Cross-border Payment Glossary · Issue 5 Industry Standards & Regulations
With the development of global e-commerce, financial technology, and the continuous evolution of digital transaction methods, the cross-border payment industry is moving towards a more compliant, efficient, and secure direction. In this process, industry standards and regulatory regulations play a vital role. Whether it is a technology platform, payment institution, or cross-border merchant, mastering the basic terms and core concepts related to data security, open finance, and compliance supervision is the first step to opening the door to the international market.
This issue of vocabulary will focus on the mainstream regulatory frameworks and industry standards in the international payment field, helping you comprehensively understand the legal bottom line and industry norms in the operation of cross-border payments.
25. Payment Card Industry Data Security Standard (PCI DSS)
PCI DSS is an international payment card industry data security standard formulated by the PCI Security Standards Council (PCI SSC) established by Visa, Mastercard, American Express, Discover, and JCB. The standard specifies a series of security requirements that institutions processing, storing, or transmitting cardholder data must follow at the technical and business process levels.
Core requirements include encryption protection, access control, firewall settings, vulnerability detection, and time synchronization. Whether it is an acquirer, payment gateway, or merchant system, as long as it processes payment card data, it must comply with PCI DSS specifications to prevent data leakage and fraud risks.
26. Payment Services Directive 2 (PSD2)
PSD2 is a new generation of payment business regulatory system officially implemented by the EU since 2018. It not only regulates traditional financial institutions but also guides the entire payment market towards the direction of "Open Banking".
The core of PSD2 includes:
- Introducing Strong Customer Authentication (SCA);
- Regulating the operational permissions of third-party payment service providers (such as AISPs and PISPs);
- Mandating banks to open API interfaces to promote ecological co-construction.
Through PSD2, financial technology companies can develop innovative services based on bank account data, and consumers can also obtain more diverse, autonomous, and secure transaction experiences.
27. General Data Protection Regulation (GDPR)
GDPR is a comprehensive regulation on data privacy and personal information protection implemented by the EU since 2018. It applies to all institutions processing personal data of EU residents, regardless of whether their establishment is in the EU.
In cross-border payments, transaction data often involves sensitive content such as customer names, addresses, and bank card information. GDPR requires enterprises to ensure data security and obtain explicit authorization from users when collecting and processing such data. At the same time, users have the right to know, restrict, or even request the deletion of their personal information (the right to be forgotten).
Non-compliance with GDPR can lead to huge fines. Therefore, for cross-border payment enterprises, data compliance has become a compulsory course for business expansion overseas.
28. Open Banking
Open banking is a model that encourages banks to actively open up customer account data and payment instruction interfaces to authorized third parties (such as financial technology companies or payment applications). This concept originates from PSD2 and has now become the core trend of global financial digitization.
Through API technology, open banking makes data transparent and interfaces standardized, thereby achieving smarter transaction experiences, such as payment aggregation, intelligent credit, account integration, and bill management services. For the payment industry, open banking breaks the barriers of traditional banks and brings new connection methods to cross-border finance.
29. Regulatory Compliance in Payments
Compliant payment means that all participants in the transaction—merchants, payment institutions, financial platforms, etc.—must comply with the regulations of their 所在地 and related markets. Especially in cross-border transactions, the regulatory system is more complex, involving anti-money laundering (AML), KYC (Know Your Customer), tax declaration, data security, and fund supervision and other requirements.
For example, most countries have clear regulations on links such as withdrawals, fund movements, and user identity verification. Institutions that fail to meet compliance requirements may face user 封禁，termination of bank cooperation, or even legal sanctions. Therefore, building a compliant, secure, and transparent payment mechanism is not only a legal requirement but also the cornerstone of sustainable business development.
30. Payment License
A payment license is the legal business qualification required for an institution to provide payment services in a specific country or region. Different countries have different thresholds, scopes of application, and approval processes for payment licenses.
Common cross-border payment-related licenses include:
- EU region: Electronic Money Institution (EMI) license
- Singapore: Payment Services Act electronic payment license
- Hong Kong: Stored Value Payment Tool License / Money Service Operator (MSO) license
Among them, the MSO is a license issued by the Hong Kong Monetary Authority, applicable to institutions providing currency exchange, international remittance, and other services. In many countries, holding a payment license not only represents legal qualifications but also means higher security of user funds and higher industry credibility for enterprises, laying a foundation for expanding cross-border businesses.
Conclusion
Industry supervision has never been an obstacle to growth but an important tool to promote the healthy expansion of the payment industry. From PCI DSS to PSD2, from GDPR to local payment licenses, these standards and regulations jointly build a compliant, highly secure, and efficient environment for international payments.
Cross-border payment is not just about technology but also the transmission of trust. In the hexagonal competitiveness model, "compliance capability" often determines whether an enterprise can smoothly go global and operate stably. This series will continue to bring more content on payment infrastructure, technological innovation, and market trends. Please look forward to Issue 6: Payment Infrastructure!
Want to explore more terms? Please pay attention to our upcoming next issue of the glossary. Master step by step and 精进 systematically, so that your payment system can connect globally!
