87 terms

Glossary

Payment, crypto-asset, compliance and accounting terms in plain Canadian English. Each links to where the site explains it in depth.

A

ACB (adjusted cost base): The tax cost of a property, used to work out the gain or loss when it is disposed of. For crypto received as payment, track the Canadian-dollar value recorded when it was received, and confirm the treatment with a CPA. Read more
Address-swap fraud: Fraud in which a payer is tricked into sending funds to the wrong account or wallet address, for example through a fake change-of-details email or malware that replaces a copied address. On-chain payments sent this way are generally unrecoverable. Read more

B

Barter transaction: An exchange of goods or services without money changing hands. The CRA treats paying with crypto like a barter transaction, so the value is measured at fair market value in Canadian dollars at the time of the transaction. Read more
BIP-21: A Bitcoin standard for payment URIs that carry an address and optional details such as amount, label and message. Wallets can read a BIP-21 link or QR code and pre-fill the payment. Read more
Block: A batch of transactions added to a blockchain. Bitcoin targets an average of about one block every 10 minutes; Ethereum proof-of-stake organizes blocks into 12-second slots. Read more
Block explorer: A website or tool that shows public blockchain data, such as a transaction's status, confirmations and the addresses involved. Useful for checking a payment yourself rather than trusting a screenshot. Read more

C

Card-not-present (CNP) transaction: A card payment made without the physical card at a terminal, such as an online or phone order. Online merchants face card-not-present fraud and the disputes that follow. Read more
Cardholder data: Card account information such as the card number, cardholder name and expiry date. PCI DSS applies to entities that store, process or transmit it. Read more
Chargeback: A card payment reversed through the card network after the cardholder disputes it. Merchants typically pay a dispute fee and may lose the sale; on-chain payments have no chargeback mechanism. Read more
Closed-loop stablecoin: A stablecoin usable only within a limited network, such as a single business's ecosystem. Canada's federal Stablecoin Act excludes closed-loop stablecoins from its scope. Read more
Confirmation: A block added to the chain after the block containing a transaction. Each additional confirmation makes a reversal less likely, and many recipients wait for several before treating a Bitcoin payment as settled. Read more
Cost of capital: What it costs a business to fund itself, expressed as an annual rate. The site's models use an assumed 8% to price money that is tied up in transit. Read more
Cross-border payment: A payment where the payer and recipient are in different countries, often involving a currency conversion. Interac e-Transfer is domestic only, so cross-border payers use other rails. Read more
Crypto asset trading platform: A platform that lets clients buy, sell or hold crypto-assets. In Canada these platforms deal with provincial securities regulators, and CSA staff notices set interim terms for how they handle value-referenced crypto assets. Read more
Crypto-asset: A digital asset recorded on a blockchain, such as bitcoin, ether or a stablecoin. Prices of native crypto-assets can be volatile, and transfers are generally irreversible once confirmed. Read more
CSA (Canadian Securities Administrators): The umbrella organization of Canada's provincial and territorial securities regulators, such as the OSC, BCSC, ASC and AMF. CSA staff notices introduced the term value-referenced crypto assets for stablecoins. Read more
Custodial wallet: A wallet where a third party holds the private keys on the user's behalf. It shifts key-management risk to the custodian but adds counterparty risk. Read more
Custody: Who controls the private keys that move crypto-assets. Custody can be self-hosted, held by a custodian, or shared through arrangements such as multisig. Read more

D

Dispute fee: A fee charged to a merchant when a card payment is disputed, whether or not the merchant wins. The site's models assume $25 per dispute as an illustration. Read more

E

Effective rate: Total payment cost divided by the volume processed, shown as a percentage. It lets you compare rails with different mixes of percentage and fixed fees. Read more
EFT (electronic funds transfer): A domestic bank-to-bank transfer in Canada, used for payroll, supplier payments and pre-authorized debits. It is inexpensive per payment but typically takes a few business days to settle. Read more
EIP-681: An Ethereum standard for payment request URIs that can describe a plain transfer or a token transfer, including the chain and amount. Wallets can read it from a link or QR code. Read more
Epoch: On Ethereum proof-of-stake, a group of 32 slots of 12 seconds each. Finality typically takes about two epochs, roughly 12.8 minutes. Read more
Exempt financial service: A financial service on which GST/HST is not charged. The CRA says the supply of a virtual payment instrument, such as bitcoin or ether, is an exempt financial service. Read more

F

Fair market value (FMV): The price an asset would fetch between willing, informed parties at a given time. The CRA uses the FMV in Canadian dollars at the time of the transaction for crypto received as payment, for both income and GST/HST. Read more
Fiat currency: Government-issued money such as the Canadian or US dollar. Fiat-referenced stablecoins aim to hold a value equal to one unit of a fiat currency. Read more
Finality: The point at which a transaction is considered permanent and cannot practically be reversed. How it is reached and how long it takes vary by network. Read more
FINTRAC: The Financial Transactions and Reports Analysis Centre of Canada, which administers the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. It registers money services businesses and receives reports such as LVCTRs. Read more
Float: Money that has been paid by a customer but has not yet reached the business's account. The longer the settlement time, the larger the float and its financing cost. Read more
FX spread: The difference between the mid-market exchange rate and the rate a provider actually gives you. It is often less visible than a posted fee but can cost more. Read more

G

Gas: The unit Ethereum uses to measure the computation a transaction needs; the network fee is the gas used multiplied by its price. Fees vary with network demand. Read more
GST/HST: Canada's federal goods and services tax and the harmonized sales tax used in some provinces. When a registrant accepts crypto for a taxable supply, GST/HST is calculated on the crypto's fair market value at the time of the transaction. Read more

H

HMAC: A hash-based message authentication code: a signature computed from a message and a shared secret. Webhook receivers use it to check that an event really came from the expected sender and was not altered. Read more

I

Idempotency key: A unique identifier attached to a request or event so that processing it twice has the same effect as processing it once. It prevents duplicate webhooks from shipping an order twice. Read more
Interac e-Transfer: A Canadian rail for sending money between bank accounts using an email address or phone number. It is domestic only, so cross-border payers need another method. Read more
Interchange: The fee paid by the merchant's side to the card issuer on each card transaction, set by the card networks. From October 19, 2024, agreements with Visa and Mastercard lowered credit card interchange for eligible small businesses in Canada. Read more
Irreversibility: The property that a confirmed on-chain payment generally cannot be undone by a bank, card network or the sender. Refunds must be sent as new payments. Read more

L

LVCTR (large virtual currency transaction report): A FINTRAC report that reporting entities file when they receive virtual currency worth $10,000 or more in one transaction, or in linked amounts totalling $10,000 or more within 24 hours. It is due within five working days. Read more
Lynx: Payments Canada's high-value payment system, used to settle large and time-critical payments between financial institutions. Businesses reach it indirectly, for example through wires sent by their bank. Read more

M

MDR (merchant discount rate): The total percentage a merchant pays to accept a card payment, combining interchange, network fees and the processor's markup. Interchange is only one part of it. Read more
Mempool: The pool of broadcast transactions waiting to be included in a block. A payment seen in the mempool is pending, not settled. Read more
Mid-market rate: The midpoint between the buy and sell rates for a currency pair at a given moment. It is the benchmark for measuring an FX spread. Read more
MSB (money services business): A business that provides services such as remitting or transmitting funds or dealing in virtual currency. MSBs must register with FINTRAC before offering those services. Read more
Multisig: A wallet arrangement that needs more than one key to approve a transaction, for example two of three. It reduces the risk of one lost or compromised key. Read more

N

Network fee: The fee paid to the blockchain network to process a transaction. It varies by network and congestion and is separate from any provider's fee. Read more
Node: A computer that runs blockchain software, keeps a copy of the chain and relays transactions. Some businesses run their own node to verify payments directly. Read more
NSF (non-sufficient funds): A payment returned because the payer's account did not have enough money. NSF returns are a risk for pre-authorized debits and cheques. Read more

O

Off-ramp: A service that converts a crypto-asset into fiat currency and sends it to a bank account. Off-ramp fees and spreads are part of the cost of accepting crypto. Read more
On-chain: Recorded directly on a blockchain and visible to anyone running a node or explorer. Off-chain activity, such as transfers inside a custodian's books, is not. Read more
On-ramp: A service that converts fiat currency into a crypto-asset. Buying through an on-ramp involves a spread, a fee or both. Read more

P

PAD (pre-authorized debit): An arrangement in which a payer authorizes a business to pull payments from their bank account, for example for recurring bills. PADs run on EFT and can be returned, including for NSF. Read more
Par redemption: The right to redeem a stablecoin for one unit of its reference currency. Canada's Stablecoin Act requires in-scope issuers to redeem at par in the reference currency. Read more
Payment request: A structured link or QR code that tells a wallet who to pay, how much and in which asset. Standards include BIP-21 and EIP-681. Read more
PCI DSS: The Payment Card Industry Data Security Standard for entities that store, process or transmit cardholder data. Version 4.0.1 kept March 31, 2025 as the effective date of its future-dated requirements. Read more
Price risk: The chance that an asset's value changes between receiving it and converting it. It is high for native crypto-assets and lower, but not zero, for stablecoins. Read more
Private key: The secret that authorizes spending from a crypto address. Anyone with the private key can move the funds, so it should never be shared. Read more
Proof of stake: A way of securing a blockchain in which validators lock up the native asset to propose and confirm blocks. Ethereum uses proof of stake with 12-second slots and 32-slot epochs. Read more
PSP (payment service provider): A business that performs retail payment activities for others. Under the Retail Payment Activities Act, in-scope PSPs must register with the Bank of Canada, which keeps a public registry but does not license or endorse them. Read more
Public key: The shareable counterpart of a private key, from which addresses are derived. Systems can generate receiving addresses from public key material without holding a private key. Read more

Q

QST: Quebec sales tax, charged at 9.975% alongside the 5% GST on supplies on or after April 1, 2025, according to the CRA rate calculator. Read more

R

Reconciliation: Matching payments received to invoices, sales and ledger entries, and matching balances to statements. For on-chain payments it means linking transaction hashes to orders with a Canadian-dollar value. Read more
Refund (on-chain): A new outbound payment a business chooses to send back to a customer. A business needs a policy on the refund amount, the address used and who pays the network fee. Read more
Reporting entity: A business or person with obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, such as an MSB. Reporting entities file reports like LVCTRs with FINTRAC. Read more
Reserve assets: The assets a stablecoin issuer holds to back its coins. The Stablecoin Act requires in-scope issuers to hold high-quality liquid assets at least equal to outstanding stablecoins and to report monthly. Read more
RPAA (Retail Payment Activities Act): Federal law under which the Bank of Canada supervises in-scope payment service providers. Registration began November 1, 2024, and risk-management and safeguarding requirements took effect September 8, 2025. Read more
RTR (Real-Time Rail): Payments Canada's planned real-time payment system. Payments Canada targets a Q4 2026 launch after industry testing; treat it as planned until launch is announced. Read more

S

SAQ (self-assessment questionnaire): A PCI DSS form that eligible merchants complete to report their own compliance. Which SAQ applies depends on how the merchant accepts and handles card data. Read more
Seed phrase: A list of words that can recreate a wallet's private keys. Anyone with the seed phrase controls the funds, so no legitimate service, support agent or sandbox will ever ask for it. Read more
Self-hosted wallet: A wallet where the user or business holds its own private keys. It avoids custodian risk but makes the holder fully responsible for security and recovery. Read more
Settlement: The point at which funds are actually available to the recipient. Settlement times differ by rail, from same day to several business days. Read more
Slot: A 12-second window on Ethereum proof-of-stake in which one block may be proposed. Thirty-two slots make an epoch. Read more
Specified crypto asset: A designation under CSA Staff Notice 21-333 for compliant fiat-backed value-referenced crypto assets that registered or pre-registered platforms may let clients trade under interim terms. Read more
Stablecoin: A crypto-asset designed to hold a steady value against a reference such as the US dollar. It reduces price risk compared with native crypto-assets but is not the same as holding that currency in a bank. Read more
Stablecoin Act: Federal law enacted through Bill C-15, with Royal Assent on March 26, 2026, making the Bank of Canada the supervisor of in-scope fiat-referenced stablecoin issuers. Finance Canada expects it to come into force in 2027. Read more

T

Testnet: A separate blockchain network used for testing, where coins have no real value. Developers use testnets to try payment flows without risking funds. Read more
Transaction hash: A unique identifier for an on-chain transaction. It is the key reference for confirming, reconciling and recording a payment, and FINTRAC lists it among MSB transfer records. Read more
Travel rule: A FINTRAC requirement, in effect since June 1, 2021, that virtual currency transfers include originator and beneficiary names, addresses and account or reference numbers. The information must stay with the transfer. Read more
Trust account: An account in which a professional such as a brokerage, lawyer or notary holds money on behalf of clients. Trust accounting rules vary by province and profession. Read more

U

Underpayment: An on-chain payment for less than the amount requested, which can happen when fees are deducted from the amount sent or the wrong amount is entered. Businesses need a rule for whether to ask for the balance, refund or accept it; overpayments need a rule too. Read more

V

Value-referenced crypto asset (VRCA): The CSA's term, introduced in Staff Notice 21-332 on February 22, 2023, for crypto-assets designed to maintain a stable value by referencing an asset, such as stablecoins. VRCAs may be securities or derivatives in several jurisdictions. Read more
Virtual currency: The term FINTRAC uses in its guidance for crypto-assets such as bitcoin, ether and stablecoins. Dealing in virtual currency, through exchange or transfer services, is an MSB activity. Read more
Virtual payment instrument: A GST/HST term for crypto-assets such as bitcoin and ether. The CRA says supplying a virtual payment instrument is an exempt financial service, while other crypto-assets are likely taxable supplies. Read more
Volatility: How much and how quickly an asset's price moves. The site's models use an illustrative 3% daily volatility for native crypto-assets to show exposure, not to predict it. Read more

W

Wallet: Software or hardware that manages keys and lets a user send and receive crypto-assets. Wallets can be self-hosted or custodial. Read more
Webhook: An HTTP message one system sends to another when an event happens, such as a payment being confirmed. Receivers should verify signatures and handle duplicates. Read more
Wire transfer: A bank-to-bank transfer, often used for large or cross-border payments. Costs can include a fixed fee and, for cross-border wires, an FX spread. Read more
Working capital: The cash and short-term assets a business has to run day to day, less short-term obligations. Faster settlement can release some working capital tied up in transit. Read more