aid: truelayer-vocabulary
name: TrueLayer Vocabulary
description: >-
  Domain vocabulary for TrueLayer's open banking platform covering payment
  types, authentication concepts, bank connectivity, regulatory frameworks,
  and open banking terminology for UK and EU markets.
created: '2026-05-03'
modified: '2026-05-03'
tags:
  - Open Banking
  - Payments
  - Fintech
  - UK Banking
  - EU Banking

terms:
  - term: Open Banking
    definition: >-
      A regulatory framework requiring banks to share financial data with
      authorized third-party providers via APIs, enabling payment initiation
      and account information services. Mandated by PSD2 in the EU and the
      UK Open Banking Implementation Entity (OBIE) in the UK.
    tags:
      - Core Concepts
      - Regulation

  - term: Pay-In
    definition: >-
      A payment made from a user's bank account into a merchant's account
      via open banking rails. Also called a closed-loop payment or deposit.
    tags:
      - Payments

  - term: Payout
    definition: >-
      A payment initiated from a merchant's account to an end user's bank
      account. Used for refunds, withdrawals, and disbursements.
    tags:
      - Payments
      - Payouts

  - term: Variable Recurring Payment
    definition: >-
      A series of payments made from a user's account based on a pre-authorized
      mandate. Unlike Direct Debit, VRP payments can vary in amount and timing
      within constraints defined by the mandate.
    abbreviation: VRP
    tags:
      - Payments
      - Mandates

  - term: Mandate
    definition: >-
      An authorization from a bank account holder that permits a third party
      to initiate future VRP payments on their behalf within specified limits.
    tags:
      - Mandates

  - term: Minor Units
    definition: >-
      Currency amounts expressed in the smallest unit of the currency (e.g.,
      pence for GBP, cents for EUR). TrueLayer requires all amounts in minor
      units to avoid floating-point precision issues.
    tags:
      - Payments
      - Core Concepts

  - term: Request Signing
    definition: >-
      TrueLayer's security requirement for all POST payment API requests. A
      detached JWS (JSON Web Signature) is generated using the merchant's
      private key and included in the Tl-Signature header.
    tags:
      - Authentication
      - Security

  - term: Merchant Account
    definition: >-
      A TrueLayer-managed bank account holding received payments. Funds settle
      into merchant accounts and can be paid out to external accounts.
    tags:
      - Merchant Accounts

  - term: Resource Token
    definition: >-
      A short-lived JWT (15 minute expiry) returned after payment creation.
      Used to initialize TrueLayer's Web SDK or hosted payment page for
      client-side authorization.
    tags:
      - Authentication

  - term: Idempotency Key
    definition: >-
      A unique UUID sent with each POST request to ensure duplicate requests
      produce the same result without creating duplicate payments. Required
      for all TrueLayer payment creation endpoints.
    tags:
      - Authentication
      - Payments

  - term: Tl-Signature
    definition: >-
      The HTTP header containing the detached JWS request signature required
      for POST requests to TrueLayer's payment endpoints.
    tags:
      - Authentication
      - Security

  - term: Settlement
    definition: >-
      The process by which an executed payment moves from the sender's account
      to the recipient's account and becomes available. Trigger for the
      payment_creditable webhook.
    tags:
      - Payments

  - term: PSD2
    definition: >-
      The EU Payment Services Directive 2 — the regulatory framework mandating
      open banking APIs across the European Union. TrueLayer's EU coverage
      is built on PSD2-compliant bank connections.
    tags:
      - Regulation
      - EU Banking

  - term: Sweeping Mandate
    definition: >-
      A type of VRP mandate for moving money between a user's own accounts,
      typically for automatic savings or account top-ups.
    tags:
      - Mandates

  - term: Commercial Mandate
    definition: >-
      A type of VRP mandate for recurring payments from a user's account to
      any beneficiary, used for subscription billing and variable payments.
    tags:
      - Mandates