Glossary of terms
Here you'll find a comprehensive list of terms and definitions relevant to Omega.
Anti-Money Laundering (AML)
AML is a term primarily used in legal and financial industries to describe a set of procedures, regulations, or legal controls designed to detect, prevent and report money laundering. Money laundering involves generating a source of income through illegal actions.
Application Programming Interface (API)
API is a general term for programming techniques available for software developers when they integrate with a particular service or application. The exact software type of these techniques varies and may include web API, remote API, SDKs, libraries, frameworks, and others.
In the payments industry, APIs are traditionally provided by any party participating in the money flow (e.g., payment gateways, processors, and service providers) to facilitate the money-transferring process.
Bankers' Automated Clearing System (BACS)
BACS provides the system for the clearing and settlement of UK automated payment methods. These include direct debit and BACS direct credit payments. Payments sent via this method take up to three working days to officially clear.
Bank Identifier Code (BIC)
BICs are often referred to as a SWIFT code or SWIFT address, as SWIFT owns and administers the BIC system.
Bank Identification Number (BIN)
The first six to eight digits of a card number are known as the BIN. In some situations, these numbers will alternatively be referred to as the Issuer Identification Number (IIN).
These numbers can be used to quickly determine the card network and issuing financial institution.
Primary Account Number (PAN)
Every payment card has a unique number associated with it. This number is usually printed on the card and is required to uniquely identify and refer to the said card in every transaction. The complete card number is called PAN, and the first six digits of it are known as the BIN. A card may also contain a security code, which can be used alongside the PAN in card-not-present transactions.
Debit
A charge to an account. Virtually any amount withdrawn directly from an account is referred to as a debit.
Declined transaction
The transaction request has been refused, usually by the issuing bank. In some cases, other entities along the processing chain will decline the card independently. Cards are most commonly declined due to insufficient funds, but sometimes fraud or theft can cause a card to be declined. The stated reason for the card being declined is coded for return along with the decline.
Deposit account
A financial account that consists of a balance of funds rather than a line of credit. Examples include checking, savings, and share-draft accounts.
Electronic Money Institution (EMI)
An Electronic Money Institution is a financial institution that is authorised to issue electronic money and provide payment services such as domestic and international electronic funds transfers and can provide bank accounts and e-wallets. EMIs are similar to banks except they are not allowed to lend money.
Faster Payments Service (FPS)
These are electronic payments for GBP-to-GBP account payments. As long as both the sending and receiving bank use Faster Payments, the payment will arrive almost immediately.
Note: In rare circumstances, FPS payments can take up to two hours.
Foreign exchange (FX)
FX is the exchange or conversion of one currency to another. It also refers to the global trading market whereby currencies are virtually exchanged around the clock, with the largest centres being based in London, New York, Tokyo, and Singapore.
International Bank Account Number (IBAN)
An IBAN is an account number written in a standardised, internationally recognised format used to identify an individual account. IBANs make it faster and easier to process cross-border transactions across Europe. An IBAN consists of a code that identifies the country, bank, and account to which the number is connected.
Know Your Business (KYB)
KYB is a mandatory banking regulation designed to protect the integrity of the banking system by reducing the likelihood of financial institutions becoming vehicles for money laundering, financiers of terrorism, or other unlawful activities. To mitigate risk, financial institutions perform KYB checks by obtaining sufficient information that can be used to develop a comprehensive profile of the business and the customer, such as a proof-of-company document and photographic identification.
Know Your Customer (KYC)
Know Your Customer guidelines and regulations in financial services require professionals to verify the identity, suitability, and risks involved with maintaining a business relationship with a customer. The procedures fit within the broader scope of anti-money laundering and counter-terrorism financing regulations.
Directive on Payment Services or Payment Service Directive (PSD)
The PSD was founded in 2007 and is a piece of EU legislation that provides the legal foundation for several important platforms. These include creating a single market for payments across the Eurozone and the necessary legal foundation for the Single Euro Payments Area (SEPA).
The introduction of PSD has made cross-border payments faster and easier, with SEPA payments being used to make transfers across most of Europe. Another key benefit of the PSD is that it is designed to improve competition by opening up payment markets to new entrants, providing greater efficiency and cost reduction for end-users.
Revised Directive on Payment Services or Payment Services Directive II (PSD2)
The PSD2 builds on the existing PSD and has been developed to make certain provisions in the original PSD clearer. This revised directive also emphasises opening the payments industry to third-party businesses and non-banks to increase competition further.
Single Euro Payments Area (SEPA)
SEPA is a European payment initiative introduced to establish a single payment market, making it simpler and less costly for consumers and businesses to make and receive payments across Europe. SEPA payments are available in 35 countries and provide cross-border bank transfer capabilities for businesses, merchants, and consumers in a way equivalent to making a domestic payment.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT)
SWIFT was founded in 1973 and is a cooperative utility that initially consisted of 239 banks from 15 countries. The original goal was to develop standardised messaging and the processing of transaction services for financial institutions globally, making global cross-border transfers possible.
SWIFT is often considered the backbone of the international finance industry and now serves more than 200 countries and territories worldwide. SWIFT payments are a type of international transfer sent via the SWIFT network; however, SWIFT doesn't facilitate funds transfer. Instead, it sends payment orders via its secure and reliable network, which must then be settled by the correspondent accounts that institutions each possess. When sending or receiving international payments, a SWIFT code is used to identify a specific bank.
What is an account number?
An account number is a number that is tied to your bank account. If you have several bank accounts, such as a personal account, joint account, or business account, each account will have a different account number.
What is a sort code?
A sort code is a six-digit number that identifies your bank. The sort code is usually split into pairs; the first two digits identify which bank the account is associated with, and the last four digits refer to the specific branch of that bank (where you first opened the account).