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50 Fintech Buzzwords Explained

Mar 28, 2024

The Fintech industry is constantly evolving with innovations and technologies coming up often. Though many concepts are built on fundamental fintech ideas, the terms and jargon related to fintech are rapidly diversifying. 

Whether you are new to fintech or someone who wants to be updated on the latest buzzwords, we have got you covered. 

1. Aadhaar-enabled Payment Service (AePS) 

AePS, in India, enables individuals to conduct basic banking transactions like deposits, withdrawals, balance inquiries, bill payments, etc., without requiring a traditional bank account or debit card. It leverages Aadhaar, a unique identification number, as the sole credential for user authentication and verification. 

2. Alternative Finance 

Alternative finance refers to a variety of funding and investment avenues beyond conventional banking, such as crowdfunding, peer-to-peer lending, and cryptocurrencies. It offers alternative options for both individuals and businesses seeking financial solutions outside traditional banking channels. 

3. Annual Percentage Rate (APR) 

The APR is a standardized measure, expressed as a percentage, that reflects the total yearly cost of borrowing or the annual rate of return on an investment. It encompasses not only the base interest rate but also any additional fees and charges associated with the loan or investment. 

4. Asset-based Loan (ABL)

ABL is a type of financing option that allows businesses to unlock immediate working capital by using their existing tangible assets as collateral for short-term loans. 


AUA (Authentication User Agency) and KUA (Knowledge User Agency) are two entities within India’s Aadhaar system, both requiring registration with UIDAI. AUAs verify the identities of an individual, while KUAs access KYC details with user consent. Both utilize the central Aadhaar data repository for their functions. 

6. Automated Clearing House (ACH)

The ACH is a central system for electronic fund transfers, facilitating swift, secure, and cost-effective movement of funds between financial institutions. 

7. Biometric Payments

Biometric payment refers to a transaction method at the point of sale (POS) that uses biometric authentication methods such as fingerprints, iris scans, or facial recognition to ensure secure transactions. Simply wave a hand, flash a smile, or even offer a quick eye scanthat’s all it takes to securely pay at checkout. This technological approach eliminates the use of physical cards or PINs during financial interactions. 

8. Central Bank Digital Currency (CBDC)

A CBDC represents a nation’s currency in digital form, administered directly by the central bank. Unlike physical cash or bank deposits, CBDCs are purely electronic. As of December 2023, an impressive 130 countries are actively exploring CBDC initiatives. Several nations, including the Bahamas, Montserrat, Dominica, Saint Lucia, Saint Vincent and the Grenadines, and Nigeria, have already implemented CBDCs within their jurisdictions. 


CKYC is a centralized repository of KYC information managed by the government or regulatory authorities. It aims to streamline verification, enhance accuracy, and promote financial inclusion. While CKYC is primarily implemented in India, other countries like Singapore, Sri Lanka, and the Bahamas are also exploring similar concepts. 

10. Closed-loop Payment System

Closed-loop payment systems are payment networks that operate within their exclusive networks, confining transactions to specific merchants or vendors. Unlike widely accepted open-loop systems like Visa, they offer limited interoperability. Examples include gift cards, loyalty program cards, or prepaid cards for specific retailers. 

11. Cloud Banking

Cloud banking is a transformative deployment model that enables financial institutions to manage core operations and deliver services online. This strategic shift leverages the on-demand scalability and advanced technologies offered by the cloud. 

12. Co-branded Credit Cards

A co-branded credit card is a credit card issued by a joint effort between a bank and another non-financial brands or merchants. They typically carry the logos of both entities and offer benefits and rewards specifically tied to the partnering brand. 

13. Co-lending

Co-lending combines multiple lenders’ resources to unlock financing opportunities, enabling larger loans and broader access to capital across sectors like real estate, small businesses, and personal loans. This collaborative approach expands market reach and enhances financial inclusivity. 

14. Compliance-as-a-Service (CaaS)

CaaS is a cloud-based solution that outsources the management of regulatory compliance for businesses, including implementation, maintenance, and employee training. 

15. Consumer Lending

Consumer lending refers to the financial category focused on providing individuals and households with loans for various personal needs. These loans include term loans, credit cards, BNPL, and auto loans. 

16. Core Banking Solutions (CBS)

CBS is a centralized software application that acts as the digital backbone of a bank. It seamlessly manages vital banking operations like customer accounts, deposits, loans, transactions, and other services. 

17. Credit Underwriting

Credit Underwriting is the process by which a lender (such as a bank, credit union, or fintech company) assesses the creditworthiness of a borrower before granting them a loan or line of credit. It’s essentially a risk assessment to determine the likelihood of the borrower repaying the debt according to the agreed terms. 

18. DigiLocker

DigiLocker is a secure digital document wallet provided by the Ministry of Electronics and IT. Linked to Aadhaar and mobile numbers, it enables citizens to access, issue, and verify various documents, reducing reliance on physical copies and promoting a paperless ecosystem. 

19. Digital Microfinance

Digital microfinance refers to the delivery of financial services, particularly microloans, to low-income individuals and entrepreneurs using digital technologies. 

20. eCheck

eChecks are digital versions of physical checks, offering a secure and convenient method of payment initiated online through the user’s bank account. They eliminate the need for physical transactions, making them faster and more efficient for businesses and individuals. 

21. Electronic Clearing Service (ECS)

ECS streamlines financial transactions by processing bulk payments electronically, saving time and effort. Ideal for repetitive payments like salaries and bills, it simplifies the process for both individuals and organizations. 

22. Embedded Insurance

Embedded insurance is a specific type of embedded finance focusing on integrating insurance into non-insurance platforms. E.g., ride-hailing, travel bookings, etc. 

23. Equity-crowdfunding

Equity crowdfunding involves individuals investing in non-listed companies through websites and receiving shares in return. This fintech avenue offers businesses a novel way to raise capital and democratizes investment opportunities. 

24. Financial Chatbots

Financial chatbots are AI-driven virtual assistants specialized in the financial sector. They use Natural Language Processing (NLP) and Machine Learning (ML) to understand queries, process transactions, and deliver a user-friendly experience to customers. 

25. Fintech Incubator

Fintech incubators provide support to early-stage firms, offering working space, management training, and amenities to enhance their chances of survival. These organizations play a vital role in fostering innovation within the fintech industry. 

26. Gift Cards

Gift cards are convenient alternatives to cash, loaded with a set amount redeemable for purchases at designated retailers or within specific product categories. Available in physical and digital formats, they offer flexibility within the chosen brand or theme, making them popular for various gifting occasions. 

27. Green Fintech/Sustainable Fintech

Green Fintech, or Sustainable Fintech, refers to the integration of environmentally conscious practices into financial technology, focusing on eco-friendly products, sustainable investments, and technology for ecological well-being. While countries like the US, France, and China lead in green bonds and ESG strategies, India is making strides by aligning with global sustainability goals. 

28. Hybrid Card

A hybrid card is a payment card that combines a chip and a magnetic stripe, ensuring compatibility with different transaction systems. This dual-interface approach enhances security and acceptance across chip-enabled and traditional terminals. 

29. Infrastructure-as-a-Service (IaaS)

IaaS is a cloud computing model where a vendor hosts infrastructure for customers in data centers accessible via the Internet. It enables tasks like building web applications, storing data, and running business logic with enhanced flexibility compared to on-premises setups. 

30. Lending-as-a-Service (LaaS)

Lending-as-a-Service (LaaS) is a fintech model enabling businesses to seamlessly offer loan products and services to their customers. This avoids the need to build and maintain their own lending infrastructure. Instead, businesses collaborate with third-party LaaS providers who manage the complexities of loan processing, servicing, and regulatory compliance. 

31. Loyalty Programs

A loyalty program is a marketing approach where businesses reward customers for repeat purchases or desired behaviors, typically through points, discounts, or other perks. 

32. Merchant Banks

Merchant banks are specialized financial institutions that offer a wider range of services, including underwriting, asset management, and corporate finance. They cater specifically to large corporations and high-net-worth individuals. 

33. Nanodeposit

A nanodeposit is a small, refundable cash deposit, typically around $0.05. It is initiated by one party in an online transaction to build trust with an unfamiliar counterparty. 

34. National Financial Switch (NFS)

NFS is India’s largest network of shared ATMs. Managed by NPCI, it promotes convenience banking and connects a vast network of ATMs, fostering seamless financial transactions. 

35. Omnichannel Banking

Omnichannel banking provides a seamless customer experience across all touchpoints (online, mobile, in-person, phone, email, and video). Customers can manage their accounts and conduct transactions through any channel, ensuring convenience and a consistent experience. 

36. Original Credit Transaction (OCT)

OCT facilitates direct fund transfers, commonly employed by banks for refunds, cashback, and various payments like payroll deposits or government benefits. This streamlines financial transactions, offering efficiency in processing large-scale fund transfers. 

37. Payment Initiation Service Provider (PISP)

PISP is a third-party financial institution authorized to initiate payments directly from a customer’s bank account on their behalf. Unlike credit cards, PISPs don’t require sharing card details with merchants. 

38. Payroll Card

A payroll card is a reloadable prepaid card employers use to pay employees instead of checks or direct deposits. It functions like a debit card for purchases and withdrawals. 

39. Peer-to-Peer Lending/P2P Lending

P2P lending is a financial activity that facilitates direct borrowing and lending between individuals via online platforms. This process bypasses traditional financial intermediaries like banks, enabling borrowers to access financing and investors to earn potential returns. 

40. Personal Finance Management (PFM)

PFM refers to the process of planning, budgeting, saving, investing, and monitoring an individual’s financial resources to achieve their financial goals.

41. Pull Payments

Pull payments are a type of electronic transaction where the payee initiates the transaction and withdraws funds directly from the payer’s account with the payer’s prior authorization.

42. Push Payments

Push payments are a type of electronic transaction where the payer actively initiates the transaction and sends funds directly to the payee. This approach empowers the payer to control the timing and amount of the payment, unlike pull payments, where the payee initiates the withdrawal.

43. Reconciliation

Reconciliation is the process of comparing and matching an individual’s internal financial records with external statements to ensure accuracy and completeness. It’s like double-checking one’s bank statement against their check register to make sure all the numbers match up.

44. Remittance

Remittance refers to the transfer of money, often by individuals working abroad, to their home country, typically to support family or for personal use.

45. Repurchase Agreement (RePo)

A RePo is a short-term financial arrangement where one party sells securities to another with an agreement to buy them back at a higher price later. 

46. Revolving Credit

Revolving credit is a flexible credit line with a predetermined limit, enabling continuous access for borrowers. This facilitates convenient fund utilization, timely repayments, and uninterrupted credit availability.

47. Risk/Credit Assessment

Risk/Credit assessment is a systematic process used by lenders to evaluate a borrower’s creditworthiness. It involves analyzing financial statements, credit history, and other factors to set loan terms and determine repayment potential. 

48. Super Apps

A super app is an all-encompassing mobile application offering users a consolidated platform to access a wide range of services through a single interface. This eliminates the need for multiple apps for various functionalities, providing a convenient and unified user experience.

49. Unified Payment Interface (UPI)

UPI is a real-time Indian payment system enabling instant and secure fund transfers between bank accounts directly via mobile devices. It fosters inter-bank, peer-to-peer, and person-to-merchant transactions.

50. Video KYC

Video KYC is a remote identity verification process that leverages secure video conferencing technology. It offers a convenient and efficient alternative to traditional in-person verification methods. 

From alternative finance to AI-driven chatbots, the fintech landscape is undergoing a paradigm shift. These key concepts and innovations are not just buzzwords; they represent the evolution of the fintech industry over the last few years. 

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