Glossary Of DFS Terms

Ecosystem

Term	Alternative & Related Terms	Definition
Digital Financial Services Ecosystem		The Digital Financial Services ecosystem consists of users (consumers, businesses, government agencies and other enterprises) who have needs for digital financial products and services; the providers (both banks and non-banks) who supply those products and services through digital means; the financial, technical, and other infrastructures that make them possible; and the governmental policies, laws and regulations which enable them to be delivered in an accessible, affordable, and safe manner. The DFS ecosystem aims to support all people and enterprises within a country, and should support national goals including financial inclusion, economic health, and the stability and integrity of the financial systems.
Digital Financial Services	Mobile Financial Services	Digital financial services include methods to electronically store and transfer funds; to make and receive payments; to borrow, save, insure and invest; and to manage a person's or enterprise's finances.
Digital Liquidity		A state in which a consumer willing to leave funds (eMoney or bank deposits) in electronic form, rather than performing a "cash-out".
Financial Inclusion		The sustainable provision of affordable digital financial services that bring the poor into the formal economy.
FinTech		A term that refers to the companies providing software, services, and products for digital financial services: often used in reference to newer technologies.
Bank Led Model	Bank Centric Model	A reference to a system in which banks are the primary providers of digital financial services to end users. National law may require this.
Non-Bank Led Model	MNO Led Model	A reference to a system in which non-banks are the providers of digital financial services to end users. Non-banks typically need to meet criteria established by national law and enforced by regulators.
Identity	National Identity, Financial Identity	A credential of some sort that identifies an end user. National identities are issued by national governments. In some countries a financial identity is issued by financial service providers.
mCommerce	eCommerce	Refers to buying or selling in a remote fashion: by phone or tablet (mCommerce) or by computer (eCommerce)
Unbanked	Underbanked, Underserved	Unbanked people do not have a bank account. Underbanked people may have a bank account but do not actively use it. Underserved is a broad term referring to people who are the targets of financial inclusion initiatives.
Financial Literacy		Consumers and businesses having essential financial skills, such as preparing a family budget or an understanding of concepts such as the time value of money, the use of a DFS product or service, or the ability to apply for such a service.

Accounts

Term	Alternative & Related Terms	Definition
eMoney	eFloat, Float, Mobile Money, Electronic Money	The electronic value that is recorded in an end user's account. This term is used when non-banks are the providers of the account. eMoney is an obligation of the provider to the account holder. The balance in the account is also sometimes referred to as "eFloat" or "Float".
Access Point		Places or capabilities that are used to initiate a payment. Access points can include bank branch offices, ATMs, terminals at the POS, agent's offices, mobile phones, and computers.
Liquidity	Agent liquidity	The availability of liquid assets to support an obligation. Banks and non-bank providers need liquidity to meet their obligations. Agents need liquidity to meet cash-out transactions by consumers and small merchants.
Float		This term can mean a variety of different things. In banking, float is created when one party's account is debited or credited at a different time than the counterparty to the transaction. eMoney, as an obligation of a non-bank provider, is sometimes referred to as float.
Escrow	Funds Isolation, Funds Safeguarding, Custodian Account, Trust Account.	A means of holding funds for the benefit of another party. eMoney Issuers are usually required by law to hold the value of end users' eMoney accounts at a bank, typically in a Trust Account. This accomplishes the goals of funds isolation and funds safeguarding.
Deposit Guarantee System	Deposit Insurance	A fund that insures the deposits of account holders at a provider; often a government function used specifically for bank accounts.
Bundling	Packaging, Tying	A business model in which a provider which groups a collection of services into one product which an end user agrees to buy or use.

Payments

Term	Alternative & Related Terms	Definition
Digital Payment	Mobile Payment, Electronic Funds Transfer	A broad term including any payment which is executed electronically. Includes payments which are initiated by mobile phone or computer. Card payments in some circumstances are considered to be digital payments. The term "mobile payment" is equally broad, and includes a wide variety of transaction types which in some way use a mobile phone.
Immediate Funds Transfer	Real Time	A digital payment which is received by the payee almost immediately upon the payer having initiated the transaction.
Pull Payments		A payment type which is initiated by the payee: typically a merchant or payment acceptor, whose provider "pulls" the funds out of the payer's account at the payer's provider.
Push Payments		A payment type which is initiated by the payer, who instructs their provider to debit their account and "push" the funds to the receiving payee at the payee's provider.
Open-Loop		A payment system or scheme designed for multiple providers to participate in. Payment system rules or national law may restrict participation to certain classees of providers.
Closed-Loop		A payment system used by a single provider, or a very tightly constrained group of providers.
Interoperability	Interconnectivity	The ability to exchange payments transactions between and among providers. This can be done by providers participating in a scheme, or by a variety of bilateral or multilateral arrangements. Both technical and business rules issues need to be resolved for interoperability to work.
Interchange		A structure within some payments schemes which requires one provider to pay the other provider a fee on certain transactions. Typically used in card schemes to effect payment of a fee from a merchant to a consumer's card issuing bank.
Fees		The payments assessed by a provider to their end user. This may either be a fixed fee, a percent-of-value fee, or a mixture. A Merchant Discount Fee is a fee charged by a Merchant Services Provider to a merchant for payments acceptance. Payments systems or schemes, as well as processors, also charge fees to their customer (typically the provider.)
Ubiquity		The ability of a payer to reach any (or most) payees in their country, regardless of the provider affiliation of the receiving payee. Requires some type of interoperability.
Rules		The private operating rules of a payments scheme, which bind the direct participants (either providers, in an open-loop system, or end users, in a closed-loop system).
On Us Payments		Payments made in a multiple-participant system or scheme, where the payer's provider is the same entity as the payee's provider.

Risk Management

Term	Alternative & Related Terms	Defintion
Liability	Agent Liability, Issuer Liability, Acquirer Liability	A legal obligation of one party to another; required by either national law, payment scheme rules, or specific agreements by providers. Some scheme rules transfer liabilities for a transaction from one provider to another under certain conditions.
Irrevocable	Non-Repudiation	A transaction that cannot be "called back" by the payer; an irrevocable payment, once received by a payee, cannot be taken back by the payer.
Recourse		Rights given to an end user by law, private operating rules, or specific agreements by providers, allowing end users the ability to do certain things (sometimes revoking a transaction) in certain circumstances.
Fraud	Fraud Management, Fraud Detection, Fraud Prevention	Criminal use of digital financial services to take funds from another individual or business, or to damage that party in some other way.
Anti Money Laundering		Initiatives to detect and stop the use of financial systems to disguise use of funds criminally obtained.
Combatting Terrorist Financing		Initiatives to detect and stop the use of financial systems to transfer funds to terrorist organizations or people.
Arbitration		The use of an arbitrator, rather than courts, to resolve disputes.
Dispute Resolution		A process specified by a provider or by the rules of a payment scheme to resolve issues between end users and providers, or between an end user and its counter party.
Credit History	Credit Scoring	A set of records kept for an end user reflecting their use of credit, including borrowing and repayment.
Risk-based Approach		A regulatory approach that creates different levels of obligation based on the risk of the underlying transaction or customer.
Systemic Risk		In payments systems, the risk of collapse of an entire financial system or entire market, as opposed to risk associated with any one individual provider or end user.

Infrastructure

Term	Alternative & Related Terms	Definition
Automated Clearing House		A common payment system structure in countries. ACH's allow electronic transfers among participating banks. An ACH is a payments scheme; participants are governed by scheme rules.
Clearing House		A general term referring to any payment system and/or scheme in which transactions are exchanged among parties through the use of a centralized hub. The Clearing House may or may not handle transaction settlement among participants of the scheme.
Payment System	Payment Network, Money Transfer System	A general term referring to a type of payment transaction occuring in a country: one or more payment schemes may together form a payment system.
Platform	Payment Platform, Payment Platform Provider	A term used to describe the software or service used by a provider, a scheme, or a switch to manage end user accounts and to send and receive payment transactions.
Scheme		A specific payment system with a set of participating providers and governing rules. Schemes may or may not run switches.
Settlement System	Net Settlement, Gross Settlement, RTGS	A system by which participant providers in a payment system or scheme settle their financial obligations to each other relating to transactions processed. Settlement may occur on either a net (all transactions added up) or gross (each transaction individually) basis. An RTGS is a real time gross settlement system. Settlement systems may be run by payment schemes, as independent entities, or, frequently, by a central bank.
Switch		An entity which receives transactions from one provider and routes those transactions on to another provider. A switch may be owned or hired by a scheme, or be hired by individual providers. A switch will connect to a settlement system for inter-participant settlement.

Provided to Consumers

Term	Alternative & Related Terms	Definition
*Provided to Consumers*
Transaction Accounts		An account in which funds can be stored, and which supports making payments and receiving payments.
Bank Accounts and Transaction Services	Mobile Banking, Remote Banking, Digital Banking	A transaction account held at a bank. This account may be accessible by a mobile phone, in which case it is sometimes referred to as "mobile banking".
eMoney Accounts and Transaction Services	Digital Wallet, Mobile Wallet, Mobile Money Account	A transaction account held at a non-bank. The value in such an account is refrred to as eMoney.
Prepaid Cards		A transaction account typically held at a non-bank, and delivered to the end user in the form of a card, rather than a balance on a mobile phone. A network branded prepaid card can be used by the end user at any location that accepts that brand.
Savings Products		An account at either a bank or non-bank provider, which stores funds with the design of helping end users save money.
Loans	Microfinance, P2P Lending	Means by which end users can borrow money.
Investment Products		A variety of products which allow end users to put funds into investments other than a savings account.
Insurance Products		A variety of products which allow end user to insure assets or lives that they wish to protect.

Provided to Businesses

Term	Alternative & Related Terms	Definition
Merchant Payments Acceptance Services	Acquiring services	A service which enables a merchant or other payment acceptor to accept one or more types of electronic payments. The term "acquiring" is typically used in the card payments systems.
Bulk Payments Services		A service which allows a government agency or an enterprise to make payments to a large number of payees.
Government Payments Acceptance Services		Services which enable governments to collect taxes and fees from individuals and businesses.
Cross Border Trade Finance Services		Services which enable one business to sell or buy to businesses or individuals in other countries; may include management of payments transactions, data handling, and financing.

Use Cases

Term	Alternative & Related Terms	Definition
Funds Storage		Keeping funds in secure electronic format. May be a bank account or an eMoney account.
P2P- Person to Person		Making and receiving payments to another person
Domestic Remittance	Remote Domestic Transfer of Value	Making and receiving payments to another person in the same country.
International Remittance	Remote Cross-border Transfer of Value, Cross-Border Remittance	Making and receiving paymetns to another person in another country.
G2C - Government to Consumer	Bulk Payment	Making and receiving payments from a government to a consumer: benefits, cash transfers, salaries, pensions, etc.
B2C - Business to Consumer	Bulk Payment	Making and receiving payments from a business to a consumer: salaries, rebates, benefits, reimbursements, pensions, etc.
C2B - Consumer to Business		Making payments from a consumer to a business: the business is the "payment acceptor" or merchant.
Merchant payment - POS	Proximate Payments	Making a payment for a good or service in person ("face to face"); includes kiosks and vending machines.
Merchant payment - Remote	eCommerce Payment	Making a payment for a good or service remotely; transacting by phone, computer, etc.
Bill Payment		Making a payment for a recurring service, either in person ("face to face") or remotely.
C2G - Consumer to Government		Making a payment from a consumer to a government, for taxes, fees, etc.
B2B - Business to Business		Making a payment from one business to another for supplies, etc: may be in-person or remote, domestic or cross border. Includes cross-border trade.
B2G - Business to Government		Making a payment from a business to a government for taxes, fees, etc.
Saving		Keeping funds for future needs
Borrowing		Borrowing money to finance a short term or long term need
Provider	Financial Service Provider, Payment Service Provider, Digital Financial Services Provider	The entity that provides a digital financial service to an end user (either a consumer, a business, or a government.) In a closed-loop payment system, the Payment System Operator is also the provider. In an open-loop payment system, the providers are the banks or non-banks which participate in that system.
Bank	Savings Bank, Credit Union, Payments Bank	A charted financial system within a country that has the ability to accept deposits and make and receive payments into those accounts.
Non-Bank	Payments Institution	An entity that is not a chartered bank, but which is providing financial services to end users. The requirements of non-banks to do this, and the limitations of what they can do, are specified by national law.
eMoney Issuer	Issuer, Provider	A non-bank provider who deposits eMoney into an account they establish for an end user. eMoney can be created when the provider receives cash ("cash-in") from the end user (typically at an agent location) or when the provider receives a digital payment from another provider.
Merchant Service Provider	Acquirer	A provider (bank or non-bank) who supports merchants or other payments acceptors requirements to receive payments from customers. The term "acquirer" is used specifically in connection with acceptance of card payments transactions.
Regulator		A governmental organization given power through national law to set and enforce standards and practices. Central Banks, Finance and Treasury Departments, Telecommunications Regulators, and Consumer Protection Authorities are all regulators involved in digital financial services.
Standards Body	EMV, ISO, ITU, ANSI, GSMA	An organization that creates standards used by providers, payments schemes, and payments systems.
Merchant	Payments Acceptor	An enterprise which sells goods or services and receives payments for such goods or services.
Mobile Network Operator		An enterprise which sells mobile phone services, including voice and data communication.
Money Transfer Operator		A specialized provider of DFS who handles domestic and/or international remittances.
Participant		A provider who is a member of a payment scheme, and subject to that scheme's rules.
Payee	Receiver	The receipient of funds in a payment transaction.
Payer	Sender	The payer of funds in a payment transaction.
End User	Consumer, Customer, Merchant, Biller	The customer of a digital financial services provider: the customer may be a consumer, a merchant, a government, or another form of enterprise.
Active User		A term used by many providers in describing how many of their account holders are frequent users of their service.
Counterparty		The other side of a payment transaction. A payee is the counterparty to a payer, and vice-versa.
Payment System Operator	Mobile Money Operator, Payment Service Provider	The entity that owns a payment system or scheme. May or may not operate the switch used by the scheme.
Processor	Gateway	An enterprise that manages, on an out-sourced basis, various functions for a digital financial services provider. These functions may include transaction management, customer database management, and risk management. Processors may also do functions on behalf of payments systems, schemes, or switches.
Aggregator	Merchant Aggregator	A specialized form of a merchant services provider, who typically handles payments transactions for a large number of small merchants. Scheme rules often specify what aggregators are allowed to do.
Agent		An entity acting on behalf of a provider, handling various functions such as customer enrollment, cash-in and cash-out. Agents may work on behalf of bank or non-bank providers: national law dictates what is possible. Many agents also have other businesses and/or support other functions. Agents may be exclusive to one provider or work for many: again, national law may define what is possible.
Super Agent	Master agent	In some countries, agents are managed by Super Agents or Master Agents who are responsible for the actions of their agents to the provider.

Processes

Term	Alternative & Related Terms	Definition
Authentication	Verification, Validation	The process of ensuring that a person or a transaction is valid for the process (account opening, transaction initiation, etc.) being peformed.
Registration	Enrollment, Agent Registration	The process of opening a provider account. Separate processes are used for consumers, merchants agents, etc.
Authorization		A process used during a "pull" payment (such as a card payment), when the payee requests (through their provider) confirmation from the payer's bank that the transaction is good.
Cash-In		Receiving eMoney credit in exchange for physical cash - typically done at an agent.
Cash-Out		Receiving physical cash in exchange for a debit to an eMoney account - typically done at an agent.
Over The Counter Services		Services provided by agents when one end party does not have an eMoney account: the (remote) payer may pay the eMoney to the agent's account, who then pays cash to the non-account holding payee.
Posting	Clearing	The act of the provider of entering a debit or credit entry into the end user's account record.
Cash Management	Agent Liquidity Management	Management of cash balances at an agent.
Merchant Acquisition	Onboarding	The process of enabling a merchant for the receipt of electronic payments.
Know Your Customer	Agent and Customer Due Diligence, Tiered KYC	The process of identifying a new customer at the time of account opening, in compliance with law and regulation. The identification requirements may be lower for low value accounts ("Tiered KYC"). The term is also used in connection with regulatory requirements for a provider to understand, on an ongoing basis, who their customer is and how they are using their account.
Risk Management	Fraud Management	The practices that enterprises do to understand, detect, prevent, and manage various types of risks. Risk management occurs at providers, at payments systems and schemes, at processors, and at many merchants or payments acceptors.
Data Protection	PCI-DSS	The practices that enterprises do to protect end user data. "PCI-DSS" is a card industry standard for this.
Customer Database Management		The practices that providers do to manage customer data: this may be enabled by the payment platform the provider is using.

Technologies

Term	Alternative and Related Terms	Definition
Smart Phone		A device that combines a mobile phone with a computer.
Feature Phone		A mobile telephone with significant computational capabilities.
Short Message Service		A service for sending short messages between mobile phones.
USSD		A communication technology that is used to send text between a mobile phone and an application program in the network.
SIM Card	SIM ToolKit, Thin SIM	A smart card inside a cellular phone, carrying an identification number unique to the owner, storing personal data, and preventing operation if removed. A SIM Took Kit is a standard of the GSM system which enables various value-added services. A "Thin SIM" is an additional SIM card put in a mobile phone.
Chip Card	EMV Chip Card, Contactless Chip Card	A chip card contains a computer chip: it may be either contactless or contact (requires insertion into terminal). Global standards for chip cards are set by EMV.
Near Field Communication		A communication technology used within payments to transmit payment data from an NFC equipped mobile phone to a capable terminal.
Secure Element		A secure chip on a phone that can be used to store payment data.
HCE		A communication technology that enables payment data to be safely stored without using the Secure Element in the phone.
Point of Sale Device	Terminal, Acceptance Device, POS, mPOS	Any device meant specifically for managing the receipt of electronic payments.
Encryption		The process of encoding a message so that it can be read only by the sender and the intended recipient.
Application Program Interface		A software program that makes it possible for application programs to interact with each other and share data.
Biometric Authentication		The use of a physical characteristic of a person (fingerprint, IRIS, etc.) to authenticate that person.
Tokenization		The use of subsitute a token ("dummy numbers") in lieu of "real" numbers, to protect against the theft and misuse of the "real" numbers. Requires a capability to map the token to the "real" number.
Security Level		Security specification of the system which defines effectiveness of risk protection.

*A note on using this glossary: terms are grouped by category, rather than alphabetically. Search within the document to find the term you are looking for.

Bibliography

Alliance for Financial Inclusion (Mobile Financial Services Working Group) Mobile Financial Services - Basic Terminology, 2013
GSMA - Mobile Money for the Unbanked Glossary
BIS CPSS - A glossary of terms used in payments and settlement systems, 2003
PAFI Draft Report September 2015
Level One Project - Gates Foundation 2014
Electronic Transactions Association - Mobile Terminology Glossary
Mobey Forum - Mobile Financial Terms Explained, 2014
ITU ITU-T, Architecture of secure mobile financial transactions in next generation networks (Y.2741), Overview of Telecom Finance

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Glossary Of DFS Terms

Concepts

Ecosystem

Accounts

Payments