Glossary
A
Acquirer (or acquiring bank)
The bank or payment service provider (PSP) that acquires the funds from an end user’s bank (the ) on behalf of a business (which is often called a merchant). Mangopay acts as an acquirer for platforms using its services, and also partners with other acquirers.
Anti-money laundering and countering the financing of terrorism (AML/CFT)
Regulations and rules which place obligations on payment service providers like Mangopay to implement measures that help ensure the money transacting through their system is legitimate. These measures include (but are not limited to) customer verification.
AML/CFT regulations aim to prevent the misuse of the financial system for illicit purposes. Financial crime may take place in many forms, but the regulatory landscape of the payment industry tends to highlight the risks posed by two types of offense:
- Money laundering, which is the act of concealing the source of money acquired illegally in order to reinvest it in legal activities. Prior to money laundering, there is always an underlying offense to acquire the proceeds of criminal activities, such as fraud, tax evasion or the provision of illegal products or services. Money laundering also usually involves various techniques to disguise the origin of funds by layering transactions and diversifying intermediaries. The final stage of this process consists in integrating the laundered money with the perpetrators’ assets.
- Terrorism financing, which is the provision of funds with the intention of using them to commit a terrorist act or in the knowledge that they will be used for that purpose. The sources of these funds can be illegal or legal, including through online fundraising and organizations which appear legitimate.
Whereas money laundering aims to disguise the origin of tainted funds, terrorism financing is driven by the need to hide the recipients of the funds.
AML/CFT is tackled by international bodies, such as the Financial Action Task Force. In Europe, AML/CFT is part of the work of the European Banking Authority, and the European Union has enacted a series of directives often referred to as AML or AMLD with a number (for example AML6, 6AMLD).
B
Bank wire
Movement of funds between a user’s bank account and their , either entering the as a or leaving as a .
A bank wire is also known as a wire or credit or bank transfer, but the term bank wire is adopted at Mangopay to distinguish it from a , which occurs between two e-wallets, within the Mangopay environment.
A bank wire, whether a pay-in or a payout, is in reality a bank-to-bank movement, with Mangopay, a licensed , on one side and the user’s bank on the other.
Bank wire pay-ins at Mangopay refer to a kind of credit transfer, where the user asks the bank to “push” the funds to the recipient. The same is true of payouts, where Mangopay offers a wide range of local and international options for sending funds.
These can be contrasted with debit transfers, or direct debits, where the payee’s bank “pulls” the funds with the user’s permission. Mangopay offers two schemes for direct debit pay-ins: SEPA for EUR and BACS for GBP.
Another important aspect in bank-to-bank transfers, for both pay-ins and payouts, is whether the banks are based in the same country, and whether the accounts are in the same currency or different ones.
Local bank wires
Bank wires between two bank accounts in the same currency and two banks in the same country are known as local or domestic. These operations are governed by the country’s banking authorities and are free of additional charges.
SEPA zone
In Europe, the single euro payments area (SEPA) facilitates cross-border payments in euros by providing a single framework for all participating countries. The rules also require banks to apply the same charges as domestic payments. This means that no additional fees will be applied for a bank wire made in euros between two accounts located within the SEPA zone.
Multi-currency transactions
However, as soon as another currency is involved, then there is the potential for conversion fees to apply. Banks generally hold amounts of foreign currencies with partner banks in other countries, and they can use these to manage cross-border transactions for their customers. These negotiated partnerships involve costs, and some banks pass these costs on to their users.
International bank wires
International bank wires take place between banks in different countries or regions, and in different currencies. They are by nature more complex and involve more actors.
For a bank to receive the funds, it needs to have an account open in that country. If it is not the case, then the bank has to pass via a partner bank, known as a correspondent bank, to complete the operation. This depends entirely on the bank’s size and activity, and the country and currency involved. There may indeed be several partners, functioning more like a network and based on a multitude of agreements. Furthermore, if a bank doesn’t have the necessary partnerships in place to complete the operation, it must source the services of correspondent banks which do.
International bank wires that rely on the SWIFT network have three options for managing expectations for processing fees:
- SHA – The fees are shared between the remitter (sender) and the beneficiary
- BEN – The beneficiary bears all fees
- OUR – The remitter bears all fees
The SHA option is most commonly used, and means that fees may be debited from the amount of a given payment (in the case of both pay-ins and payouts).
The amount of the fees applied varies enormously as it will be different for each bank. They are likely to be a fixed amount per transaction and of an amount less than €50 (or the equivalent in other currencies).
Note – Cost-bearing available for USD payouts
For payouts in USD, Mangopay offers the possibility of using OUR to allow the platform to bear the cost of international payouts. This ensures your beneficiaries are paid in full.
See the payouts guide for details or contact our teams via the Hub to activate.
Beneficial owner
An individual who owns or holds a power of control over a legal entity, either directly or via a holding company, usually by owning more than 25% of the entity’s share capital or voting rights. To enable payouts, some types of legal users need to declare information about beneficial owners, which must be verified by Mangopay against document proofs, in compliance with AML/CFT regulations.
A person is considered a beneficial owner of a legal entity if:
- They own more than 25% of the entity’s share capital
- They are a beneficiary of more than 25% of the entity’s share capital
- They exercise more than 25% of the entity’s voting rights
Direct vs. indirect ownership
Beneficial ownership can happen in two ways:
- Direct ownership means that the shareholding or power of control is in their name as a natural person.
- Indirect ownership means that the person holds more than 25% of the entity via another company.
The 25% refers to the entity being verified, and therefore indirect ownership must be calculated based on the person’s ownership of the holding company. The word ‘ultimate’ is used to refer to this notion of ownership even if via another holding, such as in the phrase ultimate beneficial owner (giving the acronym UBO which is used in the API).
For example, shareholders of a company being verified all have small capital holdings (of less than 25%) except for one company which owns 60%. This parent company is owned 40–60 by Person A and Person B respectively. Person A ultimately owns 24% of the company being verified, while Person B owns 36%. Only Person B is therefore considered a beneficial owner.
Note – Indirect ownership can be through multiple holdings
Regardless of how many companies are between the entity being verified and the individual person, if they ultimately own more than 25%, they need to be declared as a beneficial owner.
Other criteria
A person may also be considered a beneficial owner of a legal entity in other circumstances:
- They are appointed corporate directors or nominee directors
- They are legal guardians of a minor
- They hold a significant shareholding, including of bearer shares which can be transferred anonymously
Disclaimer
Mangopay reserves the right to determine who is a beneficial owner of a legal entity based on the information and documents provided. The person may be someone who exercises a power of control via other means, such as through voting rights or control over the management, administrative, or executive bodies, or over the general meeting of its members.
When no natural person can be identified according to the above criteria of holding more than 25% of the capital or voting rights, a legal representative may be considered as the beneficial owner. This exceptional case is also only possible in the absence of any suspicion.
Bank identification number (BIN)
A unique set of digits assigned to an . The BIN typically comprises 6 or 8 digits and is used at the start of the card number (also called the primary account number, or PAN) on all cards issued by the bank or financial institution.
The BIN can be used to determine the card’s issuer and country, as well as other information like the network or brand, debit type, and card product. Mangopay enables platforms to do this using the Look up metadata for a payment method endpoint.
Buyer
A user making a purchase from a seller on a marketplace. In a typical marketplace workflow, the buyer makes a pay-in to their wallet to complete the transaction. Depending on the business model and integration, the platform may choose to hold the funds on the buyer’s wallet before triggering the transfer to the seller at a later stage, such as on order confirmation or fulfillment.
C
Chargeback
The reversal of a pay-in back to the user because they contested it with their bank. A user may request a chargeback if, for example, the platform refuses to refund the payment, and Mangopay must comply with the bank’s request.
When a chargeback happens, Mangopay automatically creates a for the contested amount and deducts it from the platform’s . Mangopay also creates a to manage the liability of the funds, which may or may not be contestable by the platform.
For more information, see the Disputes article.
Customer-initiated transaction (CIT)
A transaction made in the presence of the cardholder, subject to with no exemption possible. In recurring payments, once the initial CIT is successful subsequent can be processed.
Conversion
A movement of funds where the currency of the debited funds is different from the credited funds.
The transaction is converted at the market rate offered by Mangopay to all platforms. The platform is invoiced for conversions during the billing cycle at the client rate, which includes Mangopay’s markup.
There are two types of conversion:
- Instant - Conversion executed without a quote, at the current rate
- Quoted - Conversion executed against a that previously locked in the rate
A conversion’s sell currency (debited) and buy currency (credited) are together referred to as a currency pair. They are often expressed one after the other, for example EURUSD refers to a conversion from EUR to USD.
See the FX article for more information.
D
Dispute
The management of liability for a amount, corresponding to a . A dispute may or may not be contestable by the platform.
If the dispute is contestable, the platform may provide evidence to the issuing bank to justify the legitimacy of the transaction. If the dispute is lost, or was never contestable, then the platform must settle the repudiation amount via a settlement transfer or bank wire.
For more information, see the Disputes article.
E
European Economic Area (EEA)
The member states of the EU plus Iceland, Liechtenstein, and Norway. The EEA therefore excludes Switzerland and the UK.
For the full list of countries, see the Eurostat website.
Electronic money institution (EMI)
A type of financial institution authorized by EU regulations to issue, manage, and distribute electronic money (under Directive 2009/110/EC) and provide payment services (under Directive 2015/2366/EU).
Mangopay is an EMI under Luxembourg law and authorized to provide services to platforms headquartered in the and the UK. The record of Mangopay’s licensing from the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg can be viewed on the CSSF’s website, as well as on the European Banking Authority’s EUCLID database (Payment Institutions Register).
Due diligence
As an electronic money institution, Mangopay is required by law to conduct due diligence on users to whom it provides payment or e-money services. This due diligence includes user verification and also other AML/CFT screening and processes.
Mangopay reserves the right to request of users any information or documents that it considers relevant for due diligence in the provision of its services.
Mangopay is audited by the CSSF on its due diligence practices.
Safeguarding
Electronic money institutions are bound by strict rules regarding the protection of users’ funds. The process of protecting funds held is known as safeguarding, and a number of tightly controlled safeguarding methods are authorized by the regulations that apply to EMIs. Mangopay uses these regulated methods to provide robust protection for platforms and their users.
Mangopay’s safeguarding accounts are held with top-tier credit institutions. They are separate and identified as safeguarding accounts used for the specific purpose of complying with Mangopay’s safeguarding requirements.
Mangopay has a robust and diverse group of credit institution partners, allowing it to reduce the risk exposure to only one.
Mangopay is audited by the CSSF on its safeguarding practices.
F
Fees
Funds taken by the platform on transactions and collected in the Fees Wallet for that currency.
Fees Wallet
The wallet that stores fees taken by the platform on in each currency.
Mangopay automatically creates one Fees Wallet per currency for the platform.
I
Inquiry
Request to screen an event and generate a recommendation from the fraud prevention solution. The data in the inquiry is supplied by the Mangopay API and optionally a profiling session run by the integrated on the platform’s website or app.
For transactions, an inquiry is linked to a transaction using the TransactionId, so this identifier is used as the transaction reference and the inquiry reference.
The inquiry origin refers to the type of transaction or its payment method (for example card, card preauthorization, etc).
The type of inquiry (e.g. pay-in, etc.) indicates the type of event screened.
Issuer (or issuing bank)
The bank or payment service provider (PSP) of the user making a pay-in, from which Mangopay acquires the funds (as an ) when they are credited to the user’s wallet.
The term issuer derives from the payment card which the bank issues to its customer, the cardholder. The term is still used even when there is no card involved.
K
Know your business (KYB)
A term used to refer to the verification of legal entities - their identity, activity, , and - as opposed to know your customer (KYC) for individuals.
See the documentation for more information on types of user and requirements for legal entities.
Know your customer (KYC)
A term used to refer to the identity verification of natural persons (i.e., individuals), in contrast with know your business (KYB) for legal entities. The term KYC is also sometimes used to refer to identity verification more generally, without differentiating between individuals and legal entities. In the API, the KYC Document object is used to upload files for both natural and legal users.
See the documentation for more information on types of user and requirements for natural persons.
L
Legal representative
An individual legally appointed to represent a legal entity, authorized to sign contracts on its behalf. Legal representatives are often company directors or chairpersons, and are usually declared with the relevant national registry where the entity is based.
M
Mangopay Dashboard
Mangopay interface enabling platform operators to manage their payment operations. Available through the Mangopay Hub, the Dashboard is specific to each set of API credentials (Client ID and API key) in both the Production and Sandbox environments.
Mangopay environment
The secure digital space where funds can be moved freely in between , allowing for flexible payment to suit the platform’s business model. Funds in the Mangopay environment are held securely in accordance with the regulated safeguarding requirements applicable to licensed electronic money institutions in the European Union.
Find out more about our flexible product architecture in the E-wallet system article.
Mangopay Hub
Mangopay interface to centralize the platform’s entire experience with Mangopay. The Hub gives access to test the full API for free as much needed and use the Mangopay Dashboard to manage payment operations. Platforms can create Hub profiles for their teams and centralize communications with our Support. Via the Hub, platforms can also begin and manage their business relationship with Mangopay.
Mangopay WooCommerce/WC Vendors plugin
Official supported plugin that integrates Mangopay’s solution in a marketplace built on WordPress using WC Vendors and WooCommerce. For more information, see the Mangopay WooCommerce/WC Vendors plugin article.
Marketplace
Online platform connecting third parties in the exchange of products and services. The marketplace operator hosts transactions between buyers and sellers by integrating a payment service provider (PSP), such as Mangopay.
Maximum Frictionless Amount (MFA)
Transaction amount above which is always applied.
MFA is set to €50 euros (or equivalent in other currencies) by default but may vary depending on the platform’s contract with Mangopay.
Merchant-initiated transaction (MIT)
A transaction initiated by the platform in the absence of the cardholder and linked to a preceding customer-initiated transaction (CIT). Because the user completed strong customer authentication (SCA) in the initial CIT, an MIT is not subject to SCA.
P
Primary account number (PAN)
The number identifying a payment card, also known as the card number. Typically 16 digits (but shorter or longer depending on the network), the PAN is composed of sets of digits which are assigned to issuers and networks. The first set of digits in the PAN is the , which can be used to obtain more information about the card and issuer.
Pay-in
A movement of funds arriving in the Mangopay environment to the of the user making the payment. There are different pay-ins for different payment methods. Like all , a pay-in can be subject to a .
Payout
A movement of funds leaving the Mangopay environment to the bank account of a user. Like all , a payout can be subject to a but only at Mangopay’s initiation.
For more information, see the Payouts article.
Platform
App or website that integrates Mangopay to handle payments for its end users. The company operating the platform enters into a contractual partnership with Mangopay and collects fees on payments made via its platform.
Profiler
Code implemented into the platform’s app or website which monitors browser and behavioral data during a user’s profiling session, for fraud prevention purposes.
The profiling session is a single run of the profiler, and is identified with a profiling attempt reference which is uniquely generated for each session. The profiling attempt reference links the profiling session with an . For a pay-in, the platform sends the profiling attempt reference to the Mangopay API in the pay-in request.
The profiler makes it possible to create and enhance rules with .
PSD2
The second Payment Services Directive of the European Union (EU), which regulates payment services and their providers in the EU and European Economic Area (EEA).
PSD2 aims to create a more open and competitive payments landscape while also ensuring security and combating fraud for both businesses and individuals.
The full text is available in the Official Journal of the EU.
Payment service provider (PSP)
A company like Mangopay that enables businesses to accept payments.
PSPs provide various technologies and services that connect businesses with the broader financial infrastructure, and they are regulated nationally and internationally.
Q
Quote
An agreement to freeze a conversion rate, for a given currency pair, for a duration of time. A quote is required for a quoted conversion but not for an instant conversion.
A quote can’t be used after it expires and can only be used against one quoted conversion. A quote doesn’t have to be used.
See the FX article for more information.
R
Refund
The reimbursement of a single . A refund is linked to the initial transaction, and each type of transaction can be refunded:
- Pay-in : Back to the user via the payment method of the initial transaction (if supported).
- Transfer : Reversal of a movement from one wallet to another inside the Mangopay environment.
- Payout : Back to the wallet of the user who requested the payout, exceptionally and only at the initiation of Mangopay.
At Mangopay, a refund is the reimbursement of one single transaction in the Mangopay sense – meaning one single pay-in, transfer, or payout – rather than the full chain of transactions from the end user’s perspective. For example, refunding a pay-in for an end user may also require a transfer refund if the initial transfer was automatically triggered by the initial pay-in.
Repudiation
The amount corresponding to a which is withdrawn from the platform’s at the request of the user’s issuing bank.
The repudiation amount is settled during a , which may or may not be contestable by the platform. If the dispute is lost (or was never contestable) then the repudiation represents a debt towards Mangopay that the platform must settle.
For more information, see the Disputes article.
Repudiation Wallet
The wallet used to manage funds relating to and , showing the balance of the platform’s chargeback debt with Mangopay. For more information, see the Disputes article.
Mangopay automatically creates one Repudiation Wallet per currency for the platform.
S
Seller
A user selling a product or service on a marketplace. In a typical marketplace workflow, the seller (also called a vendor or merchant), receives a transfer from the buyer’s wallet on a specified trigger, such as on order confirmation or fulfillment.
To receive funds, a seller must have the Owner category. To make a payout from their wallet, they must also be verified.
Signal
Attribute of a user’s session detected by the fraud prevention . Signals make it possible to build a description of a user’s session, for example their behavioral interactions on screen, or their browser or network configuration.
Signals may correlate with activity that may be suspicious, such as using a virtual machine, browsing in incognito mode, or copying elements from the clipboard. The occurrence of such signals in a profiling session may be an indicator of fraudulent activity.
For more information, see the Fraud prevention article.
Strong customer authentication (SCA)
Regulatory requirement which ensures cardholders authenticate online transactions using two factors among three categories:
- A knowledge element : something only they know, like a password
- A possession element : something only they have, like their phone
- An inherence element : something only they are, like their fingerprint
Strong customer authentication was imposed by the second European payment services directive (PSD2) and its regulatory technical standards.
The use of this type of authentication is addressed by the 3DS protocol and some transactions may be exempted.
Learn more about 3DS →T
Transaction
One of three movements of funds in the Mangopay environment: a pay-in (entering), a transfer (within, i.e., wallet to wallet), a payout (leaving). Transactions can be subject to a , which is a dedicated type of transaction linked to the initial transaction.
Transfer
A movement of funds from one to another, within the Mangopay environment.
In the API, the term transfer always refers to an internal movement of funds; the term bank wire refers to what is often called a bank transfer or wire transfer (which may be a or ).
U
User
A private individual (natural person) or legal entity (legal person) registered with Mangopay to make payments on a . All types and categories of users must provide a minimum of information and comply with further verification requirements depending on the actions they wish to take via the platform.
Platforms create wallets for users to hold and manage funds. Users may need to register cards, bank accounts, and other information to make and .
W
Wallet (or e-wallet)
A digital container for funds in the Mangopay environment. Each wallet has a unique identifier and is attached to one user. Mangopay’s wallet system allows platforms to adapt payments to their business model.
At Mangopay, the term wallet or e-wallet always refers to this digital container (i.e., the Wallet object).
Workflow
A diagram representing flows of funds arriving in, moving within, and leaving the Mangopay environment. A workflow allows a platform to adapt payment operations to its business model and plan the technical integration.
Working day
Monday to Friday, excluding weekends and public holidays
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