Chargeback Glossary
A complete chargeback glossary built for how disputes work today.
0-9
3D Secure (3DS)
Authentication protocol that can shift liability and reduce fraud disputes by verifying the cardholder.
3DS Liability Shift
A rule outcome where fraud liability moves away from the merchant when valid 3DS authentication is used.
A
A2A Payments
Also known as Account-to-Account Payments.
ABA (American Bankers Association)
A trade association/lobby for the US banking industry.
ABA Routing Number
A unique nine-digit number, usually found at the bottom of a check, that the bank uses to identify the bank and direct ACH debits and credits.
Accidental Friendly Fraud
Accidental friendly fraud means a situation where a customer abuses the chargeback process, but does so without any malicious intent.
Account Activity Logs
Session and usage logs showing customer behavior, often used as compelling evidence in disputes.
Account Takeover Fraud
Account takeover fraud, or ATO fraud, is a form of identity theft by which a third party gains access to unique details of a trusted user’s online accounts. Fraudsters can pose as the real customer to change account details, make purchases, withdraw funds, and even leverage the stolen information to access other accounts.
Account-to-Account Payments
Account to account (or “A2A”) payments are a payment method that allows users to directly transfer money from one party’s account to the account of a second party. Unlike other payment methods, like credit or debit card, A2A payments are done without requiring additional intermediaries.
ACH
Automated Clearing House. A group of processing providers linked by a computer network to process electronic payment transactions between financial institutions.
ACH Dispute
An ACH payment dispute is a situation where one party involved in an ACH transaction raises a concern or disagreement over the legitimacy, accuracy, or authorization of the transaction.
Acquirer
A financial institution that is a member of Visa and/or Mastercard and maintains the merchant credit card processing relationship. The acquirer receives all transactions from the merchant to be distributed to the issuing banks.
Acquiring Bank
A financial institution that is a member of Visa and/or Mastercard and maintains the merchant credit card processing relationship. The acquirer receives all transactions from the merchant to be distributed to the issuing banks.
Ad Fraud
Digital ad fraud means any attempt to fraudulently siphon revenue from businesses through online advertising. Click fraud, domain spoofing, and cookie stuffing are all examples of ad fraud.
Address Fraud
Address fraud is a tactic by which fraudsters use stolen credentials to access a user’s account and change their physical address information. Address fraud enables other fraudulent behaviors, like redirecting goods purchased by an authorized user to the fraudster’s address.
Address Verification Services (AVS)
A fraud and chargeback prevention tool that verifies a buyer by matching the billing address entered by the user against the on-file address associated with the cardholder's account.
Adjustment
A debit or credit to a cardholder or seller account to correct a transaction error.
Affiliate Fraud
Affiliate fraud means a broad category of illicit or unscrupulous tactics designed to generate unearned commissions from an advertiser’s affiliate marketing program.
AFT Transaction
An Account Funding Transaction (AFT) is a type of transaction used in the financial industry where a payment service provider, such as a bank or a financial institution, directly debits a payment from a cardholder's account. This is usually used for services like loading funds onto prepaid cards, e-wallets, or other financial accounts.
Alerts
A chargeback prevention tool that notifies sellers of a dispute, allowing the merchant to avoid the pending chargeback before it is officially filed (usually by refunding the transaction).
Alipay
Alipay is a mobile payment app. It functions as both a digital wallet and a payment app, enabling users to transfer money from person to person, or to businesses.
Allocation
Mastercard dispute stage where liability is allocated between parties based on rules and evidence.
Altered Card
A card on which the original embossed or encoded information has been altered for fraudulent purposes.
Alternative Payments
An alternative payment method can be any means of paying for goods or services that does not involve cash, check, or a credit card issued by a major bank. Mobile payments, eWallets, bank transfers, and some prepaid cards are examples of alternative payment methods.
American Express
A company that specializes in the issuance of “Travel and Entertainment” (T&E) cards. American Express services the cards it issues, serving as its own transaction processor with its own processing network.
American Express SafeKey
SafeKey is a 3-D Secure service specific to Amex that leverages real-time authentication software to verify card users before a transaction. This data is used to detect stolen cards, identify unauthorized users, and thwart fraud attempts before a transaction can be processed. This technology aims to help merchants improve their anti-fraud and chargeback prev
Angler Phishing
Angler phishing is a social engineering attack where scammers impersonate a company’s customer support on social media and intercept customers. Once the phishing victim is hooked, the scammer can exploit the trust users have in your brand.
API
Advanced Programming Interface – APIs allow users to program to a pre-constructed interface, instead of individually programming a device or piece of software.
Apple Pay
A contactless payment service created by Apple Inc. that allows users to make payments in person, in iOS apps, and on the web.
Apple Pay Later
Apple Pay Later is a buy now pay later (BNPL) product available to Apple users. It allows online shoppers to break purchases up into four even installments, making it easier to manage large purchases.
Apple Wallet
A digital wallet developed by Apple Inc. that allows users to store credit and debit cards for use via Apple Pay. It can also electronically store other types of items, such as boarding passes, ID cards, business credentials, event tickets, public transportation passes, and so on.
Approval Response
A code generated from the credit card processing networks and the customer's issuing credit card bank, indicating that a transaction authorization request has been approved.
Arbitration
A procedure used by an acquirer (on behalf of the merchant) to resolve a chargeback-related dispute between the merchant and the card issuer. Arbitration comes after representment, and involves escalating a dispute to be resolved by the card network in question.
Artificial Intelligence
As it relates to chargebacks, technologies that can help predict potential vulnerabilities and fraud risks before they materialize. AI can process and analyze data at an unprecedented scale and speed than manual analysis.
ASP
Application Service Provider. An organization that hosts software applications on its own servers and delivers application functionality and services across a network to subscribing customers.
Association
A network of members licensed by card brands (Visa, Mastercard, etc.) to issue credit or debit cards, or acquire card payment transactions, on behalf of their customers.
ATM
Automated Teller Machine. An unattended computer terminal that performs basic consumer financial functions (dispensing cash, for example) to cardholders holding the correct payment card and PIN.
ATM Card
A plastic card which, when used with the correct PIN, can be used to make deposits, cash withdrawals, account transfers, and other related functions from an ATM. An ATM card cannot be used to make transactions, however, in the same way a debit card can.
ATO Fraud
Also known as Account Takeover Fraud.
Auto Representment
Automatically sending information to resolve a chargeback on a merchant’s behalf, without the need for merchant intervention.
Auto-Accept
Automatically accepting/losing a dispute based on rules, cost thresholds, or low win probability.
Auto-Fight
Automatically initiating representment based on rules, strong evidence, and expected ROI.
Average Monthly Volume
Total amount of sales for the year, divided by 12.
Average Ticket
Total net merchant sales divided by the number of transactions in that same year.
AVS Result
Address Verification Service result indicating whether billing address data matched issuer records.
B
B2B
Refers to one business primarily communicating with or selling to another business. This is in contrast to business-to-consumer, or B2C, operations.
Back-End Processor
A data processing company that contracts with an acquirer to receive and forward settlement batches to issuing banks in a scheduled time window. In some cases, the acquirer may act as its own back-end processor.
Bank Card
A card issued by a banking institution, usually with a Mastercard or Visa brand.
Bank-Initiated Chargeback
A chargeback originating from the card issuer, usually for some type of merchant error such as late processing.
Basis Point
A basis point, frequently abbreviated as “bp” or “bps,” is a standard unit of measurement in finance. One basis point represents one-one hundredth of a percent, or 0.01%, of the subject being measured.
Batch
A group of approved credit card transactions, usually accumulated during one business day.
Batch Deposit
The electronic depositing of a batch file transmitted to the transaction processor for settlement.
Batch Processing
The authorization of transactions offline when immediate approval is not required. Batch processing is generally used with mail/telephone order transactions.
Behavioral Fraud Detection
Behavioral fraud detection is a strategy involving an AI application that is used to analyze consumer behavioral patterns to detect fraud. This analysis encompasses a plethora of data points, such as usual login times, typical transaction types, and even subtle habits in mouse and keyboard usage.
Billing Descriptor
A billing descriptor is the identifying text displayed on a customer's credit or debit card statement. Descriptors provide information about a transaction and the business related to the charge.
BIN (Bank Identification Number)
The 6-digit range of numbers assigned by the Federal Bureau of Standards and used by card companies to identify their financial transactions. The Discover range begins with '6' (6xxxxx); the Mastercard range begins with '5' (5xxxxx); and the VISA range begins with '4' (4xxxxx).
BIN Attack
A BIN attack occurs where a scammer sets a BIN (or “Banking Identification Number”) in place, then cycles through random numbers, trying to guess a valid combination of a 16-digit credit card number, expiration date, and CVV number.
Biometric Card
Biometric cards are chip cards with a built-in thumbprint reader. They combine a fingerprint scanner with conventional chip-and-PIN technology, thereby improving the versatility and security of tech-enabled credit and debit cards.
Biometric Payments
Biometric authentication is the practice of identifying individuals based on distinct physiological characteristics that are considered unique to each person. These can include fingerprints, facial recognition, DNA matching, iris recognition, heart rhythm, etc.
Biometric Spoofing
Biometric spoofing is an identity theft attack method by which a fraudster attempts to compromise a system secured by biometric detection tools. This is done by using a spoofed (i.e. fake) biometric indicator based on a sample stolen from an actual user.
Bitcoin
The most common brand of cryptocurrency, sometimes used as a genericism to refer to all cryptocurrencies.
Blockchain
A shared online ledger that facilitates the process of recording transactions and tracking assets across a peer-to-peer network.
BNPL Fraud
Buy now pay later fraud, or BNPL fraud, means any fraudulent activity in the “buy now pay later” space. In other words, it’s a scam by which a fraudster abuses a BNPL payment option to conduct a payment fraud attack.
BOPIS Fraud
BOPIS fraud means any criminal activity committed through “buy online pickup in store” channels. Here, criminals can pick up online orders at the physical store as a way of bypassing normal security protocols deployed in both eCommerce and physical retail.
BOPUS
The “buy online, pick up in-store,” model often abbreviated as “BOPUS,” is a shopping method by which customers can browse for goods and make purchases online. The buyer can then pick those items up from the retail provider’s location, rather than wait for delivery like conventional eCommerce.
Botnet Attack
A botnet attack is an attempt by a hacker to conduct large-scale, automated cyberattacks through a massive network of hijacked, internet-connected devices, rather than manually controlling one single machine.
Brick-and-Mortar
A physical store location or locations.
Business Card
A payment card usually issued to, and used by, owners of small businesses. Similar to the corporate card, but issued to a business with fewer employees. Each employee is responsible for his or her purchases.
Business Continuity Plan
A business continuity plan is a proactive strategy that outlines the procedures and instructions an organization must follow in the face of disaster to ensure that critical functions continue to operate. The BCP cover identification of potential risks and the creation of recovery protocols to minimize disruption and facilitate fast resumption of operations.
Business Email Compromise
Business email compromise, commonly abbreviated to BEC, is a scam conducted through email. With a BEC attack, an email will appear to come from a legitimate source within the business. However, the sender is an imposter attempting to trick other members of the organization to divulge sensitive information.
Business-to-Business
Refers to one business primarily communicating with or selling to another business. This is in contrast to business-to-consumer, or B2C, operations.
Bust-Out Fraud
Bust-out fraud is a practice by which a fraudster acquires a credit card account using false information, then leverages that account to develop an extended line of credit. When the available credit is high enough, the fraudster maxes out the cards and walks away without paying, effectively “busting out” of the scam.
Buy Now Pay Later
A “buy now pay later” payment is essentially a consumer loan that allows shoppers to finance purchases in installments; usually four to six installments over a short period of time. BNPL payments may be offered by merchants at the point of purchase. They are available and managed by several third-party financial applications including Affirm, Klarna, and Zip
Buyer’s Remorse
Buyer's remorse is a psychological response that arises when a buyer believes they may have made an incorrect or unwise purchasing choice. This often happens when the excitement of a new purchase wears off and is replaced by concerns about its value, necessity, or quality.
C
California Consumer Privacy Act
The California Consumer Privacy Act of 2018 is a state law that enhances privacy rights and consumer protections for California residents. Specifically, the CCPA grants individual consumers, households, employees, contractors, and jobseekers greater control over their personal information through four core rights: to know what information is being collected.
Capture
Receiving and storing transaction data at the processor’s host computer, to be submitted later for processing and payment.
Card Association
A network of members licensed by card brands (Visa, Mastercard, etc.) to issue credit or debit cards, or acquire card payment transactions, on behalf of their customers.
Card Cloning
Card cloning is a form of payment fraud where criminals create a duplicate of a legitimate payment card by copying its data, often through techniques like skimming or data breaches. This counterfeit card can then be used to make unauthorized purchases or withdraw cash, leaving the cardholder vulnerable to financial losses.
Card Cracking
Card cracking is a second-party fraud tactic where a fraudster manipulates a victim into sharing their debit card information by advertising it as an easy way to make money.
Card Identification Number (CID)
An American Express and Discover verification process for more secure card-not-present purchases.
Card Identifier (CID)
An American Express and Discover verification process for more secure card-not-present purchases.
Card Network
A network of members licensed by card brands (Visa, Mastercard, etc.) to issue credit or debit cards, or acquire card payment transactions, on behalf of their customers.
Card Reader
Input device on a card terminal that translates the information stored on the card’s chip or magnetic stripe.
Card Security Code
A three- or four-digit value printed on the signature panel of credit cards which helps validate that the buyer of the card is an authorized user who has the physical card in their possession.
Card Testing
Card testing, also known as “card cracking,” is a type of credit card fraud that involves testing the validity of a credit card to determine if it's a valid, active card. This is done by charging a small amount to the card. If the charge goes through, the fraudster knows that the card is active and can then use it for larger purchases.
Card-Linked Marketing
Card-linked marketing is a method of delivering targeted ads to consumers via their online bank statements. These digital offers are uploaded straight to their credit or debit account and can be used automatically at checkout.
Card-Not-Present (CNP)
A type of card transaction where the card is not present at the point of sale for the magnetic stripe to be read, such as an eCommerce transaction. These are considered higher risk transactions.
Card-Not-Present Chargeback
A card-not-present chargeback is a payment reversal conducted by a bank in response to a card-not-present (i.e. online) purchase. This could happen because of fraud or merchant abuse.
Card-Not-Present Fraud
Card-not-present fraud, or CNP fraud, is when a fraudster illegally uses stolen credit card information to make purchases through a remote channel. Card-not-present fraud usually occurs online, but can happen via any remote channel, including phone or email.
Card-on-File Transactions
A card-on-file transaction is a transaction conducted using consumer pay payment information stored by the merchant and attached to a customer’s profile. That information can be used to conduct future purchases, with a streamlined process for the cardholder, or even no need for the cardholder’s direct involvement at all.
Card-Present
A type of transaction where the card is physically present and swiped or dipped through an electronic device that reads either the card’s chip or its magnetic stripe.
Cardholder
The person to whom a payment card is issued, or an additional person authorized by the original cardholder to use the card.
Cardholder Account Number
A sequence of numbers assigned specifically to a cardholder account to identify the issuer, type of payment card, and authorized user.
Cardholder Bank
Any financial institution that issues credit cards and maintains card-accessed customer credit lines on behalf of card networks.
Cardholder-Initiated Chargeback
A chargeback initiated by a cardholder who disputes a charge appearing on a monthly billing statement or online account.
Carrier Scan Events
Shipment tracking scan timeline from the carrier used to validate transit and delivery.
Cart Abandonment
The result of a shopper starting an online checkout process, but dropping out of the process before completing the purchase.
Cash Advance
In the context of credit cards, this is the act of withdrawing cash against one’s credit card limit. This is the only method of receiving cash from a credit card that is approved by the bankcard associations.
Cash Disbursement
A cash disbursement means any distribution of funds in the form of cash. Within the payments sector, it usually implies withdrawals from an ATM or transactions that involve cashback. Such transactions are generally performed using debit cards rather than credit cards, and are often regulated differently compared to regular purchases.
CCPA
Also known as California Consumer Privacy Act.
CE Deflection
Verifi capability that uses compelling evidence signals to help issuers stop invalid disputes from turning into chargebacks.
CHAPS (Clearing House Automated Payment System)
A UK-based payment system for high-value, same-day settlement of transactions.
Chargeback
A bank-enforced refund for an amount or action disputed by either the cardholder or the card issuer. A chargeback will cause the amount of the original sale to be temporarily reversed, pending any input from the seller.
Chargeback Alerts
A chargeback prevention tool that notifies sellers of a dispute, allowing the merchant to avoid the pending chargeback before it is officially filed (usually by refunding the transaction).
Chargeback Analyst
A chargeback analyst is a payments industry professional who works with banks, processors, and card networks on behalf of a merchant. Their primary job is to analyze chargeback data to help resolve customer disputes and eliminate chargeback risk factors.
Chargeback Blacklist
A chargeback blacklist is a database containing details on persons, institutions, or locations that present a high chargeback risk to you as a merchant. Future transaction attempts submitted by blacklisted customers are blocked based on inclusion on the list.
Chargeback Decisioning
Process of choosing whether to fight, accept, or prevent disputes based on evidence, cost, and risk.
Chargeback Fee
The amount assessed by the acquirer for processing chargebacks. The amount will vary by processor, but generally runs in the $20-100 range.
Chargeback Fraud
A type of fraud that is “friendly” in that it originates from customers or other known entities. Some cases are the result of a consumer mistake. Others come from buyers attempting to “game” the chargeback system for personal gain.
Chargeback Insurance
Chargeback insurance is a policy that protects merchants from costs related to credit card fraud, or instances where a credit card was used by someone other than the card carrier to make a fraudulent purchase. The policy covers a merchant’s liability for any claims arising from these transactions.
Chargeback Life Cycle
The chargeback life cycle describes the chargeback process from start to finish. This includes the parties involved and the wait times and responses imposed by each for the duration of that chargeback ‘life span.’
Chargeback Management Software
Chargeback management software can refer to any program or platform that assists merchants in the process of automating chargeback prevention and/or contesting invalid disputes.
Chargeback Manager
A chargeback manager is a specialist who implements chargeback policies and procedures to prevent chargebacks. They work to engage suspected friendly fraud attacks through representment and keep the business’s chargeback ratio within an acceptable range.
Chargeback Mitigation Plan
A chargeback mitigation plan means the set of processes and best practices that merchants can implement to decrease the risk of chargebacks in a strategic manner.
Chargeback Monitoring Program
A chargeback monitoring program is an initiative maintained by one of the global card networks, aimed at tracking merchant activity and identifying those who receive an excessive number of disputed transactions. These disputes can be — but are not necessarily — tied to a fraud-related reason code.
Chargeback Process
The chargeback process encompasses all the steps that take place between a cardholder's initial inquiry or dispute, all the way through the resolution of that dispute. Multiple parties may be involved, such as issuers, acquirers, merchants, vendors, and card networks.
Chargeback Rate
A metric based on the ratio between the number of transactions a merchant processes and the number of chargebacks received in a given period. Merchants are penalized for excessive chargebacks that occur in the given period.
Chargeback Ratio
A metric based on the ratio between the number of transactions a merchant processes and the number of chargebacks received in a given period. Merchants are penalized for excessive chargebacks that occur in the given period.
Chargeback Reason Code
A numerical code which identifies the specific reason for a chargeback. Mastercard and Visa each have their own chargeback codes.
Chargeback Reduction Plan
A chargeback reduction plan means a formal document, requested of a merchant by a bank or card network, that outlines specific steps the merchant will take to reduce chargeback occurrences and mitigate future risk.
Chargeback Report
A chargeback report is a periodic report that compiles key chargeback stats to track trends and identify correlations between disputes and other business data. Chargeback reports can help merchants identify opportunities to increase efficiency, improve processes, and prevent future chargebacks.
Chargeback Reversal
A chargeback reversal is a formal acknowledgment by an issuing bank that a transaction was valid, and that the cardholder’s chargeback claim was invalid. When a merchant wins a chargeback reversal, the bank will return the funds being disputed.
Chargeback Win Rate
A chargeback win rate is the rate at which a merchant disputes and successfully recovers transactions following an initial chargeback. This figure is expressed as a percentage of overall chargebacks.
Chargeback-to-Refund Ratio
Metric comparing chargebacks to refunds, used to evaluate customer experience and dispute drivers.
Check Card
A bankcard used to purchase goods and services and to obtain cash by debiting the cardholder’s personal checking account. During online debit transactions, the transaction must be accompanied by the correct PIN.
Check Verification
A service that provides merchants with some security against bad checks by matching the buyer against a national negative file database to flag outstanding or bad checks.
Checkout
In eCommerce, the process of providing personal payment information to purchase selected items.
Chip Card
Payment cards with an embedded microchip, used for enhancing security and offering additional cardholder services.
Chip-and-PIN Technology
Chip-and-PIN means a fraud detection method which uses tokenization technology to transmit one-time-use encrypted information in place of cardholder data, combined with a PIN (Personal Identification Number). Because the cardholder’s data is never transmitted, it is much harder for hackers to intercept and steal it.
Clean Fraud
Clean fraud means any fraud attack where a fraudster uses a credit card to make a purchase, then manipulates the transaction so as to bypass fraud detection devices. The name means the fact that the transactions appear “clean” and will not be picked up by fraud filters or blacklists.
Clearing
The transfer of data between issuers and acquirers.
Click Fraud
Click fraud is a form of ad fraud where a third party deliberately clicks on an advertising link with no intention of doing business with the advertiser, as a way of artificially inflating click-through stats. It can happen with any sponsored ad or link, but it’s most prevalent (and most damaging) in affiliate marketing.
Clone Phishing
Clone phishing is a phishing tactic by which a scammer impersonates a well-known brand, then sends emails or other messages on that brand’s behalf. The goal is to trick victims into clicking a link that will infect their device with malware or compromise their identity in some other way.
Close
Sending a merchant’s completed transactions to the host for processing.
Cloud POS System
A cloud point-of-sale (POS) system is a software solution that allows businesses to accept and manage transactions. What sets this apart from traditional POS systems is that all data is stored on the internet in secure servers (the "cloud") rather than locally on the machine or system itself.
Collaboration
Mastercard dispute stage that enables early dispute resolution and information exchange between parties.
Commercial Cards
Formal name for three types of payment cards: a corporate card, purchasing card, or a business card.
Compelling Evidence
In chargeback management, compelling evidence concerns formal written or electronic documentation intended to verify the legitimacy of a transaction. This evidence must prove the merchant followed established transactional procedures, and be submitted to the bank (along with other documentation) within a specified timeframe.
Compelling Evidence 3.0 (CE 3.0)
Visa evidence standard used to prove the legitimate cardholder participated in prior transactions, often used to counter friendly fraud claims.
Computer Fraud & Abuse Act
The Computer Fraud and Abuse Act (CFAA) of 1984 is a United States federal law that primarily addresses the unauthorized access and use of computers and related systems. The law aimed at protecting sensitive information, and setting penalties for unauthorized access.
Connective eCommerce
Connective eCommerce means a risk-reduction strategy for opening an online store without investing in web developers, advertising, or inventory.
Consumer Clarity
A dispute resolution tool created by Ethoca which enables real-time data sharing between participating merchants and cardholders, potentially resolving Mastercard transaction inquiries that would otherwise become chargebacks.
Contactless Payment Fraud
Contactless payment fraud means any attempt to make unauthorized purchases using information obtained by hijacking a near-field communication (NFC) -enabled transaction.
Contingent Reimbursement Model
The Contingent Reimbursement Model (CRM) is a UK payments initiative intended to reimburse victims of authorized push payment fraud. In essence, the CRM is a reserve of cash that signatories to the Code agree to fund. The reserve can then be used to reimburse victims of APP fraud attacks.
Corporate Card
A payment card usually issued to the employees of a large corporation, for which the corporation assumes all liability for the card’s usage.
Counterfeit Card
A plastic card which has been fraudulently printed, embossed or encoded to appear to be a genuine bank card.
Credential Stuffing
Credential stuffing is a brute force fraud tactic that involves using bots to automatically attempt to enter stolen username and password pairs into a web form. The term “credential stuffing” means the fact that bots can attempt hundreds of sets of login credentials per minute until they find a match.
Credit
A refund or price adjustment given for a previous purchase.
Credit Card
A plastic card attached to a limited line of credit, which can be used to purchase goods and services, or to obtain cash advances on credit.
Credit Card Decline Code
A credit card decline code is a negative message issued in response to a request for authorization during a transaction. This occurs when a payment can’t be processed for a specific reason; it may be declined by the processor or payment gateway, or by the customer’s issuing bank.
Credit Card Decline Rate
A credit card decline rate represents the cumulative number of declined credit card transactions a merchant attempts, as a portion of the total number of transactions in a given period of time. Credit and debit cards may be declined for a lack of funds available in the cardholder’s account, incorrect payment information or PIN entries, outdated AVS informati
Credit Card Imprinter
A credit card imprinter is a non-electric mechanism used to create a physical imprint of a customer's credit card, capturing their card information on a carbon-copy sales slip. The imprinter is sometimes derisively called a "knuckle-buster" because of the manual effort required to operate it.
Credit Card Processing
A procedure used by merchants to send credit card transaction data to the issuing bank, enabling the merchant to be paid for the transaction in question.
Credit Slip
A form stating a refund or price adjustment will be credited to a cardholder account. Also referred to as a credit voucher or credit draft.
Credit/Pending Settlement
Transactions that have been entered as credits, but have not yet been submitted for settlement. Once a credit has been settled, its status changes to “credited”.
Cross-Border eCommerce
Cross-border eCommerce encompasses any online trade occurring between a business (retailer or brand) and a consumer located in a different country or administrative region.
Cryptocurrency
Digital currency (exchanged through a computer network) which is not overseen or maintained by a central authority, such as a government or bank.
Cryptography
The process of protecting information by transforming it into an unreadable format which can only be uncoded by the intended recipient.
CSC
A three- or four-digit value printed on the signature panel of credit cards which helps validate that the buyer of the card is an authorized user who has the physical card in their possession.
CVC2
Card Validation Code. Mastercard term for the three-digit code known generically as a card security code
CVV/CVC Result
Card security code verification result showing whether the provided CVV/CVC matched issuer records.
CVV2
Card Verification Value. Visa term for the three-digit code known generically as a card security code.
Cyber Shoplifting
Deliberately abusing the chargeback system to obtain merchandise without payment.
Cybercrime
Cybercrime is any illegal activity that uses or targets a computer, computer network, or networked device to commit financial fraud, identity theft, data hacks, and other unlawful activities.
D
DBA
“Doing Business As.” The name a business uses to operate.
dCVV2
dCVV2, or a dynamic CVV2 code, is a technology that allows cardholders to enter a dynamic (or changing) CVV code at the time of checkout. Rather than rely on the static 3- or 4-digit code printed on a physical card, the customer can enter a code that changes on a frequent basis.
Debit Card
A bankcard used to purchase goods and services and to obtain cash by debiting the cardholder’s personal checking account. During online debit transactions, the transaction must be accompanied by the correct PIN.
Debit Network
Debit networks are payment processing systems that facilitate transaction routing and communication between all stakeholders in a debit card transaction.
Decline
A response from the card issuer denying the use of a card for the attempted transaction.
Delivery Confirmation
Delivery confirmation is an electronic notification received from a shipping provider. This notification informs the sender that a shipment has reached its final destination.
Denial-of-Service Attacks
A Denial of Service attack (or “DoS attack”) is an interruption in an authorized user's access to a computer network. This is often done maliciously by attackers who overload network servers through automated activity.
Device Fingerprint
A device-level identifier used to link sessions/transactions and detect anomalies or fraud.
Device Fingerprinting
Device fingerprinting is a forensic technique used to identify a device. The methodology can gather unique information based on device configurations, as well as hardware and installed software. Each piece of data helps create a unique picture of the device in question, like the lines of a human fingerprint.
Digital Footprint
As the name implies, a “digital footprint” generally means the trail that you leave online. It’s a composite profile, assembled based on many small pieces of data produced through your online activity.
Digital Wallet
A financial transaction app which electronically stores payment information, allowing the user to pay for purchases directly from a mobile device instead of using a physical payment card. Also known as an eWallet or mobile wallet.
Dip
The act of inserting a chip card into a terminal for use.
Direct Deposit
The deposit of funds electronically into a bank account, rather than through a physical check.
Direct Response
Term used to describe a merchant processing primarily card-not-present transactions.
Discover ProtectBuy
ProtectBuy is a 3-D Secure service specific to Discover, which implements real-time authentication software to verify credit card users before a transaction.
Disposable Email
Disposable email addresses (DEAs) are temporary, throw-away email addresses. They are tied to nonexistent inboxes, and are deleted after a set amount of time.
Dispute Administration Fee
The Dispute Administration Fee, or DAF, is a fee assessed by Mastercard as part of the chargeback process in the EU. Mastercard generates a DAF for each chargeback, second presentment, and arbitration chargeback. The fee is then paid to the sender and charged to the receiver of the respective chargeback cycle.The Dispute Administration Fee, or DAF, is a fee
Dispute Fee
Fee charged by a processor/acquirer for handling a dispute, often not refunded even if the merchant wins.
DoS Attack
Also known as denial-of-service attack.
Double Refund
A double refund chargeback occurs when a cardholder requests a refund for a transaction, then files a chargeback for the same purchase. The merchant dutifully refunds the charge, unaware that the cardholder plans to dispute the charge and get their money back twice.
Dropshipping
Dropshipping is a retail business model where the merchant runs an online store, then sends orders to a vendor or manufacturer, which ships directly to the buyer. The merchant is not required to buy, receive, store, or ship goods they sell. These operations are outsourced to a third-party vendor, while the merchant effectively operates as a middleman.
Duality
A financial institution which is a member in both Mastercard and Visa associations.
Dynamic Currency Conversion
Dynamic currency conversion, or DCC, is a point-of-sale payment option that allows cardholders from abroad the option of paying in the local currency or their own currency. DCC usually incurs a fee, which may be variable and pegged to the currency in question.
E
eBay Resolution Center
The eBay Resolution Center is a dedicated platform designed to help both buyers and sellers resolve issues that may arise during the course of a transaction. It serves as a centralized hub for managing disputes, claims, and appeals in a structured and efficient manner.
ECI Indicator
In simple terms, an Electronic Commerce Indicator (ECI) is basically a 3-D Secure response code. The ECI value tells you what to do next in a 3DS transaction — proceed, reject the purchase, or try again.
eCommerce
The sale and purchase of goods or services via the internet.
EDC
Also known as Electronic Draft Capture.
EFT
Also known as Electronic Funds Transfer.
Electronic Draft Capture
Sending the information about each credit card transaction to the issuing bank electronically through the point of sale terminal.
Electronic Fund Transfer Act
The Electronic Fund Transfer Act is a piece of US legislation that requires banks to provide certain information to customers regarding electronic fund transfers (EFTs). It also regulates the way banks must respond to consumer complaints and sets limits on liability for lost or stolen debit cards.
Electronic Funds Transfer
An electronic funds transfer (EFT) is any exchange which involves the ordering, instructing, or authorizing of a financial institution to debit or credit a consumer's account via an electronic terminal, telephone, computer, or magnetic tape. The transmission of money in an EFT is a digital transaction, meaning there is no need for a paper document to verify
Electronic Payments Network
The Electronic Payments Network (EPN) is a privately-owned automated clearinghouse (ACH) system.
Encryption
Method of scrambling data to protect a cardholder’s personal information.
Ethoca Alerts
Ethoca chargeback alerts is the flagship offering from Ethoca, a Mastercard company. Alerts give advance warning if a cardholder initiates a transaction dispute. That advance notification gives you a window where to contact the customer directly, preventing the chargeback.
Ethoca Consumer Clarity
Ethoca tool that provides transaction details to help issuers identify merchants and reduce cardholder confusion-driven disputes.
Expiration Date
The date after which a payment card becomes invalid and should no longer be accepted.
F
Factoring
When a legitimate merchant processes another merchant’s transactions in return for payment. This practice is forbidden by the card associations.
False Decline
A false decline on a credit card or debit transaction occurs when a legitimate card purchase is rejected by mistake. This may be done by either the merchant or the issuing bank.
Family Fraud
Family fraud is a type of eCommerce fraud that occurs when an individual uses the personal information of a family member to make unauthorized purchases or carry out other unauthorized financial transactions.
FedNow Service
FedNow is an instant payments platform devised by the US Federal Reserve. It allows users of participating banks and credit unions to transmit and settle funds in mere seconds, rather than days.
Financial Institution
Any organization in the business of moving, investing or lending money, dealing in financial instruments, or providing financial services. This includes commercial banks, thrifts, federal and state savings banks, saving and loan associations, and credit unions.
Floor Limit
In a business, the maximum amount that can be charged to a credit card without requiring authorization from the card association.
Foreign Exchange Rate
The rate at which one currency may be converted into another to obtain the same buying power.
FRAML
FRAML is an acronym that stands for “fraud and anti-money laundering.” FRAML isn’t a tool or a tactic. Instead, it’s a unified strategy that combines your fraud detection, prevention, and resolution efforts with initiatives that help you stay in compliance with anti-money laundering (AML) regulations.
Fraud as a Service
Fraud as a Service is a process by which an individual bad actor provides tools and services to others to facilitate their commission of fraudulent online activity. FaaS can involve diverse tactics for perpetrating fraud.
Fraud Filter
A fraud filter is any technology designed to analyze transaction data and flag commonly-recognized signs of fraud. These fraud tools are designed to warn users of potentially fraudulent transactions, letting users stop and reject untrustworthy transactions.
Fraud Rate
Percentage of transactions flagged as fraud, used for monitoring programs and risk decisions.
Fraud Scoring
Fraud scoring means the process of quantifying the level of risk involved in a transaction. Machine learning technology examines each transaction based on dozens of different indicators, then assigns a simple numeric score representing the transaction's risk level.
Fraudster
Any party attempting to misuse a credit card system for personal gain.
Friendly Fraud
A type of fraud that is “friendly” in that it originates from customers or other known entities. Some cases are the result of a consumer mistake. Others come from buyers attempting to “game” the chargeback system for personal gain.
Front-End Network
Network provider responsible for authorizing and capturing transactions and forwarding the information to the back-end network.
G
GDPR
Also known as General Data Protection Regulation.
General Data Protection Regulation
An EU legal framework that sets guidelines for the secure collection and processing of individuals’ personal information, and governing how that data may be used.
Geolocation
Geolocation is a broad term that describes any technology which accesses your location using the GPS or IP data installed on your devices for the purpose of locating you. It can be used for fraud detection by helping to verify customers’ identities.
Gift Card
A reusable, stored-value card that is equivalent to cash and enables cardholders to make purchases at associated merchants.
Google Pay
Google Pay is a contactless payment platform that enables users to make payments without having to carry cards or cash. It uses a digital “wallet” that can store representations of multiple debit cards, credit cards, gift cards, and more.
H
Hard Decline
A declined authorization attempt. This may result from a lost or stolen card, pick-up card request, etc. Card transactions should not be reattempted following a hard decline.
High-Risk Business
A high-risk business is an operation that, for one or more reasons, is perceived by credit card processors or financial institutions to represent an elevated risk for chargebacks.
High-Risk Credit Card Processing
High-risk credit card processing is a subset of merchant payment processing services, targeted at merchants considered “high risk” by conventional banks. The processor will generally allow for greater risk exposure in exchange for higher fees.
High-Risk Merchant Account
A high-risk merchant account is a subset of services that allow businesses in high-risk verticals to accept card payments from customers. These accounts usually come with stricter requirements and stipulations than standard merchant accounts and will be costlier to maintain.
I
Identity Check
Mastercard Identity Check is the Mastercard-branded deployment of 3-D Secure 2.0 technology. The technology helps authenticate purchasers as authorized cardholders.
Identity Theft
Identity theft involves the unauthorized use of someone’s financial or personal information for fraudulent purposes.
Imprint
Using a manual imprinter to obtain an emboss of credit cards which cannot be swiped or dipped through a terminal.
Independent Sales Organization
An Independent Sales Organization, or ISO, is a specialized third-party company that sells and manages credit card processing services outside of a bank or other financial institution. This service is usually provided in exchange for a percentage of the merchant’s sales.
Insider Fraud
Insider fraud means fraudulent activities committed by people with access to an organization’s financial systems.
Integrated Payment System
An integrated payment system is an automated payment processing platform. It takes transaction data from the point of sale, sharing information directly with other connected systems without manual input.
Interchange
The exchange of transaction data, specifically between acquiring and issuing institutions.
Interchange Fees
Fees collected from acquirers on the value of their card sales and paid to issuers. Acquirers usually recoup these fees from their merchants.
Interchange Network
An electronic network, maintained by card networks, which exchanges data relating to the value of card sales and credits among issuers and acquirers.
Interchange-Plus Pricing
Interchange-plus pricing, also known as “cost-plus,” is a pricing model for payment processing. It’s a combination of your predetermined interchange fee, plus a markup assessed by the processor.
Internet Service Provider
An organization that provides connections between users and the internet.
IP Geolocation
Location signal derived from IP address used to validate customer behavior and detect risk.
ISO 20022
ISO 20022 is an international messaging standard for financial institutions. It was designed to provide a standardized method for sending messages and exchanging payment data using both Latin and non-Latin characters.
ISO country codes
ISO country codes are standardized two- or three-letter abbreviations developed by the International Organization for Standardization to represent countries and territories in international operations like banking and shipping.
ISP
Also known as Internet Service Provider.
Issuer
Any financial institution that issues credit cards and maintains card-accessed customer credit lines on behalf of card networks.
Issuer Decline
An issuer decline code is a code supplied to a merchant by an issuing bank signifying rejection of a credit card transaction. It means the issuer has placed a stop or hold on a transaction. The specific decline code is meant to give a brief explanation as to why the issuer rejected the purchase.
J
JCB J/Secure
JCB J/Secure is an authentication service deployed on the JCB card network. It uses real-time authentication software to verify card users before a transaction. This data is used to detect stolen cards, identify unauthorized users, and thwart fraud attempts before a transaction can be processed.
K
Keylogger
A keylogger, also known as a keystroke logger, is a program that silently records every key you press on your computer's keyboard. The information they collect can range from everyday messages to sensitive details like passwords, credit card information, and more.
L
Letter of Credit
A document issued by a bank guaranteeing the payment of a customer’s draft up to a stated amount for a specific period, provided that specified conditions are met.
Level I Data
Information captured during a traditional credit card purchase transaction, including total purchase amount, date, merchant category code and supplier/retailer name.
Level II Data
The same information captured at Level I, plus the following: sales tax amount, customer’s accounting code, merchant’s tax ID number, applicable minority- and women-owned business status, and sales outlet zip code.
Level III Data
The same information captured at Levels I and II, plus the following: quantities, product codes, product descriptions, ship to zip, freight amount, duty amount, order/ticket number, unit of measure, extended item amount, discount indicator, discount amount, net/gross indicator, tax rate applied, tax type applied, debit or credit indicator, and alternate tax
Line of Credit
The amount of credit a lender will extend to a borrower over a specified period of time. A credit card is essentially a line of credit.
Link Analysis
Link analysis is a forensic technique that examines the connections, relationships, and dependencies between individuals, accounts, addresses, devices, IP addresses, payment cards, transactions, and other entities or events for possible signs of fraudulent behavior.
Liveness Detection
Liveness detection is a pivotal security feature in different authentication processes, including biometric verification. Its primary function is to confirm that the individual being authenticated is physically present during the biometric data capture.
LOC
Also known as Letter of Credit.
Loyalty Fraud
Loyalty fraud (also known as “loyalty point fraud” or “reward point fraud”) happens when a criminal abuses or exploits a merchant reward program for personal gain. Fraudsters can attack individuals through identity theft, or hack merchants’ databases to gain private information.
M
Machine Learning
A type of artificial intelligence that uses algorithms to learn from usage and statistical data. This allows programs to perform specified tasks without explicit instructions.
Magnetic Stripe
Also called a “mag stripe.” A panel located on the back of a payment card containing magnetically encoded cardholder account information.
Magnetic Stripe Reader
A point-of-sale device that reads encoded information from a card’s magnetic stripe when the card is passed through the reader.
Man-in-the-Middle Attack
A Man-in-the-Middle (MitM) attack is a type of cyberattack by which a hacker or scammer secretly intercepts and possibly changes the messages being sent between two parties without them knowing.
Mastercard
A member-owned international bank card association which licenses members to issue cards or accept merchant drafts on the association’s behalf.
Mastercard Dispute Resolution (MDR)
Mastercard’s framework that governs dispute stages, time limits, and evidence requirements for Mastercard chargebacks.
Mastercard Dispute Resolution Initiative
The Mastercard Dispute Resolution initiative, or MDR, is an updated chargeback process that Mastercard implemented in 2018. The aim of MDR was to better manage the dispute lifecycle and simplify the overall chargeback process.
Mastercard Excessive Chargeback Merchant Program
The Excessive Chargeback Merchant program is a dispute compliance scheme created by Mastercard. The program's purpose is to exercise oversight regarding eCommerce merchants and prevent too many chargebacks from occurring on the Mastercard network. This is achieved by imposing penalties on merchants for noncompliance.
Mastercard Excessive Chargeback Program (ECP)
Mastercard monitoring program for merchants with excessive chargebacks that may lead to fees and remediation requirements.
Mastercard Excessive Fraud Merchant Program
The Mastercard Excessive Fraud Merchant program is a fraud compliance scheme created by the card network. The program's purpose is to exercise oversight regarding eCommerce merchant activity and prevent excessive fraud from occurring on the Mastercard network. This is achieved by imposing penalties on merchants for noncompliance.
Mastercard First-Party Trust Program
The First-Party Trust program is an initiative by Mastercard designed to streamline and enhance the dispute resolution process. The program facilitates better data sharing and merchant verification, with the aim of reducing fraudulent chargebacks and improving trust among merchants, cardholders, and issuers.
Mastercard High Fraud Merchant (HFM)
Mastercard program that flags merchants with high fraud rates and may apply monitoring and assessments.
Mastercard Installments
Mastercard Installments is a buy now, pay later option provided for the Mastercard payments network. The program offers consumers the option to pay for in-person purchases in monthly installments rather than in one lump sum.
Mastercard SecureCode
Mastercard SecureCode is the Mastercard-branded deployment of 3-D Secure technology. The tool asks cardholders to validate their identities during the checkout process by entering a one-time-use password supplied by the card network.
MATCH List
A shared database maintained by the card associations that lists all sellers/merchants which have been terminated by acquirers.
MCC
Special numbers assigned by the card associations to sellers based on their product vertical. This is done for identification and tracking purposes. VISA uses the equivalent Standard Industry Codes, or SIC.
mCommerce Fraud
mCommerce fraud means a subset of eCommerce fraud that is perpetrated using mobile devices.
Member
A financial institution that belongs to the Visa and/or Mastercard network. A member is licensed to issue cards to cardholders (issuer) and/or accept merchant drafts (acquirer).
Member Alert to Control High-Risk Merchants List
A shared database maintained by the card associations that lists all sellers/merchants which have been terminated by acquirers.
Merchant
Store owner or seller of products.
Merchant Account
A merchant account is a bank account that is used to temporarily hold funds from payment card transactions after processing, until the money can be transferred to the business’s permanent business bank account.
Merchant Account Reserve
A merchant account reserve is a predetermined amount of a business’s revenue held in reserve by an acquiring bank. This reserve protects the banks against unforeseen liabilities in the event of fraud or chargebacks.
Merchant Advice Codes
Merchant advice codes function as explicit communication channels from issuers to merchants. They clarify the reasons why a transaction was declined, and they offer guidance to merchants on actions that can be taken to ensure their customers remain satisfied and engaged.
Merchant Agreement
The written contract between the merchant and acquirer that details their respective rights, responsibilities and warranties.
Merchant Bank
A financial institution that is a member of Visa and/or Mastercard and maintains the merchant credit card processing relationship. The acquirer receives all transactions from the merchant to be distributed to the issuing banks.
Merchant Category Code
Special numbers assigned by the card associations to sellers based on their product vertical. This is done for identification and tracking purposes. VISA uses the equivalent Standard Industry Codes, or SIC.
Merchant Discount
The fee an acquiring member charges a merchant to cover the costs of providing deposit credit and handling credit card sales transactions.
Merchant File
A file used by the acquirer to list pertinent information on its merchants.
Merchant Fraud
Merchant fraud can refer to any situation where a bad actor pretends to be a merchant, with the intent of committing fraud against either consumers or a financial institution.
Merchant Identification Number
A unique identification number issued to merchants for use in all processing systems to locate information concerning the merchants and their accounts.
Merchant Identifier
“Merchant Identifier” is an API created by Mastercard. It helps prevent chargebacks by providing detailed merchant information to cardholders.
Merchant of Record
A merchant of record (MoR) is an entity that assumes legal responsibility for financial transactions between buyers and sellers. Professional MoR providers sell goods or services and accept liability on behalf of the seller.
Merchant Processing Agreement
A signed contract between a merchant and a credit card processor that outlines the responsibilities of the processor and the merchant in the credit card transaction process.
Merchant Qualification Standards
The minimum standards established by Mastercard and VISA for merchant acceptance that requires the merchant to be financially responsible and of good repute.
Method of Payment
The way a merchant chooses to accept payment for products or services. Examples include: Mastercard, Visa, American Express, Discover, Carte Blanche, Diners Club, JCB, Electronic Check and private label cards.
MID
A unique identification number issued to merchants for use in all processing systems to locate information concerning the merchants and their accounts.
MO/TO
Acronym meaning “Mail Order/ Telephone Order.” Used in card-not-present transactions to denote transactions conducted via phone or mail order.
Money Laundering
Money laundering is an illegal practice whereby individuals take funds acquired through criminal activity and attempt to disguise the origins of their funds. They achieve this by moving money through an intricate system of transfers, transactions, and shell businesses.
Multi-Factor Authentication
A user verification method where a user must supply multiple pieces/types of identity-confirming evidence (e.g., a password and a single-use code) before being able to access certain areas on a site.
N
Negative-Option Billing
Negative-option billing is the practice of giving customers a service that was not previously provided, then charging them for the service unless they specifically decline it.
Net Win Rate
The percentage of cases won by a merchant through representment, as compared to the total number of chargebacks received in a given period.
New Account Fraud
New account fraud occurs when a fraudster adopts a false identity to create a new payment card account. This can occur at either the banking or the merchant level, with fraudsters using stolen or synthetic identities to secure new credit or debit cards.
NFC Payment
NFC payments are a form of contactless payment made possible by near-field communication (“NFC”) technology. They involve using enabled devices, such as smartphones or contactless payment cards, to make secure, instant transactions at point-of-sale (POS) terminals that also support NFC.
No-Code Processing
No-code payment processing means platforms or tools that allow businesses to integrate payment solutions without the need for traditional coding or programming knowledge. These systems use intuitive drag-and-drop interfaces, templates, and pre-built integrations to simplify the process, enabling faster implementation and accessibility for users with minimal
No-Show
A charge to a cardholder account assessed by a lodging merchant if the person either fails to arrive or fails to cancel a reservation.
O
Off-Line Sale
A transaction conducted without a live internet connection. Allows the merchant to enter a transaction if unable to process under the regular sales key. Also called a “Force of Post Auth” or “Offline Transaction.”
Offline Debit Card
A debit card that does not deduct funds from the checking account immediately. Transactions are processed like a regular credit card and funds are not deducted for 24-72 hours. No Personal Identification Number (PIN) is needed to process the transaction.
Omnichannel Retail
Omnichannel retail is a cross-organizational sales and marketing approach that provides consumers with a fully-immersive shopping experience. Omnichannel retail optimizes and integrates multiple sales channels through high-level analysis and cooperation to meet and exceed consumer demand.
One-Click Checkout
One-click checkout is a practice that may be implemented as part of the eCommerce checkout process. It lets users set default payment credentials and shipping information to make future purchases with the click of a single button.
Online Merchant
Any merchant doing business over the internet. eCommerce may be their primary sales channel, or one of many.
Online Seller Account
The bank account a seller identifies as the sole account from which monthly and/or transaction fees are debited.
Online Transaction
A transaction that is authorized electronically from the front-end network.
Open Data
Open data is any non-proprietary data available to be freely used and redistributed. The conditions under which this data is provided are what allow for redistribution and intermixing with other information.
Order Fulfillment
Order fulfillment describes the process of receiving and delivering goods to your customers. This can include inventory management, order processing, shipping, and return intake, among other facets of your operation.
Order Insight
A dispute resolution tool created by Verifi which enables real-time data sharing between participating merchants and cardholders, potentially resolving Visa transaction inquiries that would otherwise become chargebacks.
Original Credit Transactions
An Original Credit Transaction (OCT) is a specific type of payment method used in the financial industry. A payment service provider, such as a bank or a financial institution, directly credits a payment to the recipient's card or account. This is usually used for services like direct deposit of payroll, government benefits, or tax refunds.
P
Package Redirection Scam
A package redirection scam is a form of eCommerce fraud involving a scammer who alters or manipulates shipping information to trick a cardholder, merchant, or mail carrier into delivering goods to the scammer.
Partial Chargeback
A partial chargeback means a chargeback that returns only a portion of a disputed transaction. This is generally because the cardholder is dissatisfied with only part of an order, and wants a refund just for that amount.
Partial Refund
A refund for part of the purchase amount, often used as a resolution to reduce dispute risk.
Pay by Bank
Pay by bank is a method of online payment that lets customers purchase goods and services by transferring funds directly from their bank account to the seller’s account.
Payment Authentication
Payment authentication is the process of verifying the identity of the party on the other end of a transaction. This is often done by merchants, who need to verify that their customers are authorized to use a specific payment card.
Payment Capture
A payment capture is the legally binding point at which transactional funds move from a cardholder's account into a merchant’s account. Payment capture comes after authorization; at this point, the payment is effectively "settled," and the transaction is over.
Payment Card Industry Data Security Standard
The Payment Card Industry Data Security Standard (or PCI-DSS) is a set of 12 information security standards. To be compliant, businesses must adhere to these standards when accepting, transmitting, processing, and storing customer credit card data to prevent loss or fraud.
Payment Fraud
Payment fraud means any criminal fraud tactic by which the perpetrator conducts a financial transaction without a valid authorization to do so. The fraudster usually impersonates a legitimate user, then completes as many purchases as possible (often in quick succession) to acquire goods for resale.
Payment Gateway
Software used to manage the electronic connection between consumers and their financial institutions, transmitting data for verification.
Payment Reversal
“Payment reversal” is a blanket term for any situation where transaction funds are returned to the cardholder's bank account. Payment reversals are also known as “credit reversals” or a “reversal payment.” Authorization reversals, refunds, and chargebacks are all forms of payment reversals.
Payment Service Provider
Payment service providers, or PSPs, are companies which enable eCommerce merchants to accept credit cards and other payment. A PSP acts as an intermediary between the merchants and banks, securing transaction processing, enhancing fraud prevention, and providing analytics and reporting.
PayPal Chargeback Protection
PayPal Chargeback Protection is a program designed to shield merchants from the financial repercussions of chargebacks. Essentially, it’s meant to provide a form of insurance against chargebacks initiated by customers through their credit card issuer for transactions conducted via PayPal.
PayPal Purchase Protection
PayPal Purchase Protection is a program offered by PayPal that is designed to defend users against fraud. If a user is the victim of abuse, and the transaction in question qualifies for Purchase Protection, that buyer may be covered for the full purchase price, plus the cost of fees like shipping charges.
PayPal Resolution Center
The PayPal Resolution Center is a resource accessible through a portal located on the company’s website. Customers can use the PayPal Resolution Center to report a problem with a product or service, unauthorized transactions, billing issues, and more.
PayPal Seller Protection
PayPal Seller Protection is a free program that, in qualifying cases, allows merchants to keep funds that would otherwise be lost to disputed transactions. Seller Protection only applies to select qualifying transactions.
PCI-DSS
Also known as Payment Card Industry Data Security Standard.
Per-Transaction Fee
A fee that can be charged by card networks to merchants for each transaction that is processed.
Personal Identification Number
A unique numeric code used as verification to complete a transaction via a payment card.
Phishing
Phishing is the act of impersonating a trustworthy party, or sending messages purported to be from a trustworthy party, to trick individuals into revealing personal information.
PIN
A unique numeric code used as verification to complete a transaction via a payment card.
Point of Purchase Conversion
A one-time ACH debit from a consumer’s bank account for in-person purchases made at the point-of-sale.
Point of Sale
The location at which a payment card transaction occurs, usually by way of a device such as a credit card terminal or cash register.
POS
The location at which a payment card transaction occurs, usually by way of a device such as a credit card terminal or cash register.
POS Terminal
A terminal at the point of sale, connected via telecommunication lines to a central computer. Authorization, recording and transmission of electronic transactions are performed through the terminal.
Pre-Arbitration
A stage where the issuer and acquirer/merchant attempt to resolve a dispute before arbitration is filed.
Prearranged Payment and Deposit
A credit or debit entry, initiated pursuant to a standing or one time authorization from a consumer. Used to perform electronic funds transfers to or from a consumer’s bank account. Direct Deposit of a paycheck is an example of a PPD.
Prenote
A non-dollar transaction sent through the ACH network for the purpose of verifying a cardholder’s account data.
Presentation Attack
A presentation attack occurs when a fraudster uses stolen photos, videos, identity documents, 3D masks, synthetic fingerprints, or deepfakes in an attempt to bypass a biometric security system and gain unauthorized access to a victim’s account.
Presentment
Payment presentment is the act of formally presenting a request for payment to a bank. After presentment, the funds can then be withdrawn from the account held by the drawee — usually a credit or debit cardholder — and transferred to the merchant.
Presentment Currency
The currency where a purchase is authorized through a card network.
Private Label Card
A card issued by a merchant that can only be used in the issuing merchant’s business. An example would be a department store credit card.
Processing
A procedure used by merchants to send credit card transaction data to the issuing bank, enabling the merchant to be paid for the transaction in question.
Processing Fees
The fees associated with the processing of credit card transactions.
Processor
A company responsible for processing interchange transactions. Processors are often operated by an acquirer, and are acting on the acquirer’s behalf.
Promo Abuse
Promo abuse can refer to any situation where customers take advantage of a business’s promotional offer, in a way which was not intended by the merchant, for the purpose of monetary gain.
Proof of Delivery (POD)
Shipping evidence showing delivery occurred, such as carrier scans, signature, or geolocation data.
Provisional Credit
A provisional credit is a temporary credit issued by a bank to an account holder. This statement item can later be reversed or made permanent, depending on the reason for the credit issuance.
Proxy Piercing
Proxy piercing is a technology that enables hosts to determine whether a customer is attempting to mask their IP address by using a proxy server.
PSD2
The Revised Payment Services Directive (PSD2) is a ruleset administered by the European Commission. Its purpose is to regulate payment services and payment service providers throughout the European Union and European Economic Area, allowing new entities to operate as financial institutions with proper oversight.
PSP
Also known as payment service provider.
Purchasing Card
A payment card issued to corporations and allowing the corporation numerous parameters to control daily and monthly spending limits, total credit limits, and where the card may be used.
Push Payment Fraud
Authorized push payment fraud, or APP fraud, happens when a cybercriminal tricks a consumer into authorizing a payment under false pretenses. During the APP scam, the fraudster will pretend to be someone the individual trusts, like a bank or utility provider, then attempt to convince the individual to authorize the payment without much consideration.
Q
QR Code Payments
A QR code payment is a contactless alternative payment method made by one user scanning a QR code from a mobile app.
Qualified Rate
The discount rate level, at which the transaction qualifies when it meets all requirements for the best (lowest) rate.
R
Rapid Dispute Resolution
A dispute resolution tool created by Visa which enables merchants to define rules for automatically refunding qualifying disputes in real-time data, resolving Visa transaction inquiries that would otherwise become chargebacks.
Reason Code
A numerical code which identifies the specific reason for a chargeback. Mastercard and Visa each have their own chargeback codes.
Rebuttal Letter
A chargeback rebuttal letter is a well-written synopsis of a chargeback case that explains why the claim is invalid. This situation-specific letter is an integral component of a dispute response package, which also includes compelling evidence to support your case.
Receipt
The paper or electronic evidence of a purchase; a receipt.
Recurring Transaction
A transaction charged to a cardholder’s account (with prior permission) on a periodic, ongoing basis for recurring goods and services, i.e., club memberships, subscriptions, or streaming services.
Referral
The message received from an issuing bank when an attempt for authorization requires a call to a Voice Authorization Center.
Refund
A refund occurs when the merchant rebates all, or a portion, of an original transaction amount to the cardholder. Refunds are made to the same card that was used for the original transaction. Similar to a Credit.
Refund Fraud
Refund fraud, sometimes referred to as refund theft or a “whitehouse scam,” involves abusing a merchant’s policies to pursue a refund from a retailer and receive money or other goods without a valid reason to do so.
Refund Policy Disclosure
Proof that refund/cancellation terms were clearly disclosed before purchase.
Refund Rate
Percentage of transactions refunded, often correlated with dispute risk and customer satisfaction.
Refund Services
A refund service is a type of organized scam that targets merchants on behalf of consumers. In other words, it’s both a form of return fraud and also an example of “fraud as a service” (or “FaaS”) that is promoted to consumers through a variety of online channels.
Representment
An attempt by the merchant or acquirer to reverse a chargeback by offering additional supporting documentation. The acquirer literally “re-presents” the transaction to the issuer on behalf of the merchant.
Representment Cycle Time
Time taken to submit a representment after a chargeback is received, impacting eligibility and outcomes.
Reshipping Scams
A reshipping scam is a bogus job for which a third-party victim is “hired” by a fraudster. The unsuspecting victim is promised payment for receiving illegally obtained packages at one address, then shipping them to a different address.
Restore Online Shoppers’ Confidence Act
The Restore Online Shoppers’ Confidence Act is a US federal law that prohibits any post-transaction third-party seller from charging any financial account in an internet transaction unless it has disclosed clearly all material terms of the transaction and obtained the consumer's express informed consent to the charge. In other words, the seller must obtain t
Retrieval Request
A request by the issuer to the acquirer for a copy of the original sales ticket.
Return Policy
The merchant's limitations and/or requirements for accepting returned merchandise.
Return Rate
An return rate means the measure of transactions that buyers return as a share of overall purchases.
Reversal
The undoing of a chargeback. When an acquirer successfully represents a chargeback to the issuer, the chargeback is reversed and the funds are returned to the merchant.
Reverse Email Lookup
Reverse email lookup means the process of obtaining information about a party by searching the sender’s email address.
Review Fraud
Review fraud is any phony or deceptive online review deliberately posted as a way of manipulating the perception of a person, product, or business.
S
SaaS
A software distribution model by which the provider hosts applications and makes them available to users via the internet, usually on a subscription basis.
Sales Draft
The paper or electronic evidence of a purchase; a receipt.
Sales Transaction Fee
The amount the financial institution charges a merchant for each sales transaction.
Samsung Pay
A contactless payment service created by Samsung Electronics that allows users to make payments in person, in iOS apps, and on the web.
Second Presentment
Second presentment (also known as “representment”) is the process of re-submitting a transaction, along with additional documentation, to the bank after a chargeback.
Section 75
Section 75 is part of the Consumer Credit Act. It gives credit cardholders in the UK the right to file a dispute regarding a transaction between £100-30,000.
Secure Payment Page
Web pages on which payment information is encrypted for privacy and data integrity before it's sent over the internet.
Seller Account
The bank account a seller identifies as the sole account from which monthly and/or transaction fees are debited.
Seller Bank
A financial institution that is a member of Visa and/or Mastercard and maintains the merchant credit card processing relationship. The acquirer receives all transactions from the merchant to be distributed to the issuing banks.
Settlement
The process of transferring sales/credit amounts between acquirers and issuers, including debiting a cardholder's account and crediting a seller's account.
Shopping Cart
A program used by online merchants that allows customers to accumulate a list of items for eventual purchase. Customers can easily add or remove items, view total costs, and checkout securely.
Shopping Cart Abandonment
Dropping out of the process before completing the purchase. Potential customers collect items for an online order but never finalize the transaction.
Shortened Descriptor
Aa shortened descriptor is a static prefix that will always appear at the beginning of your billing descriptor. The remaining characters can be dynamic, but this will always appear first.
SIC
Special numbers assigned by the card associations to sellers based on their product vertical. This is done for identification and tracking purposes. VISA uses the equivalent Standard Industry Codes, or SIC.
Smart Card
A payment card with a built-in microprocessor (chip) that stores cardholder data information.
Smishing
Smishing is the fraudulent practice of using fake text messages in an attempt to steal confidential information, such as passwords or credit card numbers.
SMS Verification
SMS verification is a fraud prevention practice that allows merchants to send SMS (short message service) messages to a buyer’s device during the checkout process. The buyer will usually be asked to enter a 4- to 8-digit code sent via text as a way to verify the purchase.
Smurfing
Smurfing means a money laundering tactic by which individuals break up large sums of money into smaller, less noticeable amounts. These smaller amounts are then laundered separately, with the intention of avoiding detection.
Soft Decline
A denied authorization attempt. This does not necessarily mean the card is bad, just that it is not authorized for the current purchase. Unlike a hard decline, the merchant may reattempt a transaction following a soft decline, once the conditions that caused the decline are resolved.
Software as a Service
A software distribution model by which the provider hosts applications and makes them available to users via the internet, usually on a subscription basis.
Spear Phishing
Spear phishing is a targeted version of phishing. Attackers focus on specific individuals or organizations, usually through misleading emails. The goal is to obtain confidential information, such as login credentials, or plant malware on the victim's device.
Standard Industry Code
Special numbers assigned by the card associations to sellers based on their product vertical. This is done for identification and tracking purposes. VISA uses the equivalent Standard Industry Codes, or SIC.
Stored-Value Cards
Stored-value cards are payment cards that have monetary value tied directly to the card, rather than being linked to an external account with a financial institution. This includes subway metro cards, for instance, as well as many retailer-issued gift cards.
Straw Purchaser
A straw purchaser is an agent who agrees to acquire a good or service for someone who is usually unable or unwilling to purchase the good or service for themselves.
Submission
Files transmitted by a merchant containing one or more transactions.
Subscription Billing
A transaction charged to a cardholder’s account (with prior permission) on a periodic, ongoing basis for recurring goods and services, i.e., club memberships, subscriptions, or streaming services.
Subscription Cancellation Proof
Evidence that a customer cancelled (or did not cancel) a subscription, including timestamps and UI flow logs.
Summary Adjustment
A correction made by the acquirer when there is an error in a submitted deposit.
Swipe
Running a credit card’s magnetic stripe through a reader that interprets the data encoded on it.
Synthetic Identity Theft
Synthetic identity theft, also known as synthetic identity fraud, occurs when cybercriminals use compiled stolen data to create new identities (instead of stealing and using existing accounts). They can use these synthetic identities to carry out fraud attacks.
T
TC40 Data
A TC40 data claim occurs when a customer makes a fraud claim against a merchant. The issuer generates a claim, then transmits it to the merchant’s acquirer, as well as to Visa, as a means of noting all reported fraud incidents tied to the merchant.
TCS/Terminal Capture System
A process by which transactions are stored in the terminal until they are batched. Commonly used in restaurants for making tip adjustments.
Terminal Identification Number (TID)
A unique number assigned to each POS terminal, used for identifying which merchant has initiated a transaction and where an authorization is to be sent.
Terminal Provider
A company that supplies credit card hardware and software to a merchant.
Terminated Merchant File
The Terminated Merchant File is a database of merchants who have had a MID canceled for breaching standards set by the card schemes. Acquirers consider merchants on the TMF to be risky ventures, and will normally decline to work with those merchants.
Terms & Conditions Acceptance
Evidence that the customer accepted terms at checkout or account creation, supporting dispute defense.
The Credit CARD Act of 2009
The Credit Card Accountability Responsibility and Disclosure Act of 2009, more commonly known as The Credit CARD Act, was a consumer protection mechanism implemented in the wake of the 2008 financial crisis. The purpose of the CARD Act is to protect consumers against unreasonable interest rates and ensure cardholders are billed fairly.
The Fair Credit Billing Act
The Fair Credit Billing Act of 1974, or FCBA, is a federal law designed to protect consumers from unfair credit billing practices and build consumer confidence in then-new forms of credit in the process. The act serves as the legal basis for the chargeback process.
Third-Party Fraud
Third-party fraud means any crime committed by using false identification to pose as another person or organization, without that party’s knowledge or authorization.
Third-Party Processor
A processing provider that enables businesses to accept card payments without opening their own merchant account.
Tokenization
Tokenization means the process of protecting sensitive data by replacing it with a randomized placeholder number called a token.
Tor Browser
Tor Browser (or “The Onion Routing Browser”) is a web browser designed to protect your privacy. It is a modified version of Mozilla Firefox that connects to the internet through the Tor network, and uses the onion routing concept to ensure anonymity.
Transaction
Any actions such as purchases or credits made between a cardholder and a merchant that results in activity on the account.
Transaction Date
The actual date on which a transaction occurs.
Transaction Disputes
A transaction dispute occurs when a credit cardholder registers a formal complaint against a merchant regarding a specific transaction. Most transaction disputes are the result of claims of fraud or unauthorized purchases, although one may be filed if the item never arrived, services weren’t performed, or the item arrived damaged, etc.
Transaction Factoring
Transaction factoring is a form of financing where a business sells its accounts receivables (transactions) at a discount to a third party, or “factor.”
Transaction Fee
The amount a merchant pays per transaction for processing.
Transaction Fraud
Transaction fraud can be any type of purchase which was not authorized by a legitimate user. With credit cards, for instance, transaction fraud usually involves unauthorized use of a victim’s credit card to make purchases.
Transaction ID
A transaction ID is a sequence of numbers generated during the electronic transfer of funds from a consumer to a merchant. The number is used to identify a transaction for recordkeeping purposes.
Transaction Laundering
Transaction laundering is a process by which fraudsters disguise themselves as legitimate eCommerce merchants and begin working with an acquirer to process payments. Unbeknownst to the acquirer, the fraudster is actually using their account to launder revenue from criminal activity.
Transaction Risk Analysis
Transaction risk analysis, or TRA, is the process of analyzing issuer, acquirer, and merchant risk scores (and other factors) concerning location, time, spending habits, and other behavioral patterns. If a transaction relays any information outside of the historical norm for these factors, an alert system will be triggered, and further authentication will be
Triangulation Fraud
Triangulation fraud occurs when a customer makes a genuine purchase on a third-party marketplace, like eBay or Amazon, but the seller fraudulently purchases the product from another merchant. The name comes from the tri-lateral relationship between three involved parties: the unsuspecting customer, the legitimate merchant, and the fraudster middleman.
Truth in Lending Act (TILA)
The Truth in Lending Act, or TILA, serves as a safeguard for consumers in their interactions with lenders and creditors. It is a federal law that has been put into action by the Federal Reserve Board via a sequence of rules and regulations.
Two-Factor Authentication
A user verification method where a user must supply multiple pieces/types of identity-confirming evidence (e.g., a password and a single-use code) before being able to access certain areas on a site.
U
V
Valid Date
The date embossed on a payment card stating when the card may first be used.
Value-Added Reseller
A third-party provider that adds features to an existing product or service, then resells the combined product to end users.
VAMP (Visa Acquirer Monitoring Program)
Visa program that monitors merchants/acquirers with elevated dispute and fraud risk and may require remediation to avoid penalties.
VAR
A third-party provider that adds features to an existing product or service, then resells the combined product to end users.
VAR Sheet
VAR sheets, or "Value-Added Reseller" sheets, contain essential information about a business that facilitates communication between a business's payment gateway and its merchant account. This includes account information, gateway configuration, and more.
VBASS
The Visa BIN Attribute Sharing Service, or VBASS, is an optional service that provides merchants and other entities with enhanced Visa BIN data. Use of VBASS helps merchants improve authorization rates, reduce fraud, and improve their overall checkout experience.
Velocity Checks
Velocity checks (sometimes referred to as “velocity limits”) are a fraud prevention mechanism widely used by eCommerce merchants. The tool is designed to flag potential fraud based on the rate at which a buyer submits multiple transactions.
Verifi CDRN
The Consumer Dispute Resolution Network (CDRN) is a chargeback prevention solution from Verifi, a Visa company. Like other alert products, Verifi CDRN alerts serve to warn merchants whenever a cardholder disputes a transaction.
Verifi CDRN (Cardholder Dispute Resolution Network)
Network that connects merchants and issuers to resolve disputes quickly and reduce chargebacks.
Verification
Verification, as it pertains to payments, describes the process of confirming the identity of the sender or recipient of a financial transaction.
Verified by Visa
Verified by Visa (VbV) is an advanced security feature from Visa that helps authenticate purchasers as authorized cardholders. This extra layer of verification helps protect both cardholders and merchants during checkout.
Virtual Account Number
A virtual account number is a temporary token used in place of a permanent account number. A user may provide a virtual account number to conduct a purchase, thereby keeping their actual account information secure.
Virtual Credit Card
A virtual credit card is a digital version of a physical credit card. Instead of using the actual card number, a randomly generated, temporary card number is issued for specific purchases or a set period. This virtual card number is linked to the cardholder’s real account. But, it hides the original card details, providing an added layer of security for onli
Virtual Currency
Virtual currency, also known as virtual money, is an electronic representation of value that functions as a medium of exchange.
Visa
A member-owned bank card network which licenses members (issuers) to issue credit cards through the Visa Program.
Visa Account Updater
Visa Account Updater, or VAU, is a service that exchanges updated account information between participating merchants and Visa card issuers. Merchants using stored information for recurring payments can use VAU to boost retention and prevent chargebacks.
Visa Claims Resolution (VCR)
Visa’s dispute management framework that standardizes dispute flows, evidence rules, and timelines for Visa chargebacks.
Visa Digital Goods Merchant Fraud Monitoring Program
The Visa Digital Goods Merchant Fraud Monitoring Program is an update to (and extension of) the Visa Fraud Monitoring Program. As the name implies, this subset of the VFMP is aimed at digital goods merchants.
Visa Dispute Document Analyzer
Visa Dispute Document Analyzer is an AI-powered VROL feature for use with Compelling Evidence 3.0. In certain fraud disputes, the tool can automatically extract data from your documents and populate fields in the CE3.0 questionnaire.
Visa Dispute Monitoring Program
The Visa Dispute Monitoring Program, or VDMP, is a compliance program administered by Visa for the purpose of controlling merchant chargeback issuances. If a merchant exceeds the monthly chargeback threshold set by Visa, they will be entered into the program. This will result in punitive fees, operating restrictions, and costly periodic reviews.
Visa Dispute Monitoring Program (VDMP)
Visa monitoring program for merchants with high dispute/chargeback levels that can trigger assessments and remediation requirements.
Visa Fraud Monitoring Program
As the name implies, the Visa Fraud Monitoring Program, or VFMP, is a merchant monitoring initiative administered by Visa. The program aims to help merchants manage their criminal fraud risk and, in turn, protect the larger payments environment.
Visa Fraud Monitoring Program (VFMP)
Visa monitoring program for merchants with high fraud levels that can trigger assessments and required risk controls.
Visa Installments
Visa Installments is a payment platform created by Visa to provide consumers with additional payment options at checkout. Using Visa Installments, cardholders can select and agree to an installment plan at checkout using an existing Visa account.
Visa Issuer Monitoring Program
Under this program, Visa closely monitors card-not-present (CNP) sales, dispute, and fraud activity to identify issuers with excessive fraudulent activity. The card network mandates that those issuers must take steps to reduce the number of disputes and/or fraud incidents involving their cardholders.
Visa Rapid Dispute Resolution (RDR)
Verifi-powered program that lets merchants auto-resolve disputes early (often via refund) to prevent chargebacks.
Visa Resolve Online
Visa Resolve Online, or VROL, is a web-based platform designed by Visa to make handling disputes for Visa card transactions easier and more efficient. It functions as a centralized hub where issuers, acquirers, and processors can manage card disputes in real-time.
Visa Secure
Visa Secure is a security protocol and technology deployed by Visa to enhance the security of online transactions. It is the Visa-branded version of 3-D Secure 2.0 technology.
Visa+
Visa+ (sometimes stylized as “Visa Plus”) is a digital money transfer service designed to act as a bridge between different existing P2P payment platforms. It allows users of one payment app to send money seamlessly to users on a different platform.
Vishing
Vishing, often called voice phishing, is a form of cybercrime that leverages telephone calls to illicitly obtain sensitive personal information. Scammers employ social engineering strategies to persuade victims into disclosing confidential details, such as bank account access, over the phone.
Visual Search
Visual search is an AI-enabled technology that allows customers to search for products and items by visual cues rather than textual information. For example, if a customer is searching for “blue t-shirt,” the algorithm will present them with visual products that match this description. The user can then refine the search according to the customer’s taps or i
Void Transaction
A void transaction (or transaction void) is a transaction that is canceled by a merchant before it reaches settlement with the merchant’s payment provider. Once a transaction has been “settled,” a transaction is effectively complete and can no longer be nullified.
VPOS
A virtual payment terminal (also called a virtual point of sale or “VPOS”) is a web-based application used by merchants to accept credit cards without the presence of the physical card.
W
Wardrobing
Wardrobing is a type of return fraud committed by legitimate shoppers who buy wearable or usable items with the intention of returning them after use. For example, an expensive outfit that is worn once then returned, or a book that is returned after reading.
Win Rate
The percentage of representment cases won as compared to the number of challenged claims (as opposed to the total number of chargebacks received).
Wire Transfer Fraud
Wire transfer fraud, or simply wire fraud, is a form of payment fraud where a fraudster deceives a victim into transferring money via wire transfer to a scammer’s bank account.
Z
Zero Floor Limit
A term for merchants meaning that all transactions of any amount must receive authorization.
Social Commerce
Social commerce is a type of eCommerce where merchants advertise, market and sell products and services directly through social media platforms like Facebook, TikTok, and Instagram.