Smart Contract
Quick Answer
A smart contract is a self-executing program on blockchain that enforces agreement terms automatically — used in payments for escrow, settlement, revenue splitting, and conditional payments.
Full Definition
A smart contract is a self-executing program stored on a blockchain that automatically enforces the terms of an agreement when predefined conditions are met. Smart contracts eliminate the need for intermediaries — the code is the contract. In crypto payments, smart contracts handle escrow, automated settlement, revenue splitting, subscription billing, and conditional payments. They execute exactly as programmed, without downtime, censorship, or third-party interference.
Related Terms
Same-Day Settlement
Same-day settlement means merchants receive fiat in their bank account on the same day a crypto payment is made — significantly faster than card payments' 2-5 day settlement.
Sanctions Screening
Sanctions screening checks wallet addresses and entities against OFAC, EU, and UN sanctions lists to prevent prohibited transactions — a legal obligation for all payment providers.
SDK (Software Development Kit)
An SDK is a collection of pre-built code libraries that simplifies payment integration — typically a few lines of code to add crypto payment acceptance to any website or app.
Self-Custody
Self-custody means holding your own private keys with sole control over your crypto — no third party can freeze or seize funds. Core to blockchain's 'not your keys, not your crypto' principle.
Settlement
Settlement is the final, irrevocable transfer of funds completing a transaction. Crypto settlement occurs in seconds to minutes versus 1-5 business days for traditional payments.
Slippage
Slippage is the difference between expected and actual trade execution price. In crypto payments, DEX aggregators and tolerance settings minimise slippage during settlement conversion.