Glossary
Third-party business arrangements of banks and non-bank payment service providers that are typically local entities, such as small shops, to provide basic payment and transaction account-related services on their behalf.
An Application Programming Interface (API) allows software programs to interact by exchanging data which can prompt certain actions such as making a transaction. There are four main categories of APIs: payment APIs, which help third parties make and receive payments; data APIs, which share individual (with proper customer consent) and aggregate data with third parties, enabling them, for example, to better understand the risk profiles of individuals; “ecosystem expansion” APIs, which enable loan origination or account creation; and “consent and identity” APIs that facilitate KYC, enable sharing of data and/or movement of money by third parties.
An electronic clearing system in which payment orders are exchanged among financial institutions, primarily via magnetic media or telecommunications networks, and then cleared amongst the participants. All operations are handled by a data processing center. An ACH typically clears credit transfers and debit transfers, and in some cases also cheques.
A digital financial services business model in which the bank is the primary driver of the product or service, typically taking the lead in marketing, branding and managing the customer relationship.
A bank account that is typically focused on payment services and characterized by low-cost and no-frill features. These accounts are often offered in combination with a debit card.
Refers to extremely large and complex sets of structured, semi structured, and unstructured data that cannot be managed, processed, or analyzed easily using traditional data-processing techniques. It typically involves high volumes of data generated from various sources, such as social media, sensors, transaction records, and digital devices.
A particular type of data structure used in some distributed ledgers which stores and transmits data in packages called “blocks” that are connected to each other in a digital ‘chain’. Blockchains employ cryptographic and algorithmic methods to record and synchronize data across a network in an immutable manner.
Comprises the facts about a customer that should enable an organization to assess the extent to which the customer exposes it to a range of risks. These risks include money laundering and terrorist financing.
An FSP that delivers DFS to customers. In this guide, the term DFS provider excludes traditional financial-sector intermediaries, such as banks and insurance companies, unless stated otherwise. It can include e-money issuers, fintech firms, and other regulated entities delivering DFS.
Can mean a digital representation of either virtual currency (non-fiat) or e-money (fiat) and thus is often used interchangeably with the term “virtual currency.”
The use of digital financial services to advance financial inclusion. It involves the deployment of digital means to reach financially excluded and underserved populations with a range of formal financial services suited to their needs, delivered responsibly at a cost affordable to customers and sustainable for providers.
Refers to the ability to read and navigate digital content autonomously, and the competence and knowledge required to access and use digital products and services, such as mobile phones, tablets, or the internet (FinEquity 2021).
Financial products and services, including payments, transfers, savings, credit, insurance, securities, financial planning and account statements that are delivered via digital/electronic technology such as e-money (initiated either online or on a mobile phone), payment cards and a regular bank account.
A set of electronically captured and stored attributes and credentials that can uniquely identify a person.
Distributed ledgers use independent computers (referred to as nodes) to record, share and synchronize transactions in their respective electronic ledgers (instead of keeping data centralized as in a traditional ledger). Blockchain is one type of a distributed ledger which organizes data into blocks, which are chained together in an append only mode.
E-money is a record of funds or value available to a consumer stored on a payment device such as chip, prepaid cards, mobile phones or on computer systems as a non-traditional account with a banking or non-banking entity.
E-Money product, where the record of funds is stored on a particular device, typically in an IC chip on a card or mobile phone.
An infrastructure focused on clearing and/or settlement of fast payments for its participants, where “fast payment” is defined as a payment in which the transmission of the payment message and the availability of “final” funds to the payee occur in real time or near-real time on as near to a 24-hour and seven-day (24/7) basis as possible.
The uptake and usage of a range of appropriate financial products and services by individuals and MSMEs (micro, small, and medium enterprises), provided in a manner that is accessible and safe to the consumer and sustainable to the provider.
A multilateral system among participating institutions, including the operator of the system, used for the purposes of clearing, settling, or recording payments, securities, derivatives, or other financial transactions.
The advances in technology that have the potential to transform the provision of financial services spurring the development of new business models, applications, processes, and products.
A broad term that encompasses the use of technology to innovate and transform various aspects of the financial industry. Fintech utilizes digital technologies such as data analytics, quantum computing, cloud services, machine learning, artificial intelligence, and distributed ledger technology to enhance financial activities.
The amount of funds withdrawn from the account of the payer but not reflected immediately in the account of the payee. In the e-money context, float is typically referred to as the total value of outstanding customer funds.
Banking services that customers may access via the internet. The access to the internet could be through a computer, mobile phone, or any other suitable device.
A situation in which payment instruments belonging to a given scheme may be used in platforms developed by other schemes, including in different countries. Interoperability requires technical compatibility between systems but can only take effect where commercial agreements have been concluded between the schemes concerned.
Regulation that requires all financial institutions to ensure that they validate the identity of all of their clients.
E-money product where the record of funds is stored on the mobile phone or a central computer system, and which can be drawn down through specific payment instructions to be issued from the bearers’ mobile phone. Also known as m-money.
Hardware and software that enables the provision of a mobile money service.
A company that has a government-issued license to provide telecommunications services through mobile devices.
A type of e-payment, where the payment instrument used is a mobile money product. Mobile money is a type of e-money product where the record of funds is stored on the mobile phone or a central computer system, and which can be drawn down through specific payment instructions to be issued from the bearers’ mobile phone.
A non-deposit taking payment service provider where the service involves payment per transfer (or possibly payment for a set or series of transfers) by the sender to the payment service provider (for example by cash or bank transfer) – i.e. as opposed to a situation where the payment service providers debits an account held by the sender at the payment service provider.
A digital financial services business model in which the non-bank (usually an MNO) is the primary driver of the product or service, typically taking the lead in marketing, branding and managing the customer relationship.
E-money product where the record of funds is stored on a central computer system, and which can be drawn down through accessing this central computer system via Internet connection via a variety of devices (e.g., desktop PC, laptop, tablet, smart-phone).
The sharing and leveraging of customer-permissioned data by banks with third party developers and firms to build applications and services, including for example those that provide real-time payments, greater financial transparency options for account holders, marketing and cross-selling opportunities.
Services in which a mobile money agent performs the transactions on behalf of the customer, who does not need to have a mobile money account to use the service.
An entity that provides payment services, including remittances. Payment service providers include banks and other deposit-taking institutions, as well as specialized entities such as money transfer operators and e-money issuers.
Payment card provided in exchange of prior deposit of funds specifically for use through this card product.
Quick response (QR) codes are two-dimensional barcodes that contain information that consumers or merchants can scan using the camera on their smartphones.
The real-time settlement of payments, transfer instructions, or other obligations individually on a transaction-by-transaction basis.
The use of technology to facilitate and enhance regulatory compliance.
Regulatory approach that aims to create a ‘safe space’ in which businesses can test innovative products, services, business models and delivery mechanisms in a live environment without immediately incurring all the normal regulatory consequences of engaging in the activity in question.
A regulatory approach that aims to create a safe space in which businesses can test innovative products, services, business models, and delivery mechanisms in a live environment without immediately incurring all the normal regulatory consequences of engaging in the activity in question.
The use of technology to facilitate and enhance supervisory processes from the perspective of supervisory authorities. This differs from Regtech, as Suptech is not focused on assisting with compliance with laws and regulations, but on supporting supervisory agencies in their assessment of that compliance.
Account by held by non-bank payment service provider issuing e-money with a deposit- taking institution to deposit the outstanding e-money float.
