Letter of Credit

Bank guarantee for payment.

Educational content only. This page does not provide investment, legal, or regulatory advice.

Why it matters

Letter of Credit matters because it affects financial interpretation, product decisions, and industry communication.

Letter of Credit is commonly explained through its core definition and the practical example used in the glossary.

A common mistake is to use Letter of Credit without understanding its operational and regulatory context.

Letter of Credit may vary across payment rails, regulations, and market practices.

3D Secure

Security protocol for online cards.

Account Updater

A service that refreshes expired or reissued card details for recurring billing merchants.

Acquirer

Bank processing payments for merchant.

AML

Anti Money Laundering.

Anti Money Laundering

Laws against clean dirty money.

Arbitrage

Profiting from price differences in markets.

Stripe

Stripe: Payment tokenization 101

Used for payment tokenization, network token, and account updater context.

Stripe

Stripe: Merchant of record

Primary source for merchant-of-record terminology.

Stripe

Stripe: What is a payment facilitator?

Primary source for payfac models and platform payments.

Author

Founder and multilingual fintech glossary editor

Reviewer

Editorial and source review layer

Reviewed

3/15/2026