Payments Glossary

Acquirer

The acquirer is the regulated bank behind your merchant account. Here is what it does, what risk it carries and why its rules bind you.

Billing descriptor

The billing descriptor is the line on your customer's card statement. Vague descriptors are one of the cheapest chargeback problems to fix.

Cross border acquiring

Cross border acquiring is processing through an acquirer outside your customer's market. When it works, what it costs and where the limits are.

High risk merchant account

What a high risk merchant account is, why acquirers classify businesses as high risk, and what it means for fees, reserves and monitoring.

Holdback

Holdback is the umbrella term for any merchant funds an acquirer withholds, from rolling reserves to fixed and capped reserves.

Interchange

Interchange is the fee that flows from your acquirer to the cardholder's bank on every card sale, and the base layer of your processing cost.

Merchant category code (MCC)

The four digit MCC your acquirer assigns decides your fees, your monitoring programs and your registration costs. Miscoding is not a shortcut.

Merchant of record

The merchant of record is the entity legally selling to the cardholder, carrying the liability, taxes and card network relationship.

MID

The MID is the merchant identification number behind your processing account. Why merchants have several and why load balancing has limits.

Payment facilitator (PayFac)

PayFacs like Stripe onboard you in minutes as a sub merchant. That speed is exactly why they can shut you down just as fast.

Payment service provider (PSP)

What a PSP is, how it differs from an acquirer, and why the difference decides who can actually fix your processing problem.

Rolling reserve

A rolling reserve holds back a slice of every settlement for months. What it is, why acquirers demand it and how merchants get it reduced.

Settlement

Settlement is when card sales actually become money in your account. Timing, delays and holds explained for high risk merchants.

BRAM

BRAM is Mastercard's program against illegal and brand damaging transactions. Adult and CBD merchants live under its content rules.

EFM

EFM is Mastercard's Excessive Fraud Merchant program, the fraud twin of ECP. What puts a merchant in it and what it costs.

Excessive chargeback program (ECP)

Mastercard's ECP puts merchants with high dispute ratios into remediation tiers with escalating fines. Here is how the tiers work.

MATCH list

The MATCH list is Mastercard's database of terminated merchants. What gets you listed, what it blocks and how removal actually works.

SMMP

SMMP is Mastercard's Scam Merchant Monitoring Program, live July 24, 2026: one combined threshold, a 72 hour investigation, immediate shutdown.

VAMP

VAMP is Visa's consolidated acquirer monitoring program covering fraud and disputes. Here is how it works and who feels it first.

Arbitration

Arbitration is the card network's final ruling on a dispute after representment fails. Slow, fee bearing and rarely worth it.

Chargeback

A chargeback is a forced reversal of a card payment through the issuing bank. Here is how the process works and what it costs merchants.

Chargeback alerts

Chargeback alerts let merchants refund a dispute before it is filed, keeping it off the ratio. How Ethoca, Verifi and RDR work.

Chargeback ratio

The chargeback ratio is the number card networks judge you by. How Visa and Mastercard calculate it differently, and where the thresholds sit.

Chargeback reason codes

Every chargeback carries a reason code that decides what evidence can win. How Visa and Mastercard code disputes and why the code matters.

Friendly fraud

Friendly fraud is a cardholder disputing a charge they actually made. It is the dominant dispute type for subscriptions and digital goods.

Representment

Representment is how a merchant fights a chargeback with evidence. When to fight, what evidence wins and why win rate is the wrong metric.

Retrieval request

A retrieval request asks the merchant for transaction details before a dispute is filed. Ignoring one is an avoidable way to lose.

3D Secure (3DS)

3D Secure authenticates the cardholder during checkout and shifts fraud liability to the issuer. When to use it and when it hurts.

Alternative payment method (APM)

APMs are every payment method outside the global card networks, from wallets to bank transfers to crypto. Why they matter for high risk.

Local payment method (LPM)

LPMs are the payment methods a single market actually prefers, like iDEAL in the Netherlands. Skipping them caps your conversion abroad.

Negative option billing

Negative option billing keeps charging until the customer cancels. Regulators and card networks are squeezing it from both sides.

Open banking

Open banking lets customers pay straight from their bank account through regulated APIs, with no card networks and no chargebacks.

Stablecoin settlement

Stablecoin settlement moves merchant funds in tokenized dollars instead of bank rails. Why high risk merchants are watching it.

Age verification

Age verification laws now decide whether adult merchants keep their payment accounts. What the laws require and how payments enforce them.

AML

Anti money laundering rules shape what acquirers may process and monitor. What AML means in practice for high risk merchants.

KYB

KYB is the business level counterpart of KYC: verifying the company, its owners and its licences before an acquirer will board it.

KYC

KYC is the identity verification acquirers must perform before boarding a merchant. Here is what they check and why it keeps expanding.

PCI DSS

PCI DSS is the card industry's security standard for handling card data. What compliance levels mean and what a breach actually costs.

Strong Customer Authentication (SCA)

SCA is the European rule requiring two factor authentication on most electronic payments. What it covers and where the exemptions are.

Transaction laundering

Transaction laundering is processing another business's sales through your merchant account. Networks treat it as fraud, and detection is good.