Whether you’re a product leader, fintech founder, or payments partner, understanding the language behind embedded finance platforms is mission-critical.
This blog post is your jargon-free guide to all the advanced embedded finance terminology you’ll encounter—from OAuth to multi-rail payment strategies. We’ve organized everything alphabetically, so you can find what you need fast.
A–Z Glossary of Embedded Finance Terms (Advanced Edition)
API (Application Programming Interface)
Translation: The waiter between your app and the finance kitchen.
APIs allow software systems to talk to each other. In embedded finance, APIs connect your platform to banks, processors, KYC tools, and more. Think of it as the connective tissue of every modern fintech app.
Compliance-as-a-Service (aka Regulatory-as-a-Service, RaaS)
Translation: Legal protection on autopilot.
KYC, AML, sanctions checks, and reporting—outsourced to trusted providers. These services help you launch finance features without legal landmines.
Dynamic Routing
Translation: Payments take the smartest route.
The payment system chooses the most optimal rail (ACH, card, RTP, FedNow) in real time, improving speed and lowering costs.
Embedded Fintech Stack
Translation: The full sandwich of financial tech.
Your platform sits on a layered stack—banks, processors, ledgers, APIs, and user interfaces—that together power embedded finance products.
Embedded Treasury Management
Translation: CFO-level control, in code.
Programmatic control over cash sweeps, interest earnings, real-time liquidity, and FX. It’s how fintech platforms manage complex money flows.
Latency
Translation: That awkward pause before something works.
In finance, latency is the delay before a transaction or API request completes. Lower latency means better UX and higher conversion rates.
Ledgering System (General Ledger API)
Translation: The accountant living in your codebase.
Tracks every cent with real-time, double-entry bookkeeping. Essential for reconciliation, compliance, and transparency.
Multi-Rail Strategy
Translation: One size doesn’t fit all—use every rail available.
ACH, cards, RTP, wires, and more—each has strengths. Multi-rail platforms dynamically choose the right path based on context.
Multi-Tenant Architecture
Translation: One platform, many kingdoms.
Allows a single embedded finance infrastructure to securely support multiple clients, partners, or verticals—each with their own data and rules.
Nested Account Structures
Translation: Accounts within accounts—like Russian dolls.
Lets you create virtual accounts for each user or merchant under a master structure. Ideal for platforms managing funds on behalf of others.
OAuth (Open Authorization)
Translation: Login without giving up your password.
Used for secure, permissioned connections to bank accounts and third-party services.
PCI Compliance
Translation: The sacred rulebook of credit card safety.
Ensures cardholder data is handled securely. Level 1 PCI compliance is required for enterprise-grade embedded payment platforms.
Programmatic Underwriting
Translation: Risk decisions at machine speed.
Automated decision engines assess risk for loans, merchant approvals, or insurance in real time—no manual reviews needed.
Risk Scoring Engine
Translation: Your financial sixth sense.
Scores users or transactions based on behavior, geolocation, history, and more. Flags fraud and supports smarter underwriting.
Sandbox Environment
Translation: The safe space for developers to break stuff.
A test version of your platform that uses dummy data to build, test, and troubleshoot integrations without risk.
SDK (Software Development Kit)
Translation: The IKEA kit for building finance features.
Libraries, code snippets, and tools that speed up and standardize your API integrations.
Token Vault
Translation: Fort Knox for payment data.
Securely stores sensitive info (like card numbers) and replaces it with tokens for safe, repeatable transactions.
Webhooks
Translation: Real-time “heads up” for your app.
Your platform gets pinged automatically when an event happens (like a payment clearing or account linking).
White-Label Solution
Translation: Their tech, your brand.
Embed someone else’s financial infrastructure under your own UI. The customer never knows the difference.
