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Banking & Payments Glossary

A comprehensive A–Z reference of terms used in banking and payments. Essential reading for anyone joining the industry.

A​

ACH (Automated Clearing House) A batch electronic payment network used in the US. The Australian equivalent is BECS (Bulk Electronic Clearing System).

ADI (Authorised Deposit-taking Institution) An organisation licensed by APRA to accept deposits from the public. Includes banks, credit unions, and building societies.

ALM (Asset/Liability Management) The practice of managing a bank's balance sheet to optimise the return while managing risk (interest rate, liquidity, FX).

AML (Anti-Money Laundering) Policies, procedures, and controls to detect and prevent financial crime. See AML & KYC.

APRA (Australian Prudential Regulation Authority) The regulator responsible for licensing and supervising banks, insurers, and superannuation funds.

ASIC (Australian Securities and Investments Commission) The conduct and market integrity regulator for financial services in Australia.

AUSTRAC (Australian Transaction Reports and Analysis Centre) Australia's financial intelligence unit and AML/CTF regulator. Receives TTR, IFTI, and SMR reports.

Authorisation In card payments: the real-time approval from the issuing bank that funds are available and the card is valid. A hold is placed; settlement follows later.

B​

BECS (Bulk Electronic Clearing System) Australia's batch payment clearing system. Used for Direct Entry (payroll, direct debits). Operated by AusPayNet.

Beneficiary The recipient of a payment. Also called the creditor or payee.

BIC (Bank Identifier Code) A standardised code (also called SWIFT code) that uniquely identifies a financial institution. Format: 8 or 11 characters (e.g., ANZBAU3M).

BPAY Australia's bill payment service using Biller Codes and Customer Reference Numbers (CRN). See BPAY.

BSB (Bank-State-Branch) A 6-digit code in Australia identifying a bank and branch (e.g., 062-000 = ANZ, Sydney). Used in BECS and NPP.

BankID / Bank Transaction Code A code attached to a ledger entry identifying the nature of the transaction (e.g., PMNT/RCDT/VCOM = received credit transfer).

C​

camt (Cash Management) The ISO 20022 message family for bank-to-customer communications. Examples: camt.053 (statement), camt.054 (notification).

CDR (Consumer Data Right) Australia's open data framework giving consumers the right to share their data with accredited third parties. See Open Banking & CDR.

CBS (Core Banking System) The central banking platform managing accounts, balances, and transactions. See Core Banking System.

Chargeback A card payment dispute initiated by the cardholder through their issuing bank, potentially reversing a transaction.

ChrgBr (Charge Bearer) ISO 20022 field specifying who pays transaction fees: DEBT (sender), CRED (receiver), SHAR (shared), SLEV (service level).

Clearing The process of exchanging and reconciling payment information between banks before settlement. See Clearing & Settlement.

CoP (Confirmation of Payee) A service that verifies the payee's name matches the account before a payment is sent. Reduces misdirected payments and APP fraud.

Correspondent Bank A bank that provides services (holding accounts, facilitating payments) to another bank, particularly for cross-border payments.

CRN (Customer Reference Number) In BPAY: a unique number identifying the customer/invoice at the biller. Contains a check digit.

CTF (Counter-Terrorism Financing) The complement to AML — preventing the financial system from being used to fund terrorism.

Cut-Off Time The deadline by which a payment instruction must be received to be processed in the current business day's clearing cycle.

D​

DE (Direct Entry) The colloquial term for BECS transactions — both credit (payroll) and debit (direct debit) entries.

Debtor The party whose account is debited — the payer. See Debtor & Creditor.

DNS (Deferred Net Settlement) A settlement method where obligations are netted and settled at the end of a cycle, rather than in real time. Used by BECS.

Dormant Account An account with no customer-initiated transactions for a defined period (typically 7 years in Australia). Unclaimed money may be transferred to ASIC.

E​

EDD (Enhanced Due Diligence) More intensive customer verification for high-risk customers (PEPs, high-risk jurisdictions). See AML & KYC.

EMV Europay, Mastercard, Visa — the global standard for chip-based payment cards. More secure than magnetic stripe.

EndToEndId An ISO 20022 payment ID set by the originating customer that is preserved and carried unchanged through the entire payment chain.

ESA (Exchange Settlement Account) A bank's settlement account held at the Reserve Bank of Australia. All interbank settlement flows through ESA credits/debits.

eftpos Australia's domestic debit card network. Lower interchange than Visa/Mastercard. Supports cashout at POS.

F​

FATF (Financial Action Task Force) The international body that sets AML/CTF standards. Countries not on FATF's compliant list face enhanced scrutiny.

FCS (Financial Claims Scheme) The Australian Government guarantee of deposits up to AUD $250,000 per person per ADI.

FI (Financial Institution) Any organisation involved in managing and processing financial transactions — banks, credit unions, payment institutions.

FX (Foreign Exchange) The conversion of one currency to another. See FX in Payments.

Finality The point at which a payment is irrevocable and legally final. RTGS provides intraday finality; DNS provides end-of-day finality.

FSS (Fast Settlement Service) The RBA's real-time settlement infrastructure used by the NPP to settle each payment gross.

G​

gpi (Global Payments Innovation) SWIFT's payment tracking service. Provides real-time end-to-end visibility via UETR. See SWIFT.

H​

Hold A reservation of funds in a customer's account pending final debit. Reduces available balance without yet posting a final entry.

HVCS (High Value Clearing System) Australia's RTGS-adjacent system for large domestic payments. Uses ISO 20022 pacs.008.

I​

IBAN (International Bank Account Number) A standardised account number used internationally (up to 34 characters). Mandatory in SEPA; used in SWIFT.

IFTI (International Funds Transfer Instruction) An AUSTRAC-mandated report for every international payment — regardless of amount.

Interchange Fee The fee paid by the acquiring bank to the issuing bank for processing a card transaction. Funded by the merchant discount rate.

ISO 20022 The international standard for financial messaging. Defines XML-based messages for payments, securities, and cash management.

K​

KYC (Know Your Customer) The process of verifying a customer's identity before opening an account or providing services. See AML & KYC.

L​

LCR (Liquidity Coverage Ratio) An APRA regulatory metric requiring banks to hold sufficient High-Quality Liquid Assets (HQLA) to cover 30 days of net cash outflows.

LEI (Legal Entity Identifier) A 20-character globally unique code identifying a legal entity. Mandatory in derivatives reporting; increasingly used in ISO 20022.

M​

MDR (Merchant Discount Rate) The total fee percentage a merchant pays on card transactions = interchange + scheme fee + acquirer margin.

MLRO (Money Laundering Reporting Officer) A statutory role at every reporting entity. Responsible for receiving internal reports of suspicious activity and filing SMRs with AUSTRAC.

MsgId ISO 20022 field — a unique identifier for a message. Different from transaction IDs and end-to-end IDs.

N​

Nostro Account "Our" account held at a correspondent bank (Latin: "ours"). E.g., ANZ's USD account at JPMorgan is ANZ's nostro.

NPP (New Payments Platform) Australia's real-time payment infrastructure. 24/7, ISO 20022, PayID-enabled. See NPP.

NSFR (Net Stable Funding Ratio) An APRA regulatory metric requiring banks to fund assets with sufficiently stable funding.

O​

OFAC (Office of Foreign Assets Control) US Treasury department that administers sanctions. OFAC SDN (Specially Designated Nationals) list is the most powerful sanctions list globally.

Originator The person or entity that initiates a payment. Also called the debtor, payer, or sender.

Osko The brand name for consumer and business payments on the NPP, operated by BPAY Group.

P​

pacs (Payment Clearing and Settlement) The ISO 20022 message family for interbank payment messages. Examples: pacs.008 (credit transfer), pacs.004 (return).

pain (Payment Initiation) The ISO 20022 message family for customer-to-bank payment instructions. Examples: pain.001 (initiation), pain.002 (status).

PayID A proxy identifier (phone number, email, ABN) linked to a BSB+account number via the NPP directory.

PayTo An NPP overlay service that replaces BECS Direct Debit with real-time, consent-based pull payments.

PCI-DSS Payment Card Industry Data Security Standard. Required for any entity handling card data.

PEP (Politically Exposed Person) A person holding a prominent public function. Requires Enhanced Due Diligence. See AML & KYC.

Principal The original loan amount, excluding interest.

R​

RBA (Reserve Bank of Australia) Australia's central bank. Issues currency, manages monetary policy, operates the RTGS/ESA settlement system.

Remittance Information Details about the purpose or reference of a payment (invoice numbers, etc.) carried in ISO 20022 RmtInf.

RTGS (Real-Time Gross Settlement) A settlement method where each payment settles immediately and individually. See Clearing & Settlement.

RTO (Recovery Time Objective) How quickly a system must be restored after an outage. For payments: typically < 4 hours; for critical systems < 30 minutes.

S​

SAR/SMR (Suspicious Activity/Matter Report) A report filed with AUSTRAC (AU) or FinCEN (US) when a bank suspects financial crime. Cannot be disclosed to the subject.

Settlement The final, irrevocable transfer of funds between banks' settlement accounts. See Clearing & Settlement.

STP (Straight-Through Processing) A payment that is processed entirely by automated systems without any manual intervention.

Suspense Account An internal holding account for transactions that cannot be immediately matched or applied.

SWIFT Society for Worldwide Interbank Financial Telecommunication. The global secure messaging network for financial institutions.

T​

TPS (Transactions Per Second) A measure of payment system throughput capacity.

TTR (Threshold Transaction Report) An AUSTRAC-mandated report for cash transactions of AUD $10,000 or more.

TxId (Transaction ID) ISO 20022 field — unique ID assigned to a payment transaction by the debtor bank.

U​

UETR (Unique End-to-end Transaction Reference) A UUID assigned to a payment by the debtor bank, used by SWIFT gpi to track a payment across the entire chain.

V​

Value Date The date from which interest is calculated on a credited or debited amount. May differ from booking date for some payment types.

Vostro Account "Your" account held at our bank on your behalf (Latin: "yours"). The mirror perspective of a nostro account.

W​

Write-Off An accounting action where an unrecoverable amount is removed from the balance sheet and recognised as a loss.

X​

XSD (XML Schema Definition) The schema that defines the structure and validation rules for ISO 20022 XML messages. All ISO 20022 messages are validated against their XSD.

Z​

Zero-Hour Rule A legal concept in some jurisdictions: if a bank collapses, transactions from that day may be unwound to the "zero hour" (midnight). RTGS finality protections are designed to override this.