Glossary of Terms

The Faster Payments Task Force (FPTF) and Secure Payments Task Force (SPTF) are publishing this Glossary of Task Force Terms as a reference document for the use in connection with the work and activities of these two task forces. The Glossary of Task Force Terms is meant to provide the foundation for a common lexicon that can bridge some of the background gaps between task force participants of different industries. By compiling in one place the important terms and concepts associated with payments and the main task force deliverables from each task force, this publication aims to provide readers with a single and easily accessible source for definitions of standard task force terms.

Brief excerpts of this glossary may be reproduced provided the source is cited.

If you would like to submit definitions and terms for consideration, please email those to Terms and definitions will undergo a review and approval process by members of the Task Force and the Fed before they will appear in the Glossary of Task Force Terms.

AccessibilityAccessibility (N): The ability to enable any Entity to send and receive payments or payment related information to/from any other Entity.

Also used as Accessible (Adj).
AcceptanceThe receipt of a payment by the Payee or the Payee's Provider with the intention that the payment will not be rejected.
AccountA balance (deposit or credit) of funds recorded on an independent ledger that can be used by its owner to send or receive funds.
ApprovalThe point following the Initiation of a payment when the Payer's Depository Institution or Regulated Non-Bank Account Provider verifies that the Payer's Account has Good Funds necessary to complete the transaction.
AuthenticationAuthentication (N): The process that verifies the identity or veracity of a Participant, device, payment or message connected to a Payment System.

Also used as Authenticate (V).
AuthorizationAuthorization (N): The explicit instructions, including: timing, amount, Payee, source of funds and other conditions, given by the Payer to the Payee to transfer funds on a one-time or recurring basis.

Also used as Authorize (V).
Authorized ParticipantA Participant that has legal access to a payment Solution, payment network or payment service.
Cancellation of a PaymentThe act of causing a payment to no longer be processed as valid in the Payment System (e.g., payment is stopped or reversed).
ClearingThe process by which the Payer's and Payee's Depository Institutions or Regulated Non-Bank Account Providers exchange payment information to confirm transactions prior to Settlement, potentially including the netting of transactions and the establishment of final positions for Settlement.1
ComponentSee "Solution."
ConfidentialityThe set of rules and processes that appropriately limit access to and restrict the sharing of payment and/or other sensitive information (e.g. Personally Identifiable Information).
ConsumerA natural person that makes or receives a payment through the Payment System which payment is for personal, family, or household purposes.
CredentialA verifiable set of Data presented by a Participant to the Payment System as evidence of identity.
Credit PushSee "Push Payment."
CriteriaThe principles or standards by which something must (or will) be compared, judged or evaluated.
DataFacts, statistics, or elements of information that are created and/or recorded prior, during or after the use of a payment Solution related to enrolling in a Solution or participating in a payment transaction.
Debit PullSee "Pull Payment."
Depository InstitutionSee "Provider."
End UserEnd User (N): An Entity that uses a payment Solution, payment network, or payment service for the purpose of sending or receiving payments, such as a business or a Consumer.

Also used as End-User (Adj).
EntityA person, business, government agency, financial institution or other service provider.
Error ResolutionProcess of an investigation to determine whether or not an erroneous, unauthorized or Fraudulent transaction has occurred and if so, the corrective measures to be taken by the End User and/or Provider.
FIA financial institution, including Depository Institutions, credit unions, thrifts, savings and loans, etc.
FinalitySee "Irrevocability."
FrameworkThe rules, policies, and procedures that create the structure needed for payment operations to take place, and that define roles, responsibilities, and warranties of various Participants.
FraudFraud (N): An action taken with dishonest intent to take something valuable2 from a payment system Participant.
Fraudulent payments fall into four general categories:

  • First-party fraud: Fraud committed by an accountholder against another Entity. For example, a legitimate customer may dishonestly request a chargeback on a purchase after receiving the merchandise as agreed, or an individual may set up an Account (either using his or her own identity or a synthetic identity) to purchase items on credit without intending to pay the bill in full.
  • Second-party fraud: A transaction made or attempted by a trusted Entity that has access to the accountholder's payment Credentials. For example, a child may use a parent's credit card to make a purchase without the parent's consent.
  • Third-party fraud: A transaction made or attempted by an unknown Entity that is not Authorized by the accountholder to use a payment instrument to make a purchase, initiate funds transfers, or withdraw cash from his or her Account.3
  • Fraud in the inducement: Deceiving a Participant about the true terms of a transaction in order to mislead the Participant into making a purchase, transfer, or withdrawal that is to his or her disadvantage.4

Also used as Fraudulent (Adj).
Good FundsFunds in an Account that are unconditionally available and usable immediately by the owner of the Account.
InteroperabilityInteroperability (N): Ability to process Payment Instructions across Payment Systems or platforms. Requires the use of common standards and technical compatibility between systems.9

Also used as Interoperable (Adj) and Interoperate (V).
Initial ImplementationA baseline of core features that are available for general use by a minimum quantity of End Users and Providers.
InitiationInitiation (N): The Initiation of a payment begins when either the Payer or Payee in a payment transaction, or a third party, sends an instruction to another Entity that triggers a process ultimately leading to a payment. Initiation ends at the point when the Payer Authorizes a Payment Order, or in the case of pre-authorization, when the Provider confirms that pre-authorization exists for a given payment.

Also used as Initiate (V).
IrrevocabilityThe legal inability of the Payer's financial institution or agent to revoke a transfer of funds that is Authorized by the Payer.
Legal FrameworkAll legal sources applicable to a Payment System, including all public sector laws, regulations, other regulatory interpretations or rulings, court decisions and the Payment System Rules applicable to the Payment System.
Multi-currencyThe ability for the Payer or Payee to send or receive a payment denominated in a choice of more than one currency.
Multi-Factor AuthenticationThe use and validation of two or more factors for Authentication.

Authentication examples:
  1. Something the Participant knows (e.g., a personal identification number)

  2. Something the Participant has (e.g., a card or mobile device)

  3. Something that is an attribute of the Participant (e.g., a fingerprint)

Note: examples above are not intended to exhaustive.

Near Real-TimeOccurs close in time to the act of Initiating a Payment Order or Authorizing a payment but not necessarily immediately thereafter.
ParticipantAn Entity that interacts with the Payment System, such as a Consumer, a business, or a financial institution.
PartiesSee "Solution."
PayeeThe intended recipient of a payment.
Payment Order or Payment InstructionThe verifiable, signed collection of information created by the Payer and sent to the Provider Authorizing the transfer of funds from the Payer to Payee.
Payment SystemThe set of technologies, rules, practices and standards necessary for the functioning of the payment system and its services. 2
Payment System RulesThe rules, standards/protocols and procedures specific to and adopted by or for a Payment System. "Payment System Rules" also include any multi-lateral agreements executed by Entities. "Payment System Rules" do not include (but may reference aspects of) laws, regulations, other regulatory interpretations or rulings, or court decisions (see definition of "Legal Framework").
PayerThe sender of funds in a payment transaction; particularly the Entity that, prior to Settlement, owns the funds to be sent to the Payee.
Personally Identifiable Information (PII)Information which can be used to distinguish or trace an individual's identity such as the individual's name, email address, phone number, social security number, biometric information, and any other information defined to be PII by the Solution proposer.5
ProposalThe written document that provides a detailed description of a faster payments Solution, and demonstrates how it meets the Effectiveness Criteria for a faster payments Solution.
Proposal Work GroupA group formed to develop and revise a Proposal. It will be the responsibility of the workgroup to guide the Proposal through the Effectiveness Criteria review process.
ProviderDefined to include three categories of institutions/organizations:
  • Depository Institutions (any institution eligible for a Federal Reserve Account)

  • Regulated non-Bank Account Providers that are classified as money services businesses or money transmitters, or broker-dealers, and are subject to federal or state regulation

  • Third-party service providers (e.g., non-account holding providers of technology, software, network services, processing services, mobile wallets, equipment, security services, program managers, etc.)
PSPPayment Service Provider (See Provider).
Public Policy ObjectivesObjectives incorporated into a Payment System's design that promote safe, efficient, and Accessible payments with appropriate protections for End Users.6
Pull PaymentA payment made after prior Authorization by the Payer; the Payee sends the Payment Instruction to the Payee's Account to draw on funds from the Payer.
Push PaymentA payment made when the Payer sends the Payment Instruction to the Payer's Account to transfer the Payer's funds to the Payee.
Real-TimeImmediate/without delay.
ReconciliationA procedure to verify that two sets of records issued by two different Entities or two different systems involved in a transaction match.7 The Reconciliation process may include appropriate reversals and post-transaction analysis.
Regulated Non-Bank Account ProviderSee "Provider."
Regulated Non-Bank ProviderA non-bank Participant, such as a money services business, money transmitter, or broker-dealer, that sends and receives payments on behalf of Payers and Payees and is subject to federal and/or state regulation.
ResiliencyThe ability to prepare for and adapt to changing conditions and withstand and recover rapidly from disruptions. Resiliency includes the ability to withstand and recover from deliberate attacks, accidents, or naturally occurring threats or incidents.8
SettlementAn act that discharges obligations in respect of funds between two or more Entities. 10
SolutionThe collection of Components and supporting Parties that enable the end-to-end payment process. A faster payments Solution might include new Components, the adaptation of existing Components, and/or a combination of the two.

  • Components include any of the following:

    • Rules, standards/protocols, and procedures

    • Physical or technical infrastructure, networks, systems and other resources needed by all Parties to use or enable the rules, standards/protocols and procedures

    • Centralized or shared services, if any

    • Legal Framework and enforcement mechanisms

  • Parties include any of the following:

    • Governing bodies, operators, Depository Institutions, Regulated Non-Bank Account Providers and third-party service providers

Task Force Work GroupA group formed to undertake specific topics or assignments that are deemed to be of importance by the task force. Task Force Work Groups will generally be accountable for specific outputs or deliverable(s) to advance task force objectives.
TokenizationThe process of replacing sensitive Data (e.g., Account information) with unique identifiers (i.e., tokens) that either replace or mask attributes associated with the original Data set.
UbiquitousUbiquitous (Adj): A Payment System that can reach all Accounts to ensure that a Payer has the ability to pay any Entity.

Also used as Ubiquity (N).

1 Based on the definition provided by, Pg. 13.
2 See the definition provided by
3 Based on the definition of third-party fraud in the 2013 Federal Reserve Payments Study,, Pg. 32.
4 Based on the definition of fraud in the inducement provided by
5 Based on the definition of Personally Identifiable Information provided by
6 Based on goals set forth in the Federal Reserve’s Strategies for Improving the U.S. Payment System,
7 Based on the definition for reconciliation provided by
8 Based on the definition for resilience provided by
9 Based on the definition provided by, Pg. 27.
10 Based on the definition of “Settlement” found in, Pg. 45.