Where can I find a glossary of PayPal technical terms?

The following sections describe the most commonly used PayPal technical terms.


API (Application Programming Interface)
A SOAP or REST Web Service that operates in a request-response format over HTTPS.

API Certificate
See Creating and managing NVP/SOAP API credentials.

API profile
See Going live with your application.

AVS (Address Verification System)
A U.S. banking industry standard for confirming the postal address or telephone number associated with a credit card.

The act of giving permission to charge. This can be used in different contexts:
  • Authorizing cards for charge to be captured later (see Related API Operations).
  • Authorizing future payments such as a billing agreement for the merchant to charge a card when a regular transaction occurs, such as when you request a refill of a product.



To request the capture of previously authorized funds.

A digital file that contains a public key and information about the key. PayPal API access has an option to use a Certificate to access PayPal Web Service APIs.

Certificate ID
A unique value PayPal assigns to your public certificate after you upload it for use with Encrypted Website Payments.

A PayPal account whose owner has validated the account's mailing address.

Correlation ID
A unique identifier for an individual PayPal API call. Returned with every API response, this is a useful value for debugging and troubleshooting.

CVV2 (Card Verification Value, version 2)
A three- or four-digit code on a credit card that enhances fraud protection. Also known as CVN, CVV, CSC, Card Security Code, or Card Verification Number.



Direct Payment
One of PayPal's API-based payment options that processes credit card transactions with the customer never leaving the merchant website.

Downloadable history log
A file, generated by PayPal and useful for reconciliation, that contains a configurable amount of information about a specified range and type of transactions.



EWP (Encrypted Website Payments)
A PayPal security technology that uses public key cryptography to prevent HTML payment buttons from being spoofed or hacked.

In the context of the PayPal SDK, a value that describes the PayPal system you're submitting API calls to. The two most common values are Live and Sandbox.

Express Checkout
PayPal's API-based payment option that allows customers to check out by providing their PayPal login credentials and using their confirmed, stored shipping address and payment details.



Honor period
The length of time (three days) that PayPal honors availability of funds after a successful authorization.



Identity token
Used with PayPal Payment Data Transfer (PDT), a string value that identifies your account when you post a PDT form to PayPal.

IPN (Instant Payment Notification)
PayPal's system for handling real-time purchase confirmation via server-to-server communication.



JSON (JavaScript Object Notation)
A data format and syntax for passing data from one place to another. It's simpler than the other common data format, XML.



Person or entity in the business of selling goods or services.

Multi-user access
A PayPal feature through which Business account holders can let others log in and access their account to perform a limited set of functions.



NVP (Name/Value Pair)
One of the options for creating transactions in PayPal is to use name and value for a parameter. For example, AMOUNT=100.00, CURRENCY=USD. The AMOUNT and CURRENCY are the name (or key) and “100.00” and “USD” are the values. This provides a simpler method for development teams to implement APIs such as PayPal.



An open source encryption toolkit that implements the Secure Socket Layer (SSL) and Transport Layer Security (TLS) specifications. See www.openssl.org for more information.

Similar to an authorization, except that no hold is placed on the customer's funds. An order is similar to a traditional one-dollar authorization.



PayPal Payments Pro
A suite of payment options including Direct Payment and Express Checkout.

PayPal Payments Standard
Non-API-based payment options such as Buy Now buttons, Donation buttons, and Subscription buttons.

PDT (Payment Data Transfer)
A PayPal technology that allows the transfer of transaction data back to a merchant following a successful transaction completed on the PayPal site.

PEM (Privacy Enhanced Mail)
A key management architecture and infrastructure based on public-key certificate techniques. The API Certificate downloaded from PayPal is PEM-encoded.

An encrypted certificate format that combines a public certificate and associated private key. Sometimes referred to as PFX files.

Private key password
The string that you provide when encrypting your API Certificate.

In the context of the PayPal SDK, an object that contains API security credentials. For example: API username, API password, and API Certificate. Other possible parameters can be used for credentials, depending on the API that is being used.



A second authorization on an existing authorization that may be outside its authorization period (see Honor period). It is made to ensure the customer still has available funds for the transaction.

REST (Representational State Transfer)
A protocol or format for transmitting data with Web Services. This is a newer standard that requires less syntax than using SOAP and XML. REST can use XML to transmit data but also can use JSON (see JSON).



A testing environment that simulates the PayPal Live site. The Sandbox doesn't process actual funds.
Note: Sandbox and Live PayPal are completely different environments. Transactions conducted in one environment or account aren't seen in another environment or account.

SDK (Software Development Kit)
A collection of libraries and tools that eases the process of calling PayPal Web Service APIs by hiding SOAP or REST details through the use of simple method calls.

Settle (short for settlement”)
The actual transfer of funds from the buyer's account to the merchant's account.

Settlement file
A file, generated by PayPal and useful for reconciliation, that contains a comprehensive list of debits and credits for a single PayPal account over a 24-hour period.

Shared hosting
Deploying an application or website on an ISP server that other applications and websites also share.

An XML-based protocol used to invoke Web Services. Many of PayPal’s APIs are in SOAP.



Third-party authentication
A method of submitting PayPal API calls, most often used by hosted shopping carts, which involves making API calls on behalf of another business through the use of the Subject element in the request.

A string value that identifies a sequence of Express Checkout's API calls as belonging to the same checkout flow.

Transaction ID
A unique identifier for a PayPal transaction.



URL encoding
The transformation of reserved characters in a URL (such as colon, slash, spaces, question mark) to their hexadecimal equivalents to protect the data from being interpreted as a URL by a browser or web server, instead of a data value.



A PayPal account whose owner has validated the primary email address and confirmed a bank account associated with the account, or whose identity PayPal has otherwise confirmed.

Virtual Terminal
A PayPal-hosted website that lets you process phone, fax, mail, and in-person orders by entering payment details and processing the charge over the website.

To cancel a prior payment authorization or order.



Web Services
A web-based application that uses open, XML- and JSON-based standards and transport protocols to exchange data with calling clients.

Website Payments Pro
See PayPal Payments Pro.

Website Payments Standard
See PayPal Payments Standard.

WSDL (Web Services Description Language)
An XML format for describing network services as a set of endpoints operating on messages containing either document-oriented or procedure-oriented information. The PayPal WSDL describes all PayPal Web Service APIs and their input and output variables.



XSD (XML Schema Description)
An XML format for defining the structure, content and semantics of XML documents. PayPal XSD files describe the data types used in PayPal Web Service API calls.