A–Z Guide to Financial Technology Terms
Fintech is changing how people and businesses save, borrow, invest, pay, transfer money, and access financial services. But the industry also comes with a growing vocabulary of technical terms, abbreviations, business models, and emerging concepts.
The FinTech Glossary explains important financial technology terms in simple language. From APIs and embedded finance to open banking, digital wallets, real-time payments, blockchain, and neobanks, this guide is designed to help readers understand the technologies and concepts shaping modern finance.
Whether you are a fintech professional, business owner, investor, student, or simply trying to understand a financial product, use this glossary as a starting point for exploring the fintech ecosystem.
What Is FinTech?
FinTech, short for financial technology, refers to the use of technology to create, improve, automate, or deliver financial products and services.
Fintech includes a broad range of technologies and businesses, including digital payments, online banking, mobile wallets, lending platforms, investment apps, insurance technology, blockchain, digital assets, financial APIs, and automated financial services.
The term does not refer to one specific technology. Instead, it describes the intersection of finance and technology.
FinTech Glossary A–Z
A
ACH (Automated Clearing House)
ACH is an electronic payment network used primarily in the United States to process bank-to-bank transactions. It supports transactions such as direct deposits, bill payments, and business-to-business payments.
AML (Anti-Money Laundering)
AML refers to laws, regulations, policies, and procedures designed to prevent criminals from using financial systems to disguise illegally obtained money.
Financial institutions and fintech companies may use customer verification, transaction monitoring, and suspicious-activity reporting as part of their AML programs.
API (Application Programming Interface)
An API is a set of rules that allows different software applications to communicate with one another.
In fintech, APIs can allow banks, payment providers, fintech applications, and other platforms to securely exchange information or initiate financial services.
API Banking
API banking refers to the use of APIs to connect banking services with third-party applications and platforms.
It can support services such as account information, payments, identity verification, lending, and financial data aggregation.
Automated Investing
Automated investing uses software and algorithms to help manage investments with limited manual intervention.
Robo-advisors are one common example of automated investing.
B
BaaS (Banking as a Service)
Banking as a Service allows companies to integrate banking capabilities into their own products through technology and APIs.
A non-bank company, for example, may use a BaaS provider to offer customers accounts, payments, cards, or other financial services without building an entire banking infrastructure itself.
BNPL (Buy Now, Pay Later)
Buy Now, Pay Later allows consumers to purchase products or services immediately and pay for them over time, often through installments.
Depending on the provider and market, BNPL products may involve interest, fees, or other charges.
Blockchain
Blockchain is a distributed digital ledger technology that records transactions across a network.
Blockchain is best known for its role in cryptocurrencies, but the technology is also being explored for payments, identity, tokenization, trade finance, and other financial applications.
Biometric Authentication
Biometric authentication uses physical or behavioral characteristics to help verify a person’s identity.
Examples include fingerprints, facial recognition, and voice recognition.
C
CBDC (Central Bank Digital Currency)
A CBDC is a digital form of money issued by a country’s central bank.
Unlike cryptocurrencies issued independently of central banks, a CBDC represents a claim on the issuing central bank. Different countries are exploring CBDCs for different purposes, including payments, financial inclusion, and modernization of monetary infrastructure.
Chargeback
A chargeback occurs when a card transaction is reversed through a dispute process.
Customers may request a chargeback when they believe a transaction was unauthorized, fraudulent, duplicated, or otherwise problematic.
Contactless Payment
Contactless payments allow customers to pay without physically inserting or swiping a payment card.
Near-field communication (NFC) technology is commonly used for contactless card and mobile payments.
Crypto Wallet
A crypto wallet is a software or hardware solution used to manage access to cryptocurrency assets.
Crypto wallets generally manage cryptographic keys rather than storing cryptocurrency in the same way a physical wallet stores cash.
D
Digital Bank
A digital bank provides banking services primarily through digital channels such as websites and mobile applications.
Some digital banks operate with banking licenses, while others provide services through partnerships with licensed financial institutions.
Digital Identity
Digital identity refers to information and credentials used to identify an individual or organization electronically.
Digital identity systems can support account opening, authentication, payments, and access to financial services.
Digital Lending
Digital lending uses online platforms and technology to facilitate loan applications, underwriting, approval, disbursement, and repayment.
Automation and alternative data can sometimes make digital lending faster than traditional lending processes.
Digital Wallet
A digital wallet is an application or digital service that allows users to store payment credentials or financial information and make digital transactions.
Examples include mobile wallets, payment wallets, and wallets integrated into smartphones.
E
Embedded Finance
Embedded finance refers to the integration of financial products and services into non-financial applications, platforms, or customer experiences.
For example, an e-commerce platform may offer payments, lending, insurance, or financial accounts directly within its application.
Embedded Payments
Embedded payments allow customers to make payments directly within a non-financial platform or application instead of being redirected to a separate payment experience.
eKYC (Electronic Know Your Customer)
eKYC uses digital technologies to verify a customer’s identity during onboarding.
Depending on the jurisdiction, this can involve identity documents, biometric verification, databases, video verification, or other digital processes.
Electronic Money
Electronic money, sometimes called e-money, represents monetary value stored electronically and accepted as a means of payment.
The exact legal definition and regulatory treatment varies between jurisdictions.
F
FedNow
FedNow is a U.S. instant payment service operated by the Federal Reserve.
It enables participating financial institutions to send and receive faster payments through the Federal Reserve’s infrastructure.
FinTech
FinTech is short for financial technology. It describes technology used to create, deliver, improve, or automate financial products and services.
FinTech as a Service
FinTech as a Service refers to technology platforms that allow businesses to integrate financial capabilities without developing the complete infrastructure themselves.
G
Gateway
A payment gateway is technology that helps transmit payment information between a customer, merchant, and payment-processing infrastructure.
Payment gateways are commonly used in online commerce.
Geolocation
Geolocation uses information such as GPS, network data, or device information to determine the approximate location of a user or device.
Financial applications may use geolocation as part of fraud prevention and security systems.
I
IBAN (International Bank Account Number)
An IBAN is an internationally standardized bank-account identifier used in many countries to facilitate cross-border payments.
IBAN structures vary by country.
Interchange Fee
An interchange fee is a fee associated with card transactions that is generally paid by the merchant’s acquiring institution to the cardholder’s issuing institution.
The amount and regulation of interchange fees vary by market and transaction type.
Instant Payments
Instant payments are electronic payments designed to make funds available to the recipient very quickly, often within seconds.
Examples of real-time payment systems include India’s UPI, Brazil’s Pix, and other national or regional instant-payment networks.
K
KYC (Know Your Customer)
KYC refers to processes financial institutions and regulated businesses use to verify the identity of their customers.
KYC requirements can help organizations meet regulatory obligations and reduce fraud and financial crime risks.
M
Mobile Banking
Mobile banking allows customers to access banking services through a mobile device.
Common functions include checking balances, transferring money, paying bills, depositing checks, and managing cards.
Mobile Money
Mobile money allows users to store, send, receive, and use monetary value through mobile devices.
Mobile money has played an important role in expanding access to financial services in several emerging markets.
M-PESA
M-PESA is a mobile money service that allows users to perform financial transactions using mobile technology.
It originated in Kenya and has become one of the most widely recognized examples of mobile money and digital financial inclusion.
N
Neobank
A neobank is a financial services provider that operates primarily through digital channels rather than traditional physical branches.
The term is used differently across markets, and not every company described as a neobank is itself a licensed bank.
NFC (Near-Field Communication)
NFC is a short-range wireless communication technology commonly used for contactless payments.
It allows compatible devices to exchange information when placed close together.
O
Open Banking
Open banking refers to systems that allow customers, with appropriate authorization, to share financial information with third-party providers through secure technology such as APIs.
Open banking can support services including account aggregation, payment initiation, personal finance management, and financial product comparison.
Open Finance
Open finance expands the principles of open banking beyond traditional bank-account data to potentially include information from a wider range of financial products and services.
The scope varies by market and regulatory framework.
P
Payment Gateway
A payment gateway securely facilitates the transmission of payment information during a transaction, particularly for online payments.
It is one component of the broader payment ecosystem.
Payment Orchestration
Payment orchestration involves managing multiple payment providers, methods, gateways, and transaction routes through a centralized technology layer.
Businesses may use payment orchestration to improve payment performance, routing, redundancy, and geographic coverage.
Payment Processor
A payment processor facilitates the technical processing of payment transactions between merchants, financial institutions, card networks, and other participants.
Pix
Pix is Brazil’s instant payment system operated by the Central Bank of Brazil.
It enables individuals and businesses to make fast electronic payments and transfers.
Point of Sale (POS)
A point-of-sale system is the technology used by a business to process transactions when customers purchase goods or services.
Modern POS systems can include payment processing, inventory management, customer data, and business analytics.
R
Real-Time Payments
Real-time payments allow electronic funds transfers to be processed and made available to recipients rapidly, often within seconds.
Different countries operate their own real-time or instant-payment infrastructures.
RegTech
RegTech, short for regulatory technology, refers to technology used to help financial institutions and other organizations manage regulatory and compliance requirements.
Applications can include transaction monitoring, identity verification, reporting, and compliance automation.
Robo-Advisor
A robo-advisor is a digital investment service that uses algorithms and software to provide automated investment recommendations or portfolio management.
S
SEPA (Single Euro Payments Area)
SEPA is a European payment framework designed to make euro payments between participating countries more standardized and efficient.
Smart Contract
A smart contract is software deployed on a blockchain or similar distributed system that can automatically execute predefined actions when specified conditions are met.
Stablecoin
A stablecoin is a digital asset designed to maintain a relatively stable value, often by referencing an underlying asset such as a fiat currency.
The stability mechanism and level of backing vary between stablecoins.
SWIFT
SWIFT is a global messaging network used by financial institutions to exchange standardized information related to financial transactions.
SWIFT itself does not function as a bank account or simply “move money” in the same way as a payment system; it primarily facilitates financial messaging between participating institutions.
T
Tokenization
Tokenization involves representing an asset, right, or piece of information as a digital token.
In financial services, tokenization can be used for applications ranging from payments and securities to digital representations of real-world assets.
Two-Factor Authentication (2FA)
Two-factor authentication requires users to provide two different forms of verification before accessing an account or service.
It can provide additional protection beyond a password alone.
U
UPI (Unified Payments Interface)
UPI is India’s instant payment system that enables users to transfer money between participating bank accounts using supported applications and payment interfaces.
It has become a major part of India’s digital payments ecosystem.
UPI ID
A UPI ID is a virtual payment address used to identify a bank account for UPI transactions.
It allows users to send and receive payments without necessarily sharing traditional bank-account details with the other party.
V
Virtual Card
A virtual card is a digital version of a payment card that can be used for online or other supported transactions.
Some virtual cards can provide additional controls, such as temporary card numbers or spending limits.
Virtual Bank
A virtual bank provides banking services primarily through digital channels rather than a traditional branch network.
The terminology and regulatory meaning can vary between countries.
W
Wallet
A wallet is a digital application or service used to store payment credentials, digital assets, or monetary value, depending on the type of wallet.
Wearable Payments
Wearable payments allow users to make transactions using devices such as smartwatches or other connected wearable devices.
Wire Transfer
A wire transfer is an electronic transfer of money between financial institutions.
Wire transfers can be used for domestic or international payments, depending on the relevant banking infrastructure.
Why FinTech Terminology Matters
Understanding fintech terminology makes it easier to evaluate financial products, compare providers, understand regulations, and follow developments in the financial technology industry.
Many fintech concepts are also interconnected.
For example, open banking can use APIs to enable data sharing. That data can support embedded finance, personal financial management, or digital lending. Meanwhile, real-time payment systems can provide the infrastructure for instant transfers through mobile applications and digital wallets.
Understanding these relationships is often more useful than learning individual definitions in isolation.
Explore More FinTech Insights
The FinTech Glossary is only the starting point. Explore our other resources to learn more about the technologies, companies, payment systems, markets, and trends shaping global financial services.
FinTech Companies
Explore fintech companies across payments, banking, lending, wealth management, insurance, remittances, and other financial technology segments.
FinTech Apps
Compare digital banking, payment, money-transfer, investment, and financial management applications.
Payment Systems
Learn how major payment networks and instant-payment systems such as UPI, M-PESA, Pix, and other regional systems work.
FinTech Statistics
Explore data and statistics covering digital payments, fintech investment, mobile banking, financial inclusion, neobanks, and other fintech sectors.
FinTech Markets
Understand fintech ecosystems across major markets and regions, including Asia, Europe, the Middle East, Africa, and the Americas.
FinTech Comparisons
Compare financial technology products and services based on features, availability, pricing, use cases, and other important factors.
Frequently Asked Questions (FAQs)
What does FinTech mean?
FinTech stands for financial technology. It refers to technology used to develop, deliver, improve, or automate financial products and services.
What are some examples of FinTech?
Examples include digital wallets, mobile banking applications, payment gateways, neobanks, online lending platforms, robo-advisors, blockchain-based financial services, and instant payment systems.
What is the difference between FinTech and banking?
Banking is the broader financial service industry, while FinTech refers to the use of technology to deliver or improve financial services. Traditional banks can also use fintech technologies.
What is embedded finance?
Embedded finance is the integration of financial services into non-financial products, platforms, or applications. Examples include payments, lending, insurance, and financial accounts integrated into e-commerce or other digital platforms.
What is open banking?
Open banking allows customers to authorize regulated third parties to access or use financial information and services through secure interfaces such as APIs, subject to applicable laws and regulations.
What are real-time payments?
Real-time payments are electronic payments designed to process transactions and make funds available to recipients rapidly, often within seconds.
Why is FinTech important?
FinTech can make financial services more accessible, convenient, efficient, and digital. It is also contributing to changes in payments, banking, lending, investing, insurance, and financial infrastructure around the world.