder

The person who holds the card and starts the purchase.

Merchant

The party selling goods or services and receiving payment.

Acquirer

The merchant's bank, or a processor working for that bank. It brings the merchant into the card network.

Issuing bank

The cardholder's bank. It approves or declines each authorization request.

Card network

The switch and the rulebook between acquirer and issuer. Visa, Mastercard, Discover, American Express. It is usually not the issuer and not the merchant bank.

Four-party model

Cardholder, merchant, acquirer, and issuer, with the network between acquirer and issuer. Open networks use this shape. Classic American Express issued and acquired itself.

Payment gateway

Software that encrypts card data on the merchant side and sends it toward the acquirer.

Processor

The party that talks to the card networks on the acquirer's behalf. Gateway and acquirer are often the same vendor. The three jobs remain even then.

Payment service provider

A Stripe-class vendor that sells gateway, processor, and acquirer as one API and one payout.

ActiveMerchant

A Ruby library extracted from Shopify. One interface (authorize / capture, integer cents) over many gateways with incompatible internals. In production since June 2006.

Lifecycle

Authorization

The issuer's seconds-long promise to pay. It places a hold. It is not a transfer.

Capture

The later instruction to take the held funds. Hotels, fuel pumps, and ship-later checkouts split this from authorization because the final amount is not known at hold time.

Settlement

The issuer pays the acquirer through the network. The merchant is funded, minus fees. Card settlement is typically one to three business days.

Void and refund

A void cancels an uncaptured hold. A refund reverses a completed capture. Both are different messages from capture.

Card-present

A chip, swipe, or tap at a reader.

Card-not-present

Neither the plastic nor the cardholder is at a reader, and no PIN is entered. Web checkout, mail or telephone order, card-on-file, and subscriptions are in this class.

Chargeback

A dispute the true cardholder files with the issuer. Network rules usually favor that cardholder. On a card-not-present sale the merchant usually loses the goods or service, the sale amount, and a fee.

Interchange fee

The largest piece of card cost. Paid to the issuer.

Scheme fee

Paid to the card network for authorization, cross-border handling, and other network services.

Security

AVS and CVC

Address Verification Service checks the billing address. CVC is the three- or four-digit code on the card. Both shrink some card-not-present fraud. Neither proves the shopper is the cardholder.

3-D Secure

EMV 3-D Secure lets the merchant and issuer exchange device and transaction data so the issuer can authenticate the shopper. Many payments pass with no extra prompt. Higher-risk ones get a challenge.

PAN

Primary account number. The card number. The value PCI scope reduction keeps off merchant servers.

PCI DSS

Payment Card Industry Data Security Standard. Baseline for anyone who stores, processes, or transmits cardholder data. The Council writes it. Brands and acquirers enforce it. It is not a U.S. federal statute.

QSA and SAQ

A Qualified Security Assessor runs a point-in-time PCI assessment. A Self-Assessment Questionnaire is what a merchant files. The questionnaire shrinks when the PAN never touches the merchant's servers.

US rails

Federal Reserve payment system

The Fed's own list: currency, checks, ACH, and Fedwire. Card networks are not on it. A grocery swipe still happens. It rides a private switch.

Reserve Bank

One of twelve district operating arms of the Federal Reserve System. A bank for banks. It holds master accounts where depository institutions settle with each other.

ACH

Automated Clearing House. A nationwide U.S. batch network for bank-to-bank credits (payroll, tax refunds) and debits (bills). It pushes or pulls. It is not real time.

FedACH and EPN

The two operators that process ACH files: the Reserve Banks, and the Electronic Payments Network of The Clearing House.

Nacha

Writes the ACH Operating Rules. Does not process the transfers.

Same-Day ACH

FedACH SameDay processes an eligible ACH item on the current processing day if it hits a same-day deadline and is not future-dated. Standard ACH still settles on a later designated date. It is still a batch, not instant.

Check presentment

The paper-check collection process Reserve Banks run. Related to ACH. Not the same rail.

RTGS

Real-time gross settlement. Each transfer posts one by one, as it arrives, usually on a central-bank account. Final when posted. Not a net of many payments at the end of a cycle. Fedwire and PhilPaSSplus are RTGS systems. InstaPay is not. InstaPay nets participant obligations and settles those nets on the peso RTGS.

Fedwire

The Fed's large-value wholesale RTGS. Funds and securities. Banking hours.

FedNow

The Fed's instant public payment rail, launched in 2023. Complements ACH. Does not replace it. Does not replace the card switch.

PH rails

InstaPay

A real-time, low-value electronic fund transfer in Philippine pesos. Customers send between accounts at participating BSP-supervised banks and e-money issuers. Domestic only. Almost instant. Open 24x7, all year. Published FAQ cap: PHP 50,000 per transaction. The sender may pay a fee. The receiver is not charged and gets the full amount. Inter-participant nets are prefunded in BSP demand-deposit accounts and settled on the peso RTGS. That is not the same as settling each customer payment as RTGS.

PESONet

Same-day batch electronic fund transfer in pesos. No official per-transaction cap. Available 24/7 on banking days only. Typical uses: salaries, supplier payments, government collections.

PhilPaSSplus

BSP-owned peso RTGS. Successor to PhilPaSS in 2021. Settles large-value interbank transfers one by one, plus the net clearing results of check, ATM, InstaPay, and PESONet. Hours: 09:00 to 17:45, Monday to Friday.

PhilPaSS

Older name for the BSP peso RTGS. Still used in the published InstaPay FAQ.

QR Ph

National EMV QR standard. Not a designated settlement system. There is no QR Ph app. Person-to-person and person-to-merchant payments that use the code settle on InstaPay. The code is an address. The rail is InstaPay.

InstaPay QR

Person-to-person brand under the QR Ph standard after the July 2026 rebrand. QR Ph on the logo is person-to-merchant. Both still settle on InstaPay. BSP (as of 29 July 2026) says technical standards, operating rules, and infrastructure do not change.

PDDTS

Designated domestic-dollar transfer system. The Bankers Association of the Philippines established it. PCHC operates it on the inspected operators list.

PhP-USD PvP

Designated peso-dollar payment-versus-payment system. Same establishment and operator as PDDTS. The peso side links to the peso RTGS.

NRPS

National Retail Payment System. BSP policy framework (Monetary Board 2015; Circular 980, 6 November 2017). Not a BSP-owned retail switch. An industry body governs each automated clearing house.

PPMI

Philippine Payments Management Inc. The published InstaPay FAQ names it as the industry-led body that governs InstaPay under BSP oversight.

BancNet

Designated InstaPay operator on the inspected BSP operators list.

PCHC

Philippine Clearing House Corporation. Designated operator of PESONet, PDDTS, and PhP-USD PvP on that same list.

PNPI

Payments Network of the Philippines, Inc. BusinessWorld reported on 3 June 2026 that the SEC cleared the BancNet-PCHC merger, with BancNet surviving under this name from 1 June 2026. The inspected BSP operators list still names BancNet and PCHC separately.

RA 11127

National Payment Systems Act. Gives BSP payment-system oversight and the power to own and operate systems.

ODPS

Operator of a designated payment system. Needs prior BSP / Monetary Board authority.

Sources