Payment-processing glossary.

Authentication protocol adding verification layer for online payments (Verified by Visa, Mastercard SecureCode). Reduces chargebacks 40-60% but may impact conversion.

Electronic network for processing bank-to-bank transfers in the US. Slower than cards but lower cost. Common for recurring billing and high-ticket items.

Financial institution that processes card payments on behalf of merchants. Partners with PSPs to enable merchant accounts.

Specialized payment processing for adult content websites and services. Classified as high-risk due to elevated chargeback rates and regulatory scrutiny.

Non-card payment options like digital wallets, bank transfers, buy-now-pay-later, and crypto. Critical for international markets.

Regulations requiring financial institutions to detect and prevent money laundering. High-risk merchants face stricter AML compliance requirements.

Technical interface allowing merchants to integrate payment processing into their platform. MIDs provides REST and GraphQL APIs.

Percentage of payment attempts that are successfully approved. High-risk merchants typically see 60-75% approval rates; optimization can reach 85%+.

Process where issuing bank approves or declines a transaction. Happens in real-time (typically under 3 seconds).

Fraud prevention tool that matches billing address with card issuer records. Reduces fraud by 20-30% but can cause false declines.

Daily settlement process where authorized transactions are grouped and sent to acquiring bank for fund transfer.

First 6-8 digits of card number identifying the issuing bank and card type. Used for routing and fraud detection.

Payment gateway that enables merchants to accept Bitcoin and other cryptocurrencies. Eliminates chargebacks but introduces volatility and regulatory risks.

Database of blocked customers, cards, or IPs due to fraud or abuse. Critical for high-risk merchant protection.

Distributed ledger technology enabling transparent, immutable transaction records. Used in crypto payments, cross-border settlements, and fraud prevention.

Infrastructure connecting merchants, acquirers, and issuers (Visa, Mastercard, Amex). Sets interchange fees and compliance rules.

Automatically retrying declined transactions through alternative PSPs or payment methods. Can improve approval rates by 10-15%.

Payment solutions for online casinos and gaming platforms. Includes cards, e-wallets, crypto, and bank transfers. Requires specialized high-risk processing.

Merchant accounts for cannabidiol product sales. High-risk due to regulatory uncertainty and banking restrictions.

Forced transaction reversal initiated by cardholder through their bank. Costs merchants $15-100 per chargeback including fees and lost merchandise.

Percentage of transactions disputed by cardholders. Industry standard is <0.9%; high-risk merchants must stay under 1-1.5% to avoid account termination.

Alphanumeric code indicating why cardholder disputed transaction (fraud, product not received, etc.). Critical for representment strategy.

Web page or process where customers enter payment details to complete purchase. Optimized checkout can improve conversion by 20-35%.

Transaction where physical card is not used (online, phone, mail order). Higher fraud risk than card-present; requires different security measures.

Accepting cryptocurrency as payment. High-risk due to volatility, regulatory uncertainty, and money laundering concerns.

3-4 digit security code on back of card. Proves cardholder has physical card. Reduces CNP fraud by 25-40%.

Merchant accounts for dating apps and websites. High-risk due to high chargeback rates from subscription disputes and fraud.

Percentage of payment attempts that fail authorization. High decline rates (>25%) indicate routing issues, fraud filters, or technical problems.

Text appearing on cardholder's bank statement. Clear descriptors reduce "friendly fraud" chargebacks by 30-50%.

Smart authentication that applies friction only to risky transactions. Balances security with conversion rate optimization.

Technology that authorizes and processes online payments. MIDs gateway supports 150+ currencies and alternative payment methods.

Chip card standard (Europay, Mastercard, Visa). More secure than magnetic stripe; shifts fraud liability to non-compliant party.

Visa/Mastercard monitoring program for merchants exceeding 1.5% chargeback rate. Triggers fines ($5K-100K) and potential TMF listing.

Automated analysis of transactions for fraud indicators (velocity, geolocation, device fingerprint, etc.). Reduces fraud by 60-80%.

Chargebacks initiated by legitimate customers who don't recognize charges or seek refunds dishonestly. Accounts for 60-80% of chargebacks.

Merchant accounts for online gaming, iGaming, and gambling. High-risk due to regulatory complexity and chargeback potential.

Encrypted substitute for card data allowing secure storage for recurring billing. PCI-compliant alternative to storing actual card numbers.

Merchant account for businesses with elevated chargeback risk, regulatory scrutiny, or reputational concerns. Requires specialized underwriting.

Handling transactions over $500-1,000. Requires special fraud controls and underwriting due to elevated risk.

Fee paid by acquirer to issuing bank for each transaction (1.5-3.5% typically). Varies by card type, industry, and transaction characteristics.

Payment gateway supporting cross-border transactions, multiple currencies, and local payment methods. Essential for global high-risk merchants.

Financial institution that provides credit/debit cards to consumers. Authorizes or declines transactions based on cardholder account.

Identity verification process required for merchant onboarding. High-risk merchants face enhanced KYC including beneficial ownership disclosure.

Distributing payment volume across multiple PSPs to prevent downtime and optimize costs. Critical for high-volume merchants.

Mastercard Alert to Control High-Risk merchants database. Global blacklist preventing terminated merchants from opening new accounts for 5+ years.

Total percentage fee merchant pays for payment processing. Includes interchange, scheme fees, and processor markup. High-risk: 3-8%; low-risk: 1.5-3%.

Business bank account enabling merchants to accept card payments. High-risk merchants require specialized merchant accounts with higher reserves and fees.

Unique identifier assigned to merchant account by acquirer. Each processing relationship requires separate MID.

Payment transactions made via smartphone or tablet using mobile apps, browsers, or NFC technology (Apple Pay, Google Pay).

Digital wallet stored on mobile device for contactless payments (Apple Pay, Google Pay, Samsung Pay). Growing payment method for e-commerce.

Merchant accounts for nutritional supplements and health products. High-risk due to aggressive marketing, high chargebacks, and regulatory issues.

Merchant account held with non-domestic acquiring bank. Used by high-risk businesses facing domestic banking restrictions.

13-19 digit card number embossed on payment card. Contains BIN, account identifier, and check digit. Must be tokenized for PCI compliance.

Service model where PSP opens master merchant account and processes payments for multiple sub-merchants. Faster onboarding but shared risk pool.

Business model where company becomes master merchant and onboards sub-merchants under their account. Used by platforms like Shopify and Stripe.

Technology that securely transmits payment data between merchant, customer, and payment processor. Essential infrastructure for online payments.

Ways customers can pay: credit cards, debit cards, digital wallets, bank transfers, crypto, BNPL. High-risk merchants need diverse payment options.

Technology layer managing multiple PSPs, payment methods, and routing logic.

Dedicated webpage where customers enter payment information. Can be hosted (PSP-hosted) or embedded (merchant-hosted iframe).

Transfer of funds from merchant to third parties (affiliates, sellers, gig workers). Requires separate licensing and compliance in many jurisdictions.

Security standards for handling card data. Compliance mandatory for all merchants processing card payments. Violations risk $5K-100K monthly fines.

Fraud technique using fake emails/websites to steal payment credentials. Merchants must protect customers with security education and anti-phishing measures.

4-digit numeric password for debit card authentication. Required for card-present debit transactions and ATM withdrawals.

Company connecting merchants to payment networks and acquirers. MIDs integrates with 30+ acquiring banks for redundancy and optimization.

Automatic charging of stored payment method at regular intervals (subscriptions, memberships). Requires clear disclosure to avoid chargebacks.

Process of disputing chargeback by providing evidence transaction was legitimate. Success rate: 20-40% depending on reason code and evidence quality.

Withheld percentage of processing volume (5-20%) held by acquirer as security against chargebacks. Common for high-risk and new merchants.

Cardholder or issuing bank request for transaction details. Often precedes chargeback. Responding within 48 hours can prevent 30-40% of chargebacks.

Reserve funds released after set period (90-180 days). Protects acquirer from delayed chargebacks.

Transfer of funds from issuing bank to merchant account, typically within 24-72 hours. High-risk merchants may face longer settlement times.

Algorithmic selection of optimal PSP/acquirer for each transaction based on cost, approval rate, and performance. Can improve margins by 15-25%.

Payment solutions for sports betting and gambling platforms. High-risk due to regulatory complexity, licensing requirements, and chargeback risks.

Business model charging recurring fees. High chargeback risk from "subscription traps" requires clear terms, easy cancellation, and proactive customer service.

Database of merchants whose accounts were terminated. Same as MATCH List.

Replacing sensitive card data with secure tokens for storage and recurring use. Required for PCI DSS compliance in recurring billing.

Rate of transactions from single card, IP, or customer. Monitoring velocity prevents fraud (multiple rapid purchases indicate stolen card).

Merchant accounts for travel agencies, booking platforms, and tour operators. High-risk due to advance bookings, cancellations, and regulatory requirements.

Risk assessment process determining if merchant qualifies for processing and at what terms. High-risk merchants face stricter underwriting.

Visa's consolidated program tracking combined fraud and dispute activity at the acquirer/merchant level — it replaced the separate VDMP and VFMP with a single ratio.

Automated fraud detection analyzing transaction frequency patterns. Flags suspicious rapid-fire purchases from same source.

Web-based interface for manually entering card-not-present transactions (phone orders, MOTO). Used when customer cannot checkout directly.

Cancellation of authorized transaction before settlement. Prevents funds from being transferred. Must be done within 24 hours; after that, refund is required.

Real-time HTTP callback notifying merchant system of payment events (approval, decline, chargeback). Critical for automated order fulfillment.

Database of pre-approved trusted customers with reduced fraud screening. Improves approval rates and checkout experience for repeat customers.

Process of transferring funds from merchant account or customer wallet to bank account. Common in gaming, marketplaces, and gig economy platforms.