Glossary
A | B | C | D | E | F | G | H | I | K | L | M | N | O | P | Q | R | S | T | U | V | W | X
This glossary defines terms referenced throughout RippleNet documentation.
A
account
A set of elements representing an accounting relationship between two entities. An account has a single balance (an amount), a transaction history, an owner, and a counterparty. Accounts may also have limits or other provisions, to conform to compliance, policy, or other technical requirements.
In the XRP Ledger, an account represents a holder of XRP and a sender of transactions. For more information, see Accounts in the XRPL Dev Portal (http://xrpl.org ).
amount
A value and a currency, where the value is a number and the currency is a denomination.
In structured payment data, the value and currency are typically defined in separate fields. The amount is only the value.
In the XRP Ledger, amounts may also include an issuer. For more information, see Tokens in the XRPL Dev Portal (http://xrpl.org ).
anti-money laundering (AML)
Policies, procedures, and laws put into place by financial institutions to prevent bad actors from misrepresenting illegally obtained funds as legal income.
application programming interface (API)
A specification of the operations available to software when connecting to another software application or service.
automated clearing house (ACH)
A network for electronic money transfers between participating financial institutions, usually limited to low-value domestic transfers within a country. In the United States the ACH Network is run by the National Automated Clearinghouse Association (Nacha).
B
Bank Identifier Code (BIC)
See Business Identifier Code.
base currency
See exchange rate.
Basic Bank Account Number (BBAN)
A country-specific bank account number. The BBAN is the last part of the IBAN when used with international bank transfers.
beneficiary
The entity (a person or institution) that is the ultimate recipient of a payment. (In the language of ISO 20022, this is the same as the creditor.) In Ripple Payments, not to be confused with the receiver, which is typically the Ripple partner who receives the Ripple Payment and pays out to the beneficiary.
beneficiary institution
The financial institution that delivers funds to the beneficiary.
book transfer
A payment type representing a transfer of the legal right of ownership of an asset without physically shifting the asset to the new owner. For example, a book transfer happens when a bank transfers funds from the account of the originator to the account of the beneficiary when both accounts are held the same bank. By making such transfers, the funds clear quickly and the beneficiary can use the transferred cash almost immediately. Book transfers are typically executed between two accounts held by the same party. Banks typically use book transfers for funding.
Business Identifier Code (BIC)
A unique identification code defined by the ISO-9362 standard and used by SWIFT. Also known as Bank Identifier Code, SWIFT code, or SWIFT address.
C
connector account
An account that mirrors an account in the financial institution's core ledger. Typically, the mirrored account is the Ripple-specific nostro or vostro account.
corridor
The combination of a specific sending and receiving currency or country. For example, USD (sending currency) and EUR (receiving currency). A corridor can have many senders and receivers. Compare to: rail.
counter currency
See exchange rate.
counterparty
The entity at the opposite end of a payment transaction or accounting relationship. One end of the relationship holds the money; the other end is owed money.
counter-terrorism financing (CTF)
Policies, procedures, and laws put into place to combat the flow of funds to terrorist organizations. These are typically deployed in combination with anti-money laundering (AML) procedures and laws.
cryptocurrency
A digital or virtual form of currency that uses cryptographic techniques to secure transactions, control the creation of new units, and verify the transfer of assets. Examples are XRP, ETH, or BTC.
currency
A standard system of money used as a medium of exchange. These are the assets exchanged by financial institutions – either fiat (such as USD, INR, or PHP) issued by a central bank, or a cryptocurrency (such as XRP, ETH, or BTC).
E
entity
In general financial or legal usage, either an individual (such as a person) or an institution (such as a business, a government agency, a university, etc.) that can open or close accounts, own or handle funds, sign contracts, and participate in financial transactions. In Ripple Payments and in the XRP Ledger, an entity is a single unit of authentication within a ledger (such as an account), plus metadata.
exchange rate
See FX rate.
exchange transfer
A transfer of funds between different fiat currency accounts on the same ledger.
F
Faster Payments Service (FPS)
A UK banking initiative intended to reduce the amount of time it takes to credit beneficiaries, especially for low-value payments.
Also known as Immediate Payments.
fiat currency
A currency issued and backed by a central bank. For example, USD, PHP, INR.
See also: cryptocurrency
financial institution
A business involved in sending, receiving, or otherwise processing payments. Such businesses include but are not limited to banks and payment providers. Financial institutions are typically highly regulated.
firm quote
A quote for a proposed payment that includes a guaranteed FX rate that will not change during the execution of the payment. In Ripple Payments, this means that Ripple covers any slippage in the FX rate. Contrast with indicative quote.
foreign exchange (FX)
The act of trading an amount of one currency for a (roughly) equivalent amount of another currency.
FX rate
Also known as exchange rate. The value of one currency (the base currency) expressed in terms of another currency (the counter currency) for purposes of conversion between them.
H
hash-based message authentication codes (HMAC)
In cryptography, a method of message authentication that uses a hash function and a secret key. In Ripple Payments, an HMAC allows financial institutions to verify the integrity of a quote before accepting it. HMACs prevent institutions from altering quotes by using a deterministic algorithm to generate a secret value (that only the institution that created it possesses) for all the fields that it requires to be immutable.
hop
See single-hop payment and multi-hop payment.
I
indicative quote
A quote for a proposed payment that includes an estimated FX rate. Due to slippage, the FX rate may change when the payment is executed. Contrast with firm quote.
institutional account
A Ripple Payments account maintained by an institution.
intermediary
A party that connects two or more other parties to facilitate a payment.
International Bank Account Number (IBAN)
An internationally agreed-upon system for identifying domestic bank accounts internationally. The IBAN typically includes the BBAN and Routing Code along with country code identifiers.
integration module
A software component that connects your internal systems with Ripple Payments. Features include automated orchestration, SWIFT messaging interoperability, and third-party extensions.
invoice payment
A payment type representing a payment made between a buyer and supplier for goods or services. Typically generated by accounting software as part of their accounts payable flow. Typical users of this payment type are SMEs and Multinational Corporations.
ISO 20022
An ISO standard for electronic data interchange between financial institutions. The RippleNet Payment Object body carries payment instruction details governed by Ripple’s payment object standards which use the ISO 20022 pacs.008 message definition as a basis. For more information, see iso20022.org.
issuer
In a blockchain, an entity or organization that creates and distributes tokens or digital assets on the blockchain. The issuer can be responsible for minting new tokens, managing their distribution, and controlling aspects like supply and compliance with relevant regulations. For more information, see Tokens in the XRPL Dev Portal (http://xrpl.org ).
issuance
In the XRP Ledger, any non-XRP currency (including non-currency stores of value). Issuances always have a currency code and a counterparty. For more information, see Tokens in the XRPL Dev Portal (http://xrpl.org ).
K
know your customer (KYC)
The guidelines and processes that an organization puts in place to verify the identity of its customers for purposes of anti-money laundering (AML) and **counter-terrorism financing (CTF) **efforts and regulatory compliance.
L
ledger
The record of balance changes for a given entity for a given currency.
With a blockchain, the ledger is the distributed record of all balance changes for the blockchain currency. For example, the XRP Ledger is a decentralized cryptographic ledger powered by a network of peer-to-peer servers.
In Ripple Payments, each financial institution typically maintains a core ledger that is synchronized with the balances tracked by Ripple. Note that while Ripple Payments ledgers are synchronized, they are not necessarily blockchain-based.
liquidity relationship
In Ripple Payments, a technical and financial link between two accounts on two different ledgers.
M
multi-hop payment
A payment executed through Ripple Payments that consists of multiple coordinated transfers executed over multiple ledgers between the originator and the beneficiary of the payment.
N
nostro account
Your bank's foreign currency account held at a bank in another country. The funds in the Nostro account are held in the foreign country's local currency. This account is typically used for foreign exchange and trade transactions.
O
orchestration
In the Ripple Payments API, a simplified payment flow that follows a pre-defined sequence of automated actions. Using the Orchestration API operations is the preferred way to develop new client applications, rather than using the more manual non-orchestration API operations.
originator
The entity or person that is the ultimate originator of a payment. (In the language of ISO 20022, this is equivalent to the debtor.) In Ripple Payments, not to be confused with the sender.
originator node
The first instance of a Ripple Payments software product that initiates a new payment.
owner
The owner of an account. Could be either end of an accounting relationship where the other is the counterparty.
P
party
A representation of a human or business that takes part in a transaction. Within a transaction, a party is represented by one or more entities.
path
A technical and liquidity-based connection between two institutions,
payment
One or more transfers made between ledgers owned by different institutions. Debits funds in the originator's account at the originating institution and credits the beneficiary's account at the beneficiary institution.
The payment object incorporates metadata, such as the originator's identifier, transfer amounts, fees, FX rates, and the domains of each intermediary transfer.
payment chain
The complete selected path for a given payment, comprised of one or more transfers.
payment ID
A unique identifier for each payment. Used to progress and query the payment.
payment message
A message sent between Ripple Payments peers to pay or cause another institution to pay a fixed amount of money to a beneficiary.
payment object
A representation of a payment message in a structured data format, such as JSON.
payment types
These are the payment types supported by Ripple Payments: book transfer, invoice payment, payroll payment, retail remittance, and treasury transfer.
payroll payment
A payment type representing a payment made by an organization to its employees. Typically generated by payroll software. Payroll payments have varied frequencies, but are commonly ones made weekly, bi-weekly, or monthly.
peer
In Ripple Payments, a node that is technically connected to another node on the network through the RippleNet Messaging Protocol (RNMP).
personally identifiable information (PII)
Information that can be used to uniquely identify an individual, such as name, address, or government identification number.
platform account
A platform account represents the real-world account maintained by a financial entity. You can link multiple Ripple Payments accounts to a platform account to segregate and track funds on Ripple Payments. See also: account.
pool account
A pool account points to one or more Ripple Payments accounts using the same currency. See also: account.
Q
quote
A bid that defines the proposed terms for an exchange or payment. In Ripple Payments, a quote includes such terms as the amount and currencies, the proposed FX rate – which may be either an estimate or a guaranteed rate (see indicative quote and firm quote respectively) – any payment fees, an expiration timestamp for the quote, and other details.
R
rail
A pre-existing, non-Ripple Payments payout method within a country. For example, Automated Clearing House (ACH) or wire transfers, cash, checks, or card networks. See also: corridor.
real-time gross settlement (RTGS)
The process of transferring and settling payments between banks in real-time on an individual order basis. In the RTGS model, when value is transferred from the sending bank it is immediately received and settled at the receiving bank.
receiver
In Ripple Payments, the Ripple partner that receives the payment and pays out to the beneficiary.
receiving currency
The currency delivered to the beneficiary.
retail remittance
A payment type where funds are sent or transferred to another party usually abroad. Remittances can be used for any type of payment such as an invoice, but it's typically used to pay family members back in a person's home country.
Ripple Payments
The distributed financial technology that connects banks, payment providers, digital asset exchanges, and payment providers to frictionlessly move money globally.
Ripple Payments address
Unique identifier of a Ripple Payments customer.
Ripple Payments UI
The customer web portal service, Ripple Payments UI. The portal provides customers web access to services, including the ability to manage and view their accounts and payments.
RippleNet Payment Object (RPO)
A single view of a Ripple Payments transaction shared by the sender and receiver. The RippleNet Payment Object (RPO) enables financial institutions to share payment data with partners using ISO 20022-based standards.
RippleNet Rulebook
The rules that govern how parties will transact together on Ripple software, providing the operational procedures and obligations of Members. For a link to the Rulebook, see RippleNet Rulebook.
routing code
Country-specific unique identifiers of financial institutions for instruments such as checks.
S
sender segregated account (SSA)
The collateral account that serves as temporary custodian of assets for the Ripple Payments sender.
sender
In Ripple Payments, the Ripple customer sending a payment through the Ripple Payments technology. Not to be confused with the originator, who may be a customer of the sender, and is the person or institution initiating the payment.
sending currency
The currency provided by the originator.
single-hop payment
A payment executed through Ripple Payments that consists of a single transfer executed over a single ledger between the originator and the beneficiary of the payment.
slab fee
A bulk fee set by a financial institution. For example, a bank may charge a 2 USD fee for payments from 100 to 200 USD and a 3 USD fee for payments from 201 to 300 USD.
slab rate
A bulk FX rate set by the liquidity provider that allows financial institutions to offer amount-based rates.
slippage
In general financial terminology, the difference between the quoted or expected price of a trade and the price at which the trade is executed. In Ripple Payments, slippage refers specifically to the change in the FX rate between the time a quote is created and the payment is executed that could affect the sent or delivered amount.
Smart Liquidation Service (SLS)
A RippleNet service that automatically splits large payments into smaller tranches over a specified time period. The payment size determines whether a liquidation gets routed through the Smart Liquidation service or the traditional one-to-one liquidation.
For more information, see Smart Liquidation.
state
The state of a payment in the database at the moment it is queried.
T
transfer
A movement of funds from one account to another. This movement can happen on one or more ledgers. A transfer between ledgers owned by different institutions comprise one or more portions of a payment. Each transfer between institutions becomes a link in the overall payment chain
treasury transfer
A payment type made to fund accounts typically in other countries so that payments can be made domestically from the account. Values are typically high and frequency could be daily.
throughput
The number of payments that a product can process in a given time period.
V
vostro account
A foreign bank's account held at your bank, funded in local currency. Your bank functions as the correspondent bank and manages the funds on behalf of the foreign bank. Vostro accounts enable domestic banks to fulfill their clients' international banking needs in countries where they don't have a physical presence.
W
wallet receive
In Ripple Payments ODL, a variation of On-Demand Liquidity in which the beneficiary institution receives the payment in XRP instead of fiat currency.
wallet send
In Ripple Payments ODL, a variation of On-Demand Liquidity in which the sending institution originates a payment in XRP instead of fiat currency.
wallet-to-wallet
In Ripple Payments ODL, a variation of On-Demand Liquidity in which XRP is transferred directly from the sending institutions’s wallet to the beneficiary institution’s wallet. The receiver then transfers the funds to a beneficiary in the local fiat currency.
X
XRP
The native cryptocurrency of the XRP Ledger. All accounts in the XRP Ledger can send XRP among one another and must hold a minimum amount of XRP as a reserve. XRP can be sent directly from any XRP Ledger address to any other, without needing a gateway or liquidity provider. This helps make XRP a convenient bridge currency.
XRP Ledger
A decentralized cryptographic ledger powered by a network of peer-to-peer servers. The XRP Ledger is the home of XRP , a digital asset designed to bridge the many different currencies in use worldwide. Ripple stewards the development of the XRP Ledger, and advances XRP as a key contribution to the Internet of Value : a world in which money moves the way information does today.