Payments and reconciliation glossary. The terms, in plain English.

How to use this glossary

These are the terms that come up most when payments are moved through providers and proven against settlement files and bank statements. Each definition is short and links to the page that covers the subject in depth. Terms in capitals, such as UNKNOWN_OUTCOME or CASH, are the names Flominzo uses in its product.

Terms, A to Z

ACH return

A US ACH entry sent back by the receiving bank with a reason code, such as R01 for insufficient funds or R03 for no account. Returns arrive after the original entry, so each must be tied back to its payment and reversed in the ledger. See ACH returns reconciliation.

Agent audit trail

The record that links every payment an agent started to the policy it acted under, the agent, the task and the person who approved it. It is what risk and compliance teams ask for before an agent can touch money. See the AI agent audit trail.

Agentic payments

Payments an AI agent prepares or starts on behalf of a person or business, within limits and approvals set in advance. The agent proposes; the payment system decides. See agentic payments, agentic payouts and agentic payments reconciliation.

BAI2

A balance and transaction reporting format for bank statements that many US banks deliver. Like MT940, it predates ISO 20022, and many banks offer it alongside camt formats. See changing bank statement formats.

camt.053

The ISO 20022 end-of-day bank-to-customer statement: every booked entry on an account for a day, with structured references. camt.052 is the intraday report and camt.054 the debit and credit notification. See camt.053 reconciliation.

Confirmation of Payee

The UK service that checks the account name a payer enters against the name held by the payee’s bank before a payment is sent, returning a match, a close match or no match. See Faster Payments payouts.

Deterministic matching

Matching by versioned rules, so that the same evidence under the same rules always gives the same result and every match shows the rule behind it. AI can explain the breaks; it shouldn’t decide the matches. See deterministic vs AI reconciliation.

Evidence grade

How strongly a record proves that money moved. Flominzo grades evidence as INTERNAL (your own records), CLAIM (a provider’s API or webhook), SETTLEMENT (the provider’s settlement file) and CASH (your bank statement); a higher grade outranks a lower one. See payment reconciliation.

Financial closure

The point at which all the evidence a payment, or a business day, needs has arrived and agrees, and nothing blocking remains. A provider’s paid status alone is not closure, and late evidence can reopen it. See financial closure.

Idempotency key

A unique value sent with a payment instruction so that repeating the request cannot create a second payment. The provider stores the key with the first result and returns that result for any repeat. See duplicate payouts and unknown status.

Interac e-Transfer

Canada’s transfer service addressed by email or phone number, including bulk disbursements for businesses. A transfer can be sent without being deposited, so sent, deposited, cancelled and expired outcomes are tracked separately. See Interac bulk payouts.

Mandate

The standing authority under which payments are made without a fresh approval each time: who granted it, what may be paid, to whom, up to what limits and until when. For an AI agent, the payment system enforces the mandate, not the model. See AI agent spending limits.

MT940

The SWIFT customer statement message that many banks still send as an end-of-day statement. References often sit in free-text fields, so they need parsing before matching. See changing bank statement formats.

Nostro account

An account a business or bank holds with another bank, usually abroad and in that currency: “our account with you”. Remittance and payout operators reconcile nostro balances against the payouts funded from them. See remittance reconciliation.

Payout orchestration

A layer that sends payouts through several providers behind one interface, choosing a route by rules such as corridor, cost, balance and provider health, and failing over only after a definite rejection. See Flominzo Payouts.

PayTo

Australia’s account-to-account debit service on the New Payments Platform. The customer authorises a payment agreement in their banking app, and each debit must match an active agreement. See Australia.

Prefunding

Depositing money with a payout partner in advance so it can pay recipients immediately. The prefunded balance has to be reconciled against every payout, fee and FX conversion the partner makes. See remittance reconciliation.

Reconciliation exception

A record that doesn’t agree with its expected evidence: a missing file, a disagreeing status, or an amount, fee or FX difference. A useful exception has a type, an owner and a due-by time. See the exception queue and reconciliation system design.

Safeguarding

In the UK and EU, the rules that require payment and e-money institutions to protect customer funds, typically in segregated accounts. Safeguarding reconciliation compares what the firm owes customers with what it holds; how you safeguard stays your obligation. See the UK.

Settlement file

A provider’s report of the transactions it will settle with you for a business date, with fees and net amounts. It proves what the provider will pay or debit, not that cash moved. See settlement reconciliation and PSP reconciliation.

Silent payout failure

A payout that shows as sent or paid but never reaches the recipient, with no failure message. It is found by expecting evidence by a deadline and chasing what doesn’t arrive. See silent payout failures.

Source of truth

The record trusted for a particular field: the bank statement for whether cash moved, the settlement file for fees, your own records for what you instructed. There is rarely one source of truth for a whole payment. See which record is the source of truth.

Unknown outcome

A payment attempt whose result hasn’t been established, usually after a timeout or a lost response. It is not a failure, and it is resolved by a status lookup or later evidence, never by sending again. Flominzo records it as UNKNOWN_OUTCOME. See the payout state machine.

UTR

The Unique Transaction Reference that Indian banks assign to NEFT, RTGS and IMPS transfers; UPI payments carry a similar reference, the RRN. It links your payout, the provider’s response and the bank credit. See UPI payout API.

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