Payment Terms Glossary

An authentication protocol for online card payments (called “Verified by Visa”, “Mastercard Identity Check”, etc.). Adds an extra step such as OTP or app approval to reduce fraud.

A direct bank-to-bank transfer of funds without using card networks. Often faster and cheaper than card payments. Example: sending money via your banking app straight from your account to a friend’s account.

South Africa’s original electronic clearing house for interbank payments, established in 1972. Precursor to BankservAfrica (now Pay Inc). Managed early EFTs and debit orders.

Debit orders that required account holder authentication (e.g. PIN entry) when signing the mandate. Mainly used for loans. Phased out in favour of DebiCheck.

Laws and controls designed to prevent criminals disguising illicit funds as legitimate. Banks must monitor and report suspicious transactions.

South Africa’s compliance framework under the Prudential Authority and FIC Act to prevent illicit finance and terrorism funding. Requires KYC, record-keeping and reporting.

A bank that processes card payments for merchants. It routes transaction requests via card schemes to issuing banks and deposits funds into the merchant account once approved.

Confirms that a bank account exists and belongs to the named person or business. Used to reduce fraud before collections or payouts.

The first 6–8 digits of a payment card number that identify the issuing bank and card type. Used for routing, risk checks and fraud prevention.

A short-term credit option that lets customers split purchases into instalments. Example: paying R1,200 in four monthly instalments of R300.

South Africa’s national clearing house until 2025, processing EFTs, debit orders, card and ATM transactions. Now renamed Pay Inc.

Processing multiple payments at once, reducing admin and fees. Example: a payroll run paying hundreds of employees in one batch.

Measures to stop money being channelled into terrorism. Implemented alongside AML obligations.

A forthcoming law to regulate fair treatment of customers and ethical conduct by financial firms. Complements prudential regulation by SARB.

An international standards body under the BIS that develops principles for safe and efficient payment systems. Influences SARB regulation.

The 3- or 4-digit code on a payment card, used to verify that the customer holds the card in card-not-present transactions.

Networks such as Visa, Mastercard and Amex that set the rules and provide infrastructure for card payments. All issuers, acquirers and PSPs must comply.

A reversal of a card transaction initiated by the issuing bank after a customer dispute (e.g. fraud or undelivered goods). Merchants may lose funds, pay a fee, and face penalties if ratios are high. Example: a R500 online purchase reversed after the customer claims non-delivery.

The percentage of transactions disputed as chargebacks. High ratios can trigger fines or loss of card acceptance rights.

Clearing is the exchange of payment instructions between banks (e.g. via Pay Inc). Settlement is the final transfer of funds (e.g. via SAMOS). Both are needed for money to move securely.

A third-party (often a payment orchestrator) nominated by a global merchant to process local payments and remit them abroad. Handles PCI DSS compliance but not tax or consumer obligations.

Payments made by tapping a card, phone or wearable at a POS terminal. Uses EMV chip and Near Field Communication. Popular for small-value payments.

A debit order system requiring customers to confirm details electronically with their bank before collections begin. Protects against unauthorised debits.

A recurring payment where a customer authorises a company to collect funds from their bank account. Common for bills and subscriptions.

An app or service that securely stores payment details and allows digital payments (e.g. Apple Pay, Google Pay, Capitec Pay).

An electronic bank-to-bank transfer. In South Africa, standard EFTs between banks usually clear in 1–2 days.

Global card security standard using chip technology. Supports chip-and-PIN and contactless (tap-to-pay) at POS.

An international body that sets AML/CFT standards. Greylisted South Africa in 2023, requiring compliance improvements.

South Africa’s financial intelligence unit. Collects and analyses suspicious transaction reports from banks and institutions.

South African law requiring institutions to verify customer identity, keep records, and report suspicious transactions.

Market conduct regulator. Ensures financial institutions treat customers fairly and maintain integrity.

A non-bank entity enabling merchants to accept and route payments globally via one platform. Connects to local PSPs, SOs or TPPPs.

A global payments messaging standard being adopted in South Africa. Provides richer, structured data and improves interoperability.

A local service enabling customers to pay merchants directly from their bank account via internet banking, offered by PSPs (e.g. PayFast, Ozow).

A fee paid by the acquiring bank to the issuing bank on each card transaction. Covers issuer costs and rewards. Ultimately borne by merchants.

The bank that provides a customer’s card and account. Approves or declines transactions, manages billing and disputes.

Africa’s largest stock exchange, providing a marketplace for companies to raise capital and for investors to trade securities.

The process of verifying customer identity, address and risk profile to prevent fraud and financial crime. Required under FICA.

A bank account that allows a business to accept card payments. Holds funds temporarily before settlement into the main account.

The legal entity responsible for a transaction, appearing on the customer’s statement. Assumes liability for refunds, chargebacks, tax and compliance.

Debit orders processed early in the day with “tracking” retries if funds weren’t available. Phased out in favour of DebiCheck.

Law promoting responsible lending and protecting consumers in credit agreements. Establishes disclosure rules and limits interest rates.

Enforces the National Credit Act. Registers and supervises credit providers, bureaus and debt counsellors.

The infrastructure, institutions and rules that let money move securely between banks, merchants and consumers. Overseen by SARB.

A unique code (often via SMS or app) used once to verify a transaction or login. Widely used in online payments.

Industry body recognised by SARB to manage participation in the payment system. Administers Payment Clearing Houses (PCHs), sets rules and sponsors System Operators.

Industry arrangements under PASA that govern how specific payment streams (like EFT or debit orders) are cleared between banks.

Global security standards protecting cardholder data. Merchants and PSPs handling card details must comply or risk fines and losing card acceptance.

SARB’s programme to upgrade national payment systems with new standards, real-time capabilities and broader access. Includes RPP.

A secret code used to verify card transactions. Example: entering your 4-digit PIN at an ATM.

South Africa’s data protection law, requiring organisations to collect, use and store data responsibly and securely.

A company that enables merchants to accept multiple payment methods (cards, EFTs, wallets) via one platform. Usually bundles a gateway.

The new name of BankservAfrica (2025). South Africa’s clearing house for EFTs, debit orders, card and instant payments. Leads modernisation projects like RPP, PayShap and TCIB.

South Africa’s 24/7 instant, low-value payment service (launched 2023). Allows transfers between banks using a ShapID (like a cellphone number). Bank-specific limits apply.

A platform that securely transmits customer payment details to banks for authorisation. Acts as the digital “card machine” for online stores. Works closely with PSPs.

The place and technology where a sale occurs. In shops this is the card machine; online it’s the checkout page.

A division of SARB supervising banks, insurers and financial market infrastructures to ensure stability.

A service for near-instant interbank transfers, typically for higher-value payments. Usually charged at a premium fee.

The national initiative behind PayShap, led by SARB and Pay Inc. Provides infrastructure for instant, low-value payments across all banks.

An upcoming service under RPP allowing businesses or individuals to send digital payment requests that customers can approve in real time.

A bloc of 16 countries, including SA, working on economic and financial integration. Supports initiatives like TCIB for regional payments.

SARB’s real-time gross settlement system for high-value interbank payments. Provides final, irrevocable settlement.

South Africa’s central bank. Issues currency, sets monetary policy, regulates financial stability and operates SAMOS.

A security method requiring two factors (e.g. PIN + OTP, or card + fingerprint) to reduce fraud in digital payments.

A registered non-bank provider that routes payment instructions between customers, merchants and banks. Unlike TPPPs, SOs do not hold funds.

Global messaging network for international bank transfers. Used by South African banks for cross-border payments.

Fees charged by card schemes (Visa, Mastercard, etc.) to acquirers and issuers for using their networks. Passed on to merchants in processing costs.

A SADC initiative enabling instant, low-value cross-border payments between member countries. Example: sending money from SA to Lesotho in minutes.

A licensed non-bank entity that can collect and distribute funds on behalf of merchants. Unlike SOs, TPPPs may hold client funds temporarily.

A security method where sensitive card data is replaced by a random “token” that can be safely stored or transmitted. Common in mobile wallets like Apple Pay.