Yaspa open banking glossary

Open banking glossary 

Every industry has their own unique terminology and abbreviations, particularly with distinct processes, tools, and regulations - this emphasises the necessity for specialised glossaries. The world of world finance and ‘open banking’ is no different. Explore our open banking glossary here for comprehensive definitions and explanations of essential open banking terms!

Open banking in layman terms

‍Open banking is intricately connected to Fintech and this is why our open banking glossary will also include financial terminology, as well as crucial details about the underlying technology. Another common aspect of ‘open banking’ is the number of abbreviations within the industry - these are typically crafted to condense lengthy terms and names related to regulations, tools, and services.

AIS

Account information service (AIS) - a service that accesses a customer's bank account to retrieve account information like transaction history and account holders’ personal information. AIS is enabled by PSD2. See how Yaspa uses AIS in our article, ‘Understanding payment verification types’.

API

API stands for Application Programming Interface. These programming interfaces are used by developers to connect software applications together. Yaspa provides APIs and web based payment journeys to allow merchants to take payments online. To understand this further, please read the following unverified pay-ins, verified pay-ins and verified payouts.

API key

An API key is a code used to identify and authenticate an application or user. Yaspa provides you with your own API keys, to find your API keys, read the following article ‘Finding your pay-in API Keys to make your first payment’.

Cryptocurrency

A form of digital currency where transactions are validated and records are upheld through a decentralised system employing cryptography, as opposed to being overseen by a centralised authority.

ePoS

ePoS stands for "electronic Point of Sale." It refers to a computerised system used in retail and hospitality businesses for processing transactions, managing inventory, and handling sales data. ePoS systems often include hardware like barcode scanners and card readers, as well as software that helps streamline and automate various aspects of the sales process.

FCA

FCA stands for The Financial Conduct Authority. The FCA is the financial regulatory body in the United Kingdom. Yaspa is compliant with FCA regulations.

Fiat currency

Fiat currency refers to a type of currency that a government has declared to be legal tender, not backed by a physical commodity like gold or silver, but rather by the government's authority and the trust of the people in the currency's value.

FPS

FPS stands for Faster Payment System. A UK-based scheme launched in 2008 to move money almost instantly between financial institutions. However, in some situations it can take a little longer, see more on this here.

KYC

KYC, or "Know Your Customer," is a process used by businesses and financial institutions to verify and understand the identity of their clients or customers. This procedure involves collecting and assessing information about individuals to ensure compliance with regulatory requirements and to mitigate the risk of fraud, money laundering, or other illicit activities. KYC typically involves the verification of identity documents, such as government-issued IDs or passports, and the gathering of additional relevant information about the customer's background and financial activities.

OBL

OBL (formerly OBIE) stands for Open Banking Limited (OBL). The organisation that coordinates open banking in the UK.

Open banking

Giving third party companies (like Yaspa) free, permission-based access to customer’s bank account data. It’s the technical and legal basis of the services we provide, and implemented by the OBL in the UK. For more information about this and how we it, read our article on open banking.

Open finance

Open finance extends the principles of open banking to encompass a broader array of financial services (i.e. mortgages, pensions, etc), promoting innovation and user control over financial data.

PIS

Payment initiation service (PIS) - a service that accesses a customer's payment account directly to initiate a transfer of funds (payment) directly. PIS is enabled by PSD2. See how Yaspa uses PIS in our article, ‘Understanding payment verification type’.

PoS

PoS stands for "Point of Sale." It is the location where a retail transaction is completed. This can be a physical place, such as a cash register or checkout counter in a store, or it can refer to the virtual point of sale in an online transaction. The term is commonly used to describe both the physical hardware and software systems used to process sales transactions and manage inventory in retail businesses.

PSD2

PSD2 stands for Payment Services Directive Two. European Union legislation (from 2018) that aims to modernise payment services in Europe. This is the law that makes open banking possible. PDS3 is the next iteration of this, and is expected to b implemented by 2026. You can read more about PDS3 here.

SCT

SCT stands for SEPA credit transfer. One-time funds transfers between banks that both have IBAN codes. These typically take between 1 to 3 days to clear and settle.

SCT Inst

SCT Inst stands for ‘SEPA Instant Credit Transfer’. SCT Inst allows the transfer of money in Europe, up to 100,000 euro, to another account in less than 10 seconds, 24/7/365.

SEPA

SEPA stands for ‘Single Euro Payments Area’.

The single euro payments area (SEPA) is a system of transactions created by the European Union (EU).

TPP

A Third-Party Provider (TPP) is an external entity or organisation that offers financial services or products, typically in the context of open banking. These providers operate independently from the financial institutions that hold customers' accounts. In the realm of open banking, TPPs are authorised to access financial data or initiate transactions on behalf of users with their explicit consent. This concept is often associated with the evolution of financial technology and the opening up of banking systems to foster innovation and competition.

vIBAN

vIBAN, short for Virtual International Bank Account Number, serves as an identifier for international bank transactions. These virtual sub-accounts are associated with a primary physical bank account, facilitating the sending and receiving of international payments. See more about Yaspa’s Virtual Accounts product here.

VRPs

Variable recurring payments (VRPs), utilising open banking tech, enhance the experience for both businesses and consumers. By merging card-on-file, direct debits, and standing orders, VRPs enable users to securely and easily establish recurring payments of varying amounts.