An IBO (International Business Owner) is a US-resident individual who is legally appointed as the director of a US business entity on behalf of an operator based outside the United States. The IBO carries the legal and KYC responsibility of running the company on paper, while the operator drives the actual business. In a merchant account context, the IBO is the name on the entity, the name on the bank account and the name the processor underwrites.

What is the difference between an IBO, a US Signer and a Nominee Director?

In practice, these three terms describe roughly the same role. A "Nominee Director" is the formal corporate-law term for someone who holds a director title on behalf of another party. A "US Signer" emphasises the fact that the person signs US bank and processor paperwork. "IBO" is the industry term used inside the high-risk merchant account ecosystem. The legal function is essentially identical: a real US individual lends their name, ID and signature to a company they do not operationally control.

Anyone who wants to process high-risk volume through a US merchant account but is not a US resident. This includes international dropshippers, info-product sellers, subscription operators, SaaS founders, crypto-adjacent merchants, nutra operators, continuity sellers and any entrepreneur whose vertical is denied by banks in their home country. If you cannot open a US MID under your own name, you need an IBO.

Why do high-risk merchants use IBOs instead of opening MIDs directly?

High-risk acquirers require a local director, a clean US credit profile, proof of US residency and a US-incorporated entity. Non-US operators almost never satisfy all four conditions at once. On top of that, many operators need multiple MIDs in parallel to absorb processing caps. Instead of trying to open every MID personally, they use one IBO per entity and scale horizontally.

Can I use my own US contact instead of renting an IBO?

Technically yes, but in practice it almost always fails. A casual friend or family member in the US will not pass background checks, will not have an adequate credit score, will not want their name on a high-risk MID and will disappear the first time an acquirer asks for a verification call. Professional IBOs are pre-vetted, trained, responsive and contractually committed.

Does using an IBO affect my ability to scale?

No, it is the opposite. Using IBOs is exactly how serious operators scale past single-MID processing caps. Each IBO gives you a fresh US entity and a fresh director identity, which means a fresh underwriting file that acquirers can approve without tripping duplicate-operator flags. The more IBOs you operate, the more parallel processing capacity you carry.

What documents does an IBO provide?

A serious IBO provides a government-issued photo ID, a proof of current US address, a social security number for KYB and tax forms, signed articles of incorporation, a signed operating agreement, an EIN confirmation letter, bank onboarding paperwork, a personal utility bill, a clean credit report and any additional document the acquirer requests during onboarding.

How are IBOs sourced and vetted?

Reputable providers recruit IBOs through long-standing personal networks, not mass advertising. Every candidate passes a criminal background check, a credit score review (typically 650+), a banking history review and a behavioural interview on availability, responsiveness and willingness to cooperate with acquirer due diligence over months or years.

What is the timeline from ordering a package to live processing?

Package delivery is same day. Acquirer onboarding typically takes 3 to 10 business days depending on the processor and the vertical. End-to-end, serious operators move from order to live processing in around two weeks. Monthly billing starts 30 days after package delivery regardless.

Is working with an IBO legal in the United States?

Yes, when structured correctly. US corporate law explicitly allows non-resident individuals to own US companies and to appoint local directors. What is not legal is using stolen identities, forged documents or sham entities designed to defraud acquirers. IBOCore only deploys real, consenting, fully-KYC'd directors, which keeps every package on the compliant side of that line.

Who is the high-risk payments glossary for?

Operators researching MIDs, chargeback programs, fraud typologies and acquirer terminology before boarding a processor. It covers network monitoring (VDMP, VFMP, MATCH), reserves, AML/KYC and high-risk vertical vocabulary in plain English.

How does the glossary relate to renting an IBO?

Understanding terms like MID, DBA, statement descriptor, rolling reserve and MATCH helps you ask better questions during underwriting. The entity behind every MID is still a US company with a real signer; the glossary explains the processor side, IBOCore supplies the structure side.

Can I search by acronym (MID, CB, KYB)?

Yes. The search field matches term names, aliases and full definitions. Try "chargeback ratio", "RDR", "nominee" or "transaction laundering" to jump straight to the concept you need.

Resources

High-risk payments glossary. 585+ terms, plain definitions.

Every acronym, network program and fraud typology you will hear in MID underwriting, chargeback calls and Telegram operator chats. Searchable, categorized, no fluff.

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585 definitions across 19 categories

Transaction Lifecycle & Processing

17 terms

API: The programmatic interface used to integrate payment services into an application.
Approval Rate AR: The percentage of attempted transactions that are approved rather than declined; a core revenue and account-health metric.
Batch Batches: A grouped set of captured transactions submitted together for settlement; funds arrive in the bank account as a batch rather than per transaction.
Batch Processing: Submitting transactions in scheduled groups (often end of day) rather than in real time.
Decline: An issuer or processor refusal of a transaction; can be soft (retryable) or hard (do not retry).
Decline Code Decline Reason Code: A standardized code returned with a decline explaining the reason (insufficient funds, card flagged, AVS mismatch, CVV failure, velocity limit, bank restriction).
Dunning: The collection process for failed recurring payments via notifications and scheduled retries.
Hard Decline: A permanent refusal (lost/stolen, closed account, do not honor) that should not be retried.
Idempotency Key: An identifier ensuring a repeated request does not create a duplicate charge.
Reconciliation: Matching transactions, settlements and fees to confirm the books agree with processor reports.
Retry Logic: Rules governing when and how failed payments are reattempted, especially for subscriptions.
Retry Salvage Salvage: The process of reattempting declined payments in a specific sequence, timing and routing to recover otherwise-lost approvals.
Sandbox: A test environment that simulates processing without moving real funds.
SDK: A software development kit that simplifies embedding payments into a mobile or web app.
Soft Decline: A temporary, potentially recoverable refusal (e.g. issuer wants 3DS, try again later) that may succeed on retry.
Transaction: A single attempt to move funds from a cardholder to a merchant, passing through gateway, processor, network and issuer.
Webhook: An automated HTTP notification sent by the provider when an event occurs (payment, refund, chargeback).

Authorization, Capture & Settlement

19 terms

Auth-Only: An authorization with no immediate capture, e.g. to validate a card.
Authorization Auth: A request that confirms a card is valid and has available funds and places a hold, without moving money until capture.
Authorization Hold Auth Hold: The temporary reservation of funds on the cardholder's account pending capture.
Authorization Reversal Auth Reversal: Releasing an uncaptured authorization so the cardholder's funds are not held unnecessarily.
Backlog: A queue of transactions, payouts or reviews not yet processed or settled.
Capture: Confirming a prior authorization so funds actually move into the merchant account; can occur with the auth or separately.
Forced Sale Force Post: Capturing without a valid authorization; prohibited and dispute-prone.
Funding: Crediting sale proceeds to the merchant's account.
Funding Hold: Suspension of a payout pending risk or compliance review.
Incremental Authorization: Increasing a previously authorized amount (hotels, rentals) without a new transaction.
Partial Authorization: Approval of an amount lower than requested based on available funds.
Pre-Authorization Pre-Auth: An estimated hold placed before the final amount is known, common in travel and hospitality.
Settlement Settlements: The point at which funds officially move out of the cardholder's account into the merchant account, typically 1-3 business days after capture.
Settlement Batch: The group of captured transactions submitted for settlement, often end of day.
Settlement File: The file detailing settled transactions used for accounting reconciliation.
Settlement Period: The time between capture and funds actually reaching the merchant account.
Trial Authorization Trial Auth: An authorization (often zero-value or low-value) used to validate the card backing a free or discounted trial before later rebills.
Void: Canceling an authorized-but-not-captured transaction, or reversing one depending on its state, before it settles.
Zero-Auth: A zero-value authorization used to validate a card or store its credential without charging, common for verification and for setting up trials/subscriptions.

Card Networks & Card Types

38 terms

Acquiring Bank Acquirer: The bank that holds the merchant account and processes card transactions on the merchant's behalf.
American Express Amex: A network and issuer often operating a three-party model.
BIN: The first 6-8 digits of a card number identifying the issuing bank, country and card type (term used especially by Visa).
BIN Mapping: Associating BINs with attributes (issuer, country, card type, debit/credit, prepaid) to inform routing and decisioning.
BIN Range: A contiguous block of card numbers assigned to one issuer/product.
BIN Routing: Directing transactions to a specific processor, acquirer or MID based on the card's BIN attributes (issuer, country, card type).
BIN Scrubbing BIN Filtering: Filtering or sorting a transaction stream by BIN — for example to suppress or reroute traffic from issuers with high decline or chargeback rates; used legitimately for routing optimization and also abused to dodge fraud or monitoring controls.
Card Brand: The network a card belongs to (Visa, Mastercard, Amex, Discover, etc.).
Card Network: The rails connecting issuing and acquiring banks; Visa, Mastercard, Discover, Amex, etc. set rules, interchange and route transactions.
Card-Not-Present CNP: A transaction without the physical card (e-commerce, phone); higher fraud and chargeback risk.
Card-Present CP: A transaction where the physical card is read (chip, contactless, stripe); lower fraud risk.
Co-Badged Card: A card carrying two networks, allowing routing choice.
Commercial Card Corporate Card: A business card (corporate, purchasing) with specific interchange and data-level rules.
Contactless NFC: Tap-to-pay via card or mobile over NFC.
Credit Card CC: A card letting the holder borrow up to a credit limit to make purchases.
Debit Card DC: A card that draws money directly from the cardholder's bank account rather than extending credit.
Discover: A primarily North American network that also issues.
EMV: The global chip-card standard reducing in-person fraud via cryptographic authentication.
Four-Party Model: Scheme involving cardholder, issuer, merchant and acquirer (Visa, Mastercard).
Funding Source: Whether a card draws on credit, debit, prepaid or charge funds.
ICA Interbank Card Association: Mastercard's bank-identification code, its equivalent of the BIN; each Mastercard-issuing bank has an assigned ICA.
Issuer Country: The country of the bank that issued a card, derived from the BIN; relevant to cross-border fees and risk.
Issuing Bank Issuer: The bank that issued the card to the cardholder, authorizes transactions and initiates chargebacks on their behalf.
JCB: A Japan-origin card network accepted internationally.
Level 2 Data L2: Enriched data (tax, customer code) supplied for commercial cards to qualify for lower interchange.
Level 3 Data L3: Line-item detail for commercial transactions qualifying for the best interchange.
Magnetic Stripe Mag Stripe: Legacy card data storage vulnerable to skimming, being phased out.
Mastercard MC: A global card network with its own risk programs (ECP, MATCH, BRAM/GBPP).
MCC Merchant Category Code: A four-digit code classifying a merchant's line of business; it drives interchange, network rules and risk treatment.
MOTO Mail Order / Telephone Order: Manually keyed transactions from mail or phone orders; a higher-risk CNP category.
Network Token: A scheme-issued secure substitute for the card number, auto-updated on reissue.
PAN Primary Account Number: The full card number identifying the cardholder's account.
Prepaid Card: A card loaded with a fixed amount, often anonymous, sometimes elevated risk.
Three-Party Model: Scheme where the network is also issuer and acquirer (Amex, Diners).
UnionPay CUP: China's card network, the largest by cards issued.
Virtual Credit Card VCC: A digitally generated card number linked to a real account, used for online purchases and testing, often limited to a merchant or amount.
Visa: A global card network and rule-setter with its own risk and monitoring programs.
Visa BIN: A BIN (first 6-8 digits) belonging to a Visa-issued card, identifying the issuing bank under Visa's scheme.

Acquiring, Merchant Accounts & Entities

37 terms

Aggregator: A model grouping many merchants under one account for fast onboarding.
Annual Fee: A recurring yearly charge on a merchant account.
ARN Acquirer Reference Number: A unique identifier letting a transaction be traced through the system, useful for tracking refunds.
Beneficial Owner: The natural person who ultimately owns or controls an entity beyond a threshold (often 25%).
Boarding Onboarding: Integrating and activating a new merchant on the acquirer's platform.
CAID: The network-level identifier of a card acceptor (merchant) carried in transaction messages, related to but distinct from the acquirer-assigned MID.
Card Acceptor: The merchant accepting the card, as named in network transaction data.
DBA: The public trading name of a merchant, which often appears in the billing descriptor.
IBO Independent Business Owner: A legal entity (corporation) set up specifically to apply for MIDs and operate merchant accounts.
ISO Independent Sales Organization: A sales organization that onboards and manages merchants for an acquiring bank rather than being the acquirer; can place merchants across multiple acquirers/MIDs.
ISV Independent Software Vendor: A software firm embedding payments for its merchant customers.
Marketplace: A platform connecting buyers and third-party sellers, with split payment and KYC duties.
Master MID: A parent identifier grouping multiple sub-MIDs, used in aggregation and load balancing.
Merchant Account MID account: A specialized account, created by the acquiring bank, into which card payments are processed and deposited; required to accept cards.
Merchant Agreement: The contract governing obligations between merchant and acquirer (fees, reserves, termination).
Merchant Application: The form and contract a business submits to open a merchant account, supplying ownership, financial and business details.
Merchant of Record MoR: The entity legally and financially responsible for a transaction, including compliance and tax.
MID Merchant ID: The identifier for a merchant account used to route and track its transactions.
MSP Member Service Provider: Mastercard's equivalent of an ISO, a network-registered provider.
Nominee Director: A person named as director on paper while the real controller stays hidden; legitimate in some jurisdictions but commonly abused to conceal the true owner of a merchant.
Nominee Shareholder: A shareholder of record holding shares for an undisclosed beneficial owner.
Offboarding: Exiting a merchant from the platform, settling reserves and residual obligations.
Package Merchant Account Package: Industry slang for a turnkey bundle sold together — a registered company, a director (sometimes a nominee), and a merchant account; offered legitimately by some account providers, and also associated with fronting and transaction laundering when used to disguise the true operator.
PayFac Payment Facilitator: An entity registered with the networks that aggregates sub-merchants under its master MID and assumes their underwriting and risk.
Pre-Approval: A preliminary indication that a merchant is likely to be approved, ahead of full underwriting.
Pre-Vet Pre-Screening: An initial check of a prospective merchant against risk criteria and lists before full underwriting.
Processing History: A merchant's record of prior volume, refunds, chargebacks and account standing, used in underwriting and risk review.
Processor Payment Processor: The entity that routes a transaction among acquirer, network and issuer for authorization and settlement.
Signer Authorized Signer: The person who legally signs for and is accountable on a merchant account application.
Sponsor Bank BIN Sponsor: A network-member bank lending its license/BIN to a PayFac or ISO to operate in the card system.
Statement Descriptor Descriptor: The merchant text shown on a cardholder's statement; clear descriptors reduce confusion-driven disputes.
Sub-Merchant: A merchant operating under a facilitator's master MID rather than its own account.
Third Party Third-Party Processing: Processing transactions that belong to another business through your own MID; generally prohibited and a primary form of transaction laundering.
TID Terminal ID: The identifier of a terminal or acceptance point tied to a MID.
Underwriting: The acquirer's risk assessment of a merchant before opening an account (KYC/KYB, financials, vertical, website).
Undisclosed Products: Goods or services processed through a merchant account that were not disclosed to the acquirer during underwriting; a form of transaction laundering and a card-scheme-rule violation.
White-Label Provider: A provider whose solution is resold under a third party's brand.

Pricing, Fees & Interchange

29 terms

Assessment Fees: Network fees proportional to processed volume.
Authorization Fee: A fixed fee per authorization request regardless of outcome.
AVS Fee: A fee charged per Address Verification System check.
Blended Pricing: A single rate applied to all transactions regardless of card type; simple but opaque.
Chargeback Fee: A fee charged to the merchant for processing each chargeback regardless of outcome.
Cross-Border Fee: A surcharge when issuer and acquirer are in different countries.
Currency Conversion Fee: A charge for FX when a transaction spans currencies.
DCC Dynamic Currency Conversion: Conversion offered to the cardholder in their own currency at the point of sale; revenue source but rule-bound.
Discount Fees Discount Rate: The percentage fees deducted from each card sale to cover processing.
Early Termination Fee ETF: A penalty for ending the merchant contract before term.
Gateway Fee: A charge for use of the technical gateway, distinct from processing fees.
High-Risk Premium: A pricing uplift applied to high-risk vertical accounts.
Interchange: The fee paid to the issuing bank on each transaction, set by the networks; varies by card type, transaction type and industry; the largest cost component.
Interchange Plus IC+: Transparent pricing charging real interchange plus a fixed acquirer markup.
Interchange++ IC++: Pricing separating interchange, scheme fees and acquirer margin for maximum transparency.
Markup: The surcharge an acquirer or PSP adds over interchange and scheme fees.
MDR Merchant Discount Rate: The blended rate taken on each transaction, covering interchange, scheme fees and acquirer margin.
Monthly Minimum: A floor of fees charged even at low volume.
Non-Compliance Fee: A penalty for failing to validate PCI compliance.
Payment Terms Payment Term: The contractual terms governing fees, settlement timing, reserves and obligations on a merchant account.
PCI Fee: A recurring charge for managing PCI compliance.
Per-Transaction Fee: A fixed component added to the percentage on each payment.
Refund Fee: A fee charged for processing a refund.
Retrieval Fee: A fee for handling a retrieval request.
Scheme Fees Network Fees: Fees charged by Visa/Mastercard for use of their networks, separate from interchange.
Setup Fee: A one-time charge at account opening or integration.
Statement Fee: A recurring charge for producing the monthly merchant statement.
Surcharging: Passing card fees to the cardholder, permitted under conditions by jurisdiction.
Tiered Pricing: Grouping transactions into qualified/mid/non-qualified tiers at different rates.

Chargebacks & Disputes

40 terms

ACH Reject: A returned ACH debit (e.g. insufficient funds, account closed, unauthorized), the bank-transfer analog of a card dispute.
Arbitration: The network's final ruling when issuer and acquirer disagree, with fees to the loser.
Authorization Reason Code: A reason-code family for authorization issues (no authorization, declined authorization, expired card).
Cancelled Recurring: A dispute over a recurring charge billed after the cardholder cancelled.
Chargeback CB: A forced reversal of a transaction initiated by the issuer at the cardholder's dispute; the merchant is debited the amount plus a fee but can fight and win.
Chargeback Lifecycle: The sequence from initial dispute through representment to final arbitration.
Chargeback Ratio CB Ratio: Chargebacks divided by transactions (count or volume) over a period; the key health metric watched by networks.
Chargeback Threshold: The ratio limit set by networks above which a merchant enters a monitoring program.
Compelling Evidence: The justifications (proof of delivery, IP, logs, history) submitted in a representment to show legitimacy.
Consumer Dispute Reason Code: A reason-code family for disputes over goods/services (not received, not as described, cancelled, credit not processed).
Credit Not Processed: A dispute that a promised refund or credit was never applied.
Decline Recycling Retry Recycling: Reattempting declines on a schedule to recover approvals; abused when used to push unauthorized rebills.
Dispute: A cardholder's contest of a transaction; the umbrella term for the chargeback cycle.
Dispute API: A programmatic interface to receive and respond to disputes at scale.
Dispute Window Filing Window: The time limit within which an issuer may raise a chargeback or a merchant may respond.
Duplicate Processing: A dispute that one transaction was charged more than once.
First Presentment: The original submission of a transaction for clearing, before any dispute.
First-Party Fraud: Fraud committed by the legitimate account holder; friendly fraud is a subset.
Fraud Reason Code: A dispute reason-code family indicating the cardholder claims the transaction was fraudulent or unauthorized.
Friendly Fraud First-Party Misuse: A cardholder disputing a legitimate transaction they actually made, by mistake, regret or deliberate abuse.
Good Faith Collection: An issuer-acquirer settlement outside normal dispute rights, by mutual agreement.
Goods Not Received: A dispute claiming the paid product or service never arrived.
Issuer Decline: An issuer's refusal of an authorization, distinct from a chargeback but affecting approval rate.
Mastercom: Mastercard's dispute-management platform.
Not As Described SNAD: A dispute that the delivered item materially differs from what was advertised.
Pre-Arbitration Pre-Arb: A renewed issuer challenge after a representment, before network arbitration.
Pre-Compliance: A dispute process outside the standard chargeback cycle invoking a rule violation.
Processing Error Reason Code: A reason-code family for technical/processing faults (duplicate, incorrect amount, late presentment).
Reason Code: A standardized code from the network stating why a chargeback was raised (fraud, not received, processing, authorization).
Representment Re-presentment: Resubmitting a transaction with evidence to contest a chargeback and recover funds.
Representment Package Evidence Package: The compiled documents submitted to contest a chargeback.
Retrieval Request: An issuer request for transaction details or a copy, sometimes preceding a chargeback.
Return Code ACH Return Code: The standardized code (e.g. R01, R10) stating why an ACH transaction was returned.
SAFE System to Avoid Fraud Effectively: Mastercard's issuer fraud-reporting system, the counterpart to Visa's TC40 data.
Second Presentment: The acquirer's resubmission of a disputed transaction with rebuttal evidence (the representment step).
TC40 TC40 Claim: A Visa fraud-report record an issuer files when a transaction is reported as fraudulent; aggregated into fraud monitoring and visible to acquirers/merchants, often surfacing fraud before a chargeback.
Third-Party Fraud: Classic fraud by an unknown party using stolen card data.
Visa CE 3.0 Compelling Evidence 3.0: A Visa framework letting merchants rebut fraud disputes with prior undisputed transaction history tying the cardholder to the merchant.
VROL Visa Resolve Online: Visa's online platform for managing disputes between issuers and acquirers.
Win Rate: The share of contested chargebacks the merchant wins via representment.

Dispute Prevention Tools

9 terms

CDRN Cardholder Dispute Resolution Network: A Verifi/Visa network broadcasting dispute alerts so merchants can refund pre-emptively.
Chargeback Alert: A near-real-time notice of an impending dispute, enabling a pre-emptive refund before a formal chargeback.
Deflection: Preventing a chargeback by resolving the dispute upstream (refund or information) before it forms.
Double Refund Risk: The danger that an alert-driven refund coincides with a chargeback, debiting the merchant twice.
Ethoca: A Mastercard subsidiary providing collaborative fraud and dispute alerts between issuers and merchants.
Ethoca Alerts: Near-real-time notices of confirmed fraud or disputes enabling refunds and stopped fulfillment.
Order Insight OI: A Visa/Verifi tool giving issuers enriched transaction detail to deflect information-driven disputes.
RDR Rapid Dispute Resolution: A Visa/Verifi service that intercepts a dispute and auto-refunds per preset rules before it becomes a chargeback, lowering the CB ratio; opt-in per MID and without full issuer coverage.
Verifi: A Visa subsidiary providing dispute prevention and resolution tools (CDRN, RDR, Order Insight).

Network Risk & Monitoring Programs

16 terms

BRAM Business Risk Assessment and Mitigation: The former name of Mastercard's brand-protection program against illegal or brand-damaging activity.
ECM Excessive Chargeback Merchant: A Mastercard tier for merchants whose monthly ratio exceeds the defined threshold.
ECP Excessive Chargeback Program: Mastercard's program monitoring merchants with high chargeback rates.
Excessive Tier: The aggravated level of a monitoring program with monthly fines and removal risk.
GBPP Global Brand Protection Program: Visa/Mastercard programs combating merchants selling illegal or counterfeit goods.
HECM High Excessive Chargeback Merchant: Mastercard's higher tier for very high chargeback ratios, with steeper penalties.
MATCH: A Mastercard database where acquirers list merchants terminated for cause; checked by other acquirers before boarding.
MATCH Code: A reason code (1-14) explaining why a merchant was added to MATCH.
Network Fine Assessment: A penalty imposed by a network on the acquirer (passed to the merchant) for breaches.
Remediation Period: The window granted to bring a monitored merchant's ratio back under threshold.
Remediation Plan Action Plan: The corrective plan a monitored or at-risk merchant agrees to in order to bring fraud/dispute ratios back within limits.
Standard Tier: The entry level of a monitoring program, with a remediation duty but lower maximum penalties.
VAMP Visa Acquirer Monitoring Program: Visa's unified acquirer-level program consolidating fraud and dispute monitoring.
VDMP Visa Dispute Monitoring Program: Visa's program for merchants exceeding dispute thresholds, with Standard and Excessive tiers.
VFMP Visa Fraud Monitoring Program: Visa's program targeting merchants with high fraud amount and ratio.
VMSS Visa Merchant Screening Service: A Visa service letting acquirers screen risky merchants before boarding.

Reserves & Funding

7 terms

Capped Reserve: Funds withheld until a maximum is reached, after which withholding stops.
Chargeback Liability: The party bearing the loss on a disputed transaction, set by authentication and rules.
Hold / Freeze: A temporary suspension of payouts when risk is detected or under investigation.
Reserve: A portion of revenue the acquirer withholds as security against future chargebacks and risk; common in high-risk; typically released over time, often around 10%.
Reserve Release: Returning withheld funds once the risk period passes.
Rolling Reserve: A percentage of volume held over a moving window (e.g. 10% for 180 days) then released gradually.
Upfront Reserve: An amount withheld or deposited at account start as immediate security.

PCI, Security & Data

29 terms

AOC Attestation of Compliance: The official document attesting a PCI assessment result.
ASV Approved Scanning Vendor: An approved vendor running the external vulnerability scans PCI requires.
Bank Page: The issuer-hosted authentication or payment page a cardholder is redirected to during a 3-D Secure or bank-redirect flow.
Card Hash: An encrypted representation of a card produced by the gateway; only the gateway can decrypt the returned string.
Card on File COF: A stored card credential kept with consent for future or recurring charges.
Cardholder Data CHD: Sensitive cardholder information (PAN, name, expiry) protected under PCI DSS.
Data Breach: A compromise exposing card data, triggering notification duties and penalties.
Detokenization: Recovering original data from a token, restricted to a secured environment.
E2EE End-to-End Encryption: Encryption of payment data between origin and destination.
Encryption: Transforming data into an unreadable form without a key, protecting card data at rest and in transit.
Gateway Payment Gateway: The layer between the merchant account and the card network that securely transmits transaction data and stored tokens.
Hosted Fields iFrame Fields: Isolated input fields (iframe) limiting merchant exposure to card data.
Hosted Payment Page HPP: A payment page served by the provider so card data never touches the merchant.
HSM Hardware Security Module: A secured device dedicated to generating and storing cryptographic keys.
Masking: Showing only part of a PAN (e.g. last four) to limit exposure.
P2PE Point-to-Point Encryption: Encryption from the terminal to the provider, sharply cutting PCI scope.
PAN Truncation: Displaying only part of a card number (e.g. last four digits) to limit exposure.
Payment Gateway Gateway: The layer between the merchant account and the card network; it stores PAN tokens and details securely and constructs the request to the network, which forwards it to the acquirer.
Payment Orchestration: A layer routing transactions across multiple PSPs/acquirers by rule.
Payment Processor Processor: The entity routing a transaction among acquirer, network and issuer for authorization and settlement.
PCI DSS: The security standard governing how businesses that store, process or transmit cardholder data must protect it; being 'in PCI scope' means systems touch raw card data.
PCI Scope: The set of systems that touch cardholder data and are therefore subject to PCI requirements; tokens and hashes reduce scope.
PSP Payment Service Provider: A provider offering payment acceptance, often combining gateway and acquiring.
QSA Qualified Security Assessor: An approved auditor evaluating PCI compliance.
ROC Report on Compliance: A detailed report attesting PCI compliance, required at the highest volumes.
SAQ Self-Assessment Questionnaire: A PCI self-assessment tailored to the merchant's profile (A, A-EP, D...).
Sensitive Authentication Data SAD: CVV, track data and PIN; storage prohibited after authorization.
Tokenization Card Tokens: Replacing raw card data with a non-sensitive token; the merchant references the token, keeping it out of PCI scope.
Vaulting: Secure storage of card tokens at a provider for recurring and one-click payments.

Fraud Types & Attacks

47 terms

3-D Secure 3DS: An online cardholder-authentication protocol (Verified by Visa, Mastercard ID Check) adding a verification layer.
3DS Server: The merchant-side component initiating 3-D Secure authentication with the network.
3DS2 EMV 3DS: The modern 3DS supporting frictionless authentication via risk analysis and enriched data.
Account Farming Identity Farming: Mass-creating accounts or identities to abuse trials, promos or laundering.
Account Takeover ATO: Hijacking a legitimate customer account to make fraudulent purchases.
ACS Access Control Server: The issuer's server that authenticates the cardholder during 3-D Secure.
Affiliate Fraud: Generating fake conversions or traffic to claim affiliate commissions.
Allowlist Whitelist: Items (customers, cards, IPs) always accepted without extra checks.
Authentication Rate: The share of 3DS-submitted transactions that authenticate successfully.
AVS Address Verification System / Address Validation System: Checks that the billing address entered matches the issuer's records; strictness is tunable, and a mismatch can decline the transaction; keeping it on filters fraud.
Behavioral Biometrics: Analyzing typing, movement and behavior to detect fraud.
BIN Attack: Automated generation of card numbers from a known BIN to find valid combinations.
Blocklist: Items (cards, emails, devices) always refused.
Bot Attack: Malicious automation against payments (card testing, account fraud, scalping).
Card Testing Carding: Validating stolen numbers via micro-transactions or repeated authorizations.
Chargeback Fraud Cyber-Shoplifting: Abusively disputing a legitimate transaction to keep both goods and money.
Chargeback Guarantee: A service indemnifying the merchant for approved fraud chargebacks.
Chargeback Ring: An organized group coordinating mass disputes against merchants.
Credential Stuffing: Automated login attempts using leaked username/password pairs to take over accounts.
CVV: The 3-4 digit code used to verify the cardholder physically holds the card, adding fraud protection to CNP transactions.
Device Fingerprinting: Identifying a device by its technical traits to detect repeat and fraud.
Directory Server DS: The network component routing 3DS messages between merchant and issuer.
Enumeration Attack: Mass guessing of numbers, expiry and CVV to find valid card data.
False Negative: A fraudulent transaction wrongly accepted, causing fraud and chargebacks.
False Positive: A legitimate transaction wrongly rejected by fraud controls, costing revenue.
Fraud: Unauthorized or deceptive use of a payment instrument causing financial loss.
Fraud Rate Fraud-to-Sales: Fraud volume divided by total volume, watched by VFMP-type programs.
Fraud Scoring Risk Score: A numeric risk rating from a model combining many signals.
Frictionless Flow: A 3DS2 authentication validated in the background without cardholder action when risk is low.
Friendly Fraud Rate: The share of chargebacks attributable to abusive disputes by legitimate cardholders.
Geolocation Check: Comparing device/IP location with billing data to gauge risk.
Identity Theft: Using another's personal data to obtain instruments or commit fraud.
Liability Shift: Movement of fraud-chargeback liability to the issuer when 3DS authentication succeeds.
Manual Review: Human examination of suspect transactions before approval or rejection.
Mule Network: A coordinated set of money-mule accounts used to fan out and consolidate illicit funds.
OTP One-Time Password: A single-use code sent to the cardholder to complete strong authentication.
Phishing: Tricking the cardholder into disclosing card data or credentials.
Promo Abuse Bonus Abuse: Exploiting promotions, sign-up bonuses or referrals beyond intended use.
Proxy / VPN Detection: Spotting tools that mask real location, a heightened-risk signal.
Refund Fraud Refund Abuse: Manipulation to obtain undue refunds on real or nonexistent purchases.
Refund-to-Alternate: Routing a refund to a card or account different from the one charged.
Risk Rule: A configured condition (amount, country, velocity) triggering block, review or challenge.
Skimming: Capturing card data via a device on a terminal or ATM.
Step-Up Authentication: An explicit challenge (OTP, biometrics) requested under 3DS2 when risk warrants.
Synthetic Identity: A blend of real and fabricated data forming a hard-to-detect false identity.
Triangulation Fraud: A fake intermediary merchant collects a real customer payment, then buys the item with a stolen card.
Velocity Check Velocity Limit: An anti-fraud rule limiting attempts per card, device or IP over an interval.

High-Risk Fraud & Evasion Typologies

33 terms

Aged Account: A merchant account or company with an established history, valued for appearing lower-risk; sometimes acquired pre-aged to bypass scrutiny.
Burn & Run Burn and Run: Slang for running maximum volume through a processor and absconding with the funds before chargebacks, refunds and reserve clawbacks catch up; a form of bust-out / exit fraud.
Bust-Out: Building a clean processing history, then spiking volume with fraudulent or unfulfilled sales and disappearing before chargebacks land.
Cascading: Dispersing transactions across multiple MIDs via routing logic to balance load and approval rates; legitimate as resilience, abused when used to dodge ratio thresholds.
Cash-Out: Converting fraudulently obtained value into usable funds or goods.
Chargeback Suppression: Using refunds/alerts (e.g. RDR) primarily to keep a ratio artificially low rather than to fix root-cause harm.
Cloaking: Serving different website content to payment-processor reviewers, card-scheme monitoring bots or compliance crawlers than to real customers, in order to disguise a site's true (often prohibited) business; an evasion technique and scheme-rule violation.
Collusive Merchant: A merchant knowingly cooperating in fraud or laundering rather than a victim of it.
Curbstoning: Disguising who really controls/operates an account or asset to evade accountability.
Descriptor Obfuscation Vague Descriptor: Using unclear or unrelated billing descriptors so cardholders cannot recognize a charge.
Drop Drop Address: A receiving address used to collect goods bought with stolen instruments.
Drop Company: A disposable entity set up to be abandoned once it draws scrutiny or chargebacks.
Front Company Fronting: A legitimate-seeming entity masking a prohibited underlying activity.
Jurisdiction Shopping Regulatory Arbitrage: Choosing licensing or acquiring jurisdictions to avoid stricter oversight.
KYC Circumvention: Defeating identity checks via forged or borrowed documents and nominee data.
Lander / Funnel: A standalone sales/landing page that drives orders to a MID; neutral in marketing but abused to feed laundering or trial-trap billing.
MID Stacking MID Rotation: Spreading volume across many merchant IDs to keep each one's chargeback/fraud ratio below monitoring thresholds.
Miscoding: Assigning a merchant category code that does not reflect the merchant's true business, often to disguise a prohibited or high-risk vertical; a serious scheme-rule violation.
Money Mule Mule: A person whose account is used to receive and forward illicit funds.
No-Ship: Taking payment for goods or services with no intent to deliver.
Partial-Ship: Shipping only some orders to keep delivery metrics plausible while pocketing the rest.
Pass-Through Merchant Front Merchant: A legitimate-looking merchant whose MID is used to push a hidden party's transactions.
Ping Card Pinging: Submitting very small or zero-value authorizations to test whether a card is live; a card-testing behavior.
Ratio Gaming Threshold Gaming: Manipulating the denominator (extra small transactions) or refund timing to hold chargeback ratios under program limits.
Refund Abuse: Exploiting refund processes to extract funds improperly.
Reshipping Fraud: Using intermediaries to forward goods bought with stolen cards, obscuring the destination.
Shelf Company Aged Company: A pre-registered dormant company sold to give an instant 'aged' history.
Shell Company: An entity with no real operations used to obscure ownership or move funds.
Split Transaction Splitting: Breaking one payment into several to evade a cap; prohibited.
Stacking Account Stacking: Operating many merchant accounts in parallel for the same underlying business, sometimes to spread volume below monitoring thresholds.
Transaction Laundering: Processing the sales of an undisclosed business through another merchant's account so the real activity is hidden from the acquirer.
Triangulation: A scheme where a fake storefront collects a genuine customer payment and fulfils it using a stolen card elsewhere.
Warm-Up: Gradually building processing history and volume on a new merchant account before scaling; a normal ramp for legitimate businesses and also a precursor pattern in bust-out schemes.

AML / KYC / KYB / Sanctions

58 terms

Adverse Media Negative News: Searching unfavorable information on a client as part of diligence.
AML Anti-Money Laundering: The framework to stop laundering of illicit funds through payment flows.
Beneficial Ownership: The natural persons who ultimately own or control an entity, the focus of KYB verification.
Beneficial Ownership Register UBO Register: A registry of entities' true owners, used in KYB.
Beneficial Ownership Threshold: The ownership percentage (often 25%) above which a person is treated as a beneficial owner.
CDD Customer Due Diligence: Identifying and assessing the risk a customer poses.
CFT Counter-Financing of Terrorism: Measures to prevent terrorist financing, paired with AML.
Compliance Officer: The person responsible for implementing and overseeing the AML/KYC program.
CTR Currency Transaction Report: A report of cash transactions above a regulatory threshold.
De-Risking: Exiting or refusing whole client categories to avoid compliance risk rather than managing it individually.
Director Churn: Frequent or rapid changes of directors on an entity.
Document Verification: Authenticating an identity document (passport, license) during KYC.
EDD Enhanced Due Diligence: Heightened diligence for high-risk clients (PEPs, sensitive jurisdictions).
Egmont Group: The global network of financial intelligence units that share information.
EIN Employer Identification Number: A US business tax identifier collected during KYB.
Embargo: A prohibition on dealings with a country or region.
FATF Financial Action Task Force: The intergovernmental body setting global AML standards.
FIU Financial Intelligence Unit: A national body receiving and analyzing suspicious-activity reports.
Formation Agent Company Formation Agent: A service that incorporates entities on behalf of clients; legitimate but a common layer in shell structures.
Fronting: Using a legitimate-seeming person or entity to mask the real party behind an account or activity.
Funnel Account: An account that receives many inbound payments from disparate sources and rapidly pushes them onward, used to consolidate and move funds.
IDV Identity Verification: Document and biometric checks confirming a person is who they claim.
Integration: The final laundering stage: reintroducing funds as apparently legitimate.
KYB Know Your Business: Verifying a merchant entity's identity, legitimacy and beneficial owners.
KYC Know Your Customer: Verifying customer identity to prevent fraud and laundering.
KYCC Know Your Customer's Customer: Extending KYC to a merchant's own customers, relevant for PayFacs and aggregators.
Layered Ownership Ownership Onion: Stacked holding entities across jurisdictions obscuring the ultimate owner.
Layering: The second laundering stage: multiplying operations to obscure origin.
Liveness Check: Confirming a real, present person performs a biometric check, countering deepfakes.
MLRO Money Laundering Reporting Officer: The designated officer for filing suspicious-activity reports.
OFAC Office of Foreign Assets Control: The US body administering economic sanctions, including the SDN List.
Ongoing Monitoring: Periodic re-assessment of client risk and currency of KYC data.
Pass-Through Account: An account used mainly to move funds onward rather than for genuine business activity.
PEP Politically Exposed Person: A person holding a prominent public function, subject to enhanced scrutiny.
Phoenixing Phoenix Company: Closing an entity to escape liabilities and re-launching the same business under a new one.
Placement: The first laundering stage: introducing illicit funds into the financial system.
Politically Exposed Person PEP: A person in a prominent public role, subject to enhanced scrutiny.
Red Flag Indicator: A predefined warning sign suggesting possible laundering, fraud or evasion.
Registered Agent: The official contact of record for an entity in its jurisdiction.
Risk-Based Approach RBA: Scaling AML control intensity to assessed risk.
Sanctions Evasion: Attempting to transact in breach of sanctions by concealing parties or routing.
Sanctions Screening: Checking customers and transactions against international sanctions lists.
SAR Suspicious Activity Report: A report to authorities when activity appears linked to laundering.
SDD Simplified Due Diligence: Lighter diligence for low-risk clients and products.
SDN List Specially Designated Nationals: OFAC's list of sanctioned persons/entities with whom transactions are prohibited.
Smurf: A person who conducts many small sub-threshold transactions on behalf of a launderer (see structuring).
Source of Funds SoF: Evidence of where the money in a transaction or relationship came from.
Source of Wealth SoW: Evidence of how a high-risk client's overall wealth was accumulated.
STR Suspicious Transaction Report: The international equivalent of a SAR.
Straw Owner: A person presented as the owner or controller of a business while a hidden party actually controls it.
Structuring Smurfing: Breaking transactions below reporting thresholds to evade controls.
Trade-Based Laundering TBML: Using over/under-invoiced trade to move illicit value.
Transaction Monitoring: Continuous analysis of flows to detect suspicious laundering or fraud patterns.
Travel Rule: The FATF requirement to pass originator/beneficiary information with transfers, extended to virtual assets.
Typology: A documented pattern of how a financial crime is carried out, used to train detection.
VASP Virtual Asset Service Provider: A crypto service provider subject to AML and the Travel Rule.
Virtual Office: An address service with no real premises, often used by shells.
Watchlist: A register of higher-risk persons/entities (sanctions, PEPs, adverse media) used in screening.

Subscription, Continuity & Rebill

32 terms

Account Updater: A service that auto-refreshes new card details for reissued cards in subscriptions.
Affiliate: A third party that promotes an offer for a commission on resulting sales.
Billing Frequency: How often a subscriber is charged (weekly, monthly, quarterly, annually).
CIT Customer-Initiated Transaction: A transaction the cardholder actively starts, the basis for a mandate for later MITs.
Decline Salvage Recovery: Recovering revenue from initially declined recurring charges through retries and updated credentials.
Downsell: A cheaper alternative offered after a buyer declines a primary or upsell offer.
Dynamic Descriptor: A descriptor adjusted per transaction to reflect the product, reducing confusion.
Forced Continuity: A continuity plan customers are pushed into without clear, informed consent.
Grace Period: A window after a failed charge or before cancellation takes effect during which service continues or retries occur.
Hard Descriptor Static Descriptor: A fixed billing descriptor that does not change per transaction, the counterpart of a dynamic descriptor.
Initial Sale: The first transaction that converts a prospect into a recurring customer and creates the subscriber record.
Lead Prospect: A potential customer captured before any sale.
MIT Merchant-Initiated Transaction: A transaction the merchant triggers without the cardholder present (e.g. subscription renewal).
MRR Monthly Recurring Revenue: The predictable monthly revenue from active subscriptions; also used loosely as a catch-all label for the recurring/subscription business itself.
Negative Option Billing Continuity: Auto-charging unless the customer actively cancels; permitted only under strict disclosure rules.
Offer: A specific product/price/terms combination presented to a buyer in a funnel or campaign.
One-Time Offer OTO: A single, time-limited offer shown once in a funnel, typically post-purchase.
Order Bump Bump Offer: A small add-on offer presented at checkout alongside the main purchase.
Rebill: A subsequent recurring charge after the initial sale or trial.
Rebill Cycle Billing Cycle: The recurring interval (weekly, monthly, etc.) on which a subscriber is charged after the initial sale.
Rebill Rate: The share of customers who successfully rebill after the first charge or trial.
Recurring Billing: Automatic periodic charging for subscriptions and ongoing services.
Sales Funnel Funnel: The staged path from landing page through checkout, upsells and rebills that moves a visitor to a recurring customer.
Soft Descriptor Billing Descriptor: The text on the cardholder's statement; clear descriptors reduce disputes.
Stored Credential: A card saved with consent for future payments, governed by network rules.
Subscriber: An active recurring customer with a stored payment credential billed on a schedule; 'token' refers to that customer's saved card-on-file.
Traffic Source: The origin of visitors to an offer (search, social, email, affiliate, media buys).
Trial Free Trial: A period before the first rebill, often free or discounted to lower conversion friction, with the full charge triggering when it ends.
Trial Conversion: The point at which a free or discounted trial turns into a full-price recurring charge.
Trial Trap: A trial designed so customers are charged after conversion without clear consent or easy cancellation.
Unauthorized Rebill: A recurring charge taken after cancellation or without valid consent.
Upsell: An additional, higher-value offer presented to a buyer during or after the initial sale.

High-Risk Verticals

65 terms

Adult Content: Adult video/sites/services; a high-risk vertical with dedicated MCCs and rules.
Adult Dating: Adult-oriented dating combining content and subscription risks.
Adult Gateway: A gateway/provider offering oriented to the adult vertical.
Adult Toys: Adult-goods commerce, classed high-risk by association with adult content.
Alternative Medicine: Alternative-medicine offerings with sensitive claims.
Auctions: Online auctions; risk of delivery, counterfeits and party disputes.
Binary Options: A speculative product widely banned or restricted and strongly tied to fraud.
Bizopp Business Opportunity: Business-opportunity offers; historically high chargebacks and regulatory scrutiny.
Cannabis: A heavily restricted sector with limited card acceptance.
Casino / Gambling: Gambling operations requiring jurisdictional licensing.
Casino Merchant: A merchant operating in the gambling vertical.
CBD: Hemp-derived products with legal status varying by jurisdiction.
CFD Trading Contracts for Difference: Leveraged derivatives; high-risk and regulator-controlled.
Charity / Non-Profit: Donation collection; risk of card testing and donation fraud.
Coaching / Info Products: Online courses and coaching with high disputes over delivered value.
Continuity Supplement Autoship Supplement: A supplement sold on a recurring subscription or autoship basis.
Credit Repair: Credit-improvement services under consumer regulation; high-risk.
Crypto Cryptocurrency: Buying, selling and services around digital assets; high-risk under AML and emerging rules.
Data Broker: A buyer/seller of consumer data, with privacy and regulatory risk.
Dating: Online dating; risk from recurring billing, fraud and content.
Debt Collection: A regulated activity prone to disputes and consumer complaints.
Digital Goods: Non-physical goods where proof of use/access is essential against disputes.
Document Services: Visa/ESTA/form preparation; risk where perceived value is unclear.
Downloadable Software: Software delivered by download.
Dropshipping: Selling without stock, shipped directly by a supplier; dispute-prone for non-receipt and delays.
Escort Directory: An escort listing service; a very restricted vertical.
Firearms & Ammo: Restricted vertical subject to licensing and scheme rules.
Forex FX Trading: Currency trading; high-risk due to chargebacks and financial regulation.
Functional Foods: Foods marketed with functional health benefits.
Gaming / Virtual Goods: Video games and virtual items; risk of account fraud and chargebacks on digital purchases.
Hemp: Hemp-derived products, subject to local rules and enhanced underwriting.
Herbal Products: Herbal/botanical consumer products.
High-Risk Merchant: A business deemed elevated-risk for fraud, chargebacks or regulation, subject to higher fees and reserves.
High-Ticket Coaching: Expensive coaching programs with high dispute exposure.
iGaming Online Gambling: Online casinos, sports betting and poker; heavily regulated and exposed to fraud and laundering.
IPTV: Internet TV services; may signal pirated content or copyright risk depending on context.
Kava: A monitored botanical product.
Kratom: A botanical substance restricted or refused by many processors.
Lead Generation Lead Gen: Selling sales leads; risk around consent and data handling.
Lottery Scam Prize Fraud: Demanding payment to release a nonexistent prize or winnings.
MLM Multi-Level Marketing: A pyramid-structured sales model legal under conditions; regulatory and chargeback risk.
Muscle-Building Supplements: Bodybuilding and performance supplements.
Nootropics: Cognition/brain-boosting products with sensitive health claims.
Nutraceuticals Nutra: Supplements and health products; high-risk due to claims and subscription models.
Online Pharmacy Pharma: Medicine sales requiring licensing and strict network rules.
Online Pharmacy Gateway: A gateway/provider offering for online pharmacy; licensing must be verified.
Precious Metals Bullion: Gold/silver and bullion dealing, with AML exposure.
Prohibited Business: A vertical banned by an acquirer or network (e.g. illegal goods), causing refusal or termination.
Replica Goods: Replica or counterfeit-adjacent branded goods; trademark and prohibited-goods risk.
Restricted Business: A vertical allowed only under strict conditions (licenses, controls, caps).
Sexual Enhancement Male Enhancement: Sexual-performance products under heavy scrutiny.
Sports Betting: A regulated iGaming segment varying by jurisdiction.
Subscription Box: A recurring physical box service; risk around cancellation and disclosure.
Supplement Merchant: A seller of dietary supplements; high-risk for claims and subscription billing.
Sweepstakes Prize Draw: Promotions offering prizes by chance; a high-risk vertical frequently exploited for prize/lottery scams.
Tech Support: High-risk for scams and chargebacks, closely watched by networks.
Telemedicine Telehealth: Remote medical services; risk varies by prescription and product.
Testosterone Booster: Products making hormonal claims.
Ticketing: Event/ticket sales; risk on cancellations, resale and deferred delivery.
Timeshare: Sale of stay rights; risk of disputes and aggressive sales practices.
Tobacco: Tobacco products, subject to strong restrictions and age rules.
Travel & Hospitality: High-risk due to long gaps between purchase and service and insolvency exposure.
Vape / E-Cigarettes: Restricted vertical due to tobacco rules and age verification.
Weight-Loss Pills: Slimming products with elevated claims and chargeback risk.
Weight-Loss Tea Detox Tea: Slimming teas, frequently monitored for claims.

Alternative Payment Methods

23 terms

ACH Automated Clearing House: The US batch interbank transfer/debit network, favored for low cost.
ACH Return: A returned ACH debit (insufficient funds, opposition), functionally like a dispute.
Alipay: A major Chinese wallet for online and in-store QR payments.
APM Alternative Payment Method: Any non-card-rails method (e-wallet, bank transfer, direct debit, BNPL, crypto).
Apple Pay: Apple's mobile wallet enabling tokenized contactless and online payments.
BNPL Buy Now Pay Later: Installment or deferred payment at checkout; fast-growing and under increasing regulation.
E-Wallet Digital Wallet: An account storing funds or cards to pay online (PayPal, Skrill, Neteller; Apple Pay, Google Pay).
Google Pay: Google's mobile wallet for tokenized in-store and online payments.
iDEAL: A Dutch bank-transfer online payment method.
Klarna: A major BNPL provider offering deferred and split payments.
Mobile Money: Phone-based payment services (e.g. M-Pesa) common in emerging markets.
Neteller: An e-wallet often used in online gaming and trading.
Pay by Bank: Initiating a bank transfer via open banking at checkout, an alternative to cards.
PayPal: A major wallet/PSP for payments and transfers with its own dispute system.
PIX: Brazil's central-bank instant payment system.
Prepaid Voucher Paysafecard: An anonymous cash-funded voucher used online, common in iGaming.
Same Day ACH: A faster ACH option settling eligible US transfers within the same business day.
SEPA Single Euro Payments Area: The harmonized euro payments area for credit transfers and direct debits.
SEPA Direct Debit SDD: A euro-area recurring or one-off pull on a bank account via mandate.
Skrill: An e-wallet common in high-risk verticals (iGaming, forex).
UPI Unified Payments Interface: India's widely used instant interbank payment system.
WeChat Pay: A payment solution inside WeChat, dominant in China.
Wire Transfer: A direct, generally irrevocable funds transfer for larger amounts.

Crypto & Web3

14 terms

Blockchain Analytics: Tracing on-chain flows to assess risk and compliance.
Chain Hopping: Swapping across blockchains/assets to break traceability.
Crypto Payment Gateway: A service letting a merchant accept crypto, with optional fiat conversion.
Custodial Wallet: A wallet whose keys a third party holds, subject to regulatory duties.
Fiat Conversion: Converting received crypto into traditional currency for the merchant.
Gas Fee: The cost of executing a transaction on a blockchain such as Ethereum.
Mixer / Tumbler: A service obscuring the origin of crypto funds; a strong laundering risk signal.
Non-Custodial Wallet Self-Custody: A wallet the user alone controls, with elevated compliance risk for counterparties.
On-Ramp / Off-Ramp: Services converting between fiat and crypto.
Peel Chain: Splitting crypto into many small hops to launder and obscure a trail.
Sanctioned Address: A wallet address listed by authorities as prohibited.
Stablecoin: A crypto asset pegged to a stable value (often USD), used for low-volatility payments.
Wallet Address: A public identifier receiving crypto, screened for provenance risk.
Wallet Screening Address Screening: Checking a crypto address against sanctions and risk databases before transacting.

Regulation & Compliance Frameworks

21 terms

AISP Account Information Service Provider: A PSD2-licensed account-aggregation provider.
AMLD Anti-Money Laundering Directive: The successive EU AML directives (4/5/6 AMLD).
BaFin: Germany's federal financial supervisor for payment and e-money institutions.
EBA European Banking Authority: The EU authority issuing technical standards on payments and SCA.
EMI Electronic Money Institution: A licensed issuer of e-money and provider of payment services.
FCA Financial Conduct Authority: The UK financial-services and payments regulator.
FinCEN: The US financial-crimes enforcement authority.
FTC Federal Trade Commission: The US authority sanctioning deceptive practices, including deceptive billing.
GDPR: The EU data-protection regulation covering personal and payment data.
MiCA Markets in Crypto-Assets: The EU regulation governing crypto-asset issuance and services.
MSB Money Services Business: A US money-services business subject to registration and AML duties.
Open Banking: Secure API-based sharing of bank data with consent, underpinning new payments.
PI Payment Institution: A licensed payment-services provider that is not a bank.
PISP Payment Initiation Service Provider: A PSD2-licensed provider initiating transfers from a customer's account.
PSD2 Payment Services Directive 2: The EU directive governing payments, mandating strong authentication and opening banking data.
PSD3 Payment Services Directive 3: The planned evolution of the EU payments framework, strengthening fraud, data access and supervision.
Reg E Regulation E: US rules protecting consumers on electronic fund transfers and disputes.
Reg Z Regulation Z: US implementation of the Truth in Lending Act, covering credit and card disputes.
SCA Strong Customer Authentication: A PSD2 requirement to authenticate the cardholder with at least two factors.
SCA Exemption: Cases where SCA is not required (low value, TRA, MIT, trusted beneficiary).
TRA Transaction Risk Analysis: An SCA exemption based on demonstrated low fraud via risk analysis.

Metrics, Operations & Industry Terms

51 terms

Annualized Volume: A projection of yearly processing volume, used to size reserves and limits.
AOV Average Order Value: The average value of a single order, distinct from recurring value.
Authorization Optimization Auth Optimization: Techniques (retries, network tokens, enriched data) that raise approval rates.
Average Transaction Value: The typical transaction amount, monitored for anomalies.
Backup Processor: A secondary provider ready to take over on closure or outage.
Burn and Churn Burn/Churn: Slang for rapidly cycling through merchant accounts (or cards) — using each until it is shut down or its chargeback ratio forces closure, then moving to the next; associated with bust-out operations.
Buyer Protection: Platform/wallet guarantees covering non-delivery and non-conformity.
CAC Customer Acquisition Cost: The cost of acquiring one paying customer.
Churn: The rate at which subscribers cancel or lapse over a period.
Compliance Compliance Function: The function ensuring a payments business meets legal, regulatory and card-scheme obligations (AML/KYC, PCI, consumer rules).
Conversion Rate: The share of payment attempts completed successfully.
Cooling-Off Period: A legal window to cancel a purchase, relevant to disputes.
CRM Customer Relationship Management: The system tracking customers, orders, subscriptions and billing events across their lifecycle.
Decline Ratio: The share of attempted transactions that are declined.
Delivery Confirmation Proof of Delivery: Evidence the item was delivered, key compelling evidence against a chargeback.
Escrow: Holding funds with a neutral party until conditions are met.
GMV Gross Merchandise Value: The gross value of goods processed over a period; a volume indicator.
Gross Volume: Total transaction value processed before refunds, chargebacks and fees are deducted.
Holdback: Another term for funds withheld as reserve against future losses.
Instant Payout: Accelerated funding to the merchant ahead of the normal cycle.
Issuer Response Code: A standardized code returning the result of an authorization request.
Latency: The processing delay on a payment request, affecting conversion.
Load Volume Load: Slang for the transaction volume directed onto a given MID or processor.
Load Balancing: Distributing volume across MIDs to smooth load.
LTV: The total net revenue expected from a customer over the entire relationship.
Merchant Portal: The web interface where a merchant views transactions, settlements, disputes and reports for a MID.
Merchant Risk Score: A numeric profile rating used at boarding and in ongoing review.
Multi-Currency Processing MCP: Accepting and settling in multiple currencies.
Net Volume: Transaction value remaining after refunds, chargebacks and fees are deducted from gross volume.
Network Token Service NTS: Issuance and management of network tokens, improving approval and resilience to reissues.
Offshore Offshore Acquiring: Using an acquirer or entity in a foreign, often lighter-touch jurisdiction to bank verticals hard to support locally.
Onboarding Documentation: The documents a merchant must provide (KYB, financials, site, policies) to open an account.
Payment Dispatch: A routing/orchestration layer that distributes transactions across multiple processors or MIDs according to rules (also marketed under names such as ATRI).
Payout: The transfer of settled, net-of-fees funds to the merchant.
Portfolio Monitoring: Ongoing acquirer surveillance of merchants to catch drift and fraud.
Processing Volume Cap Volume Cap: A processing limit an acquirer imposes on a risky merchant.
Recovery Rate: The share of failed recurring payments recovered via retries and updates.
Refund Policy: The stated refund terms, required by networks and dispute-reducing.
Refund Rate: The share of transactions refunded, a quality and dispute signal.
Risk Appetite: The level of risk an acquirer will accept in its portfolio.
Risk Team Risk & Fraud Team: The team that underwrites merchants, monitors portfolios and investigates fraud, chargebacks and suspicious activity.
Routing Rules: The configured logic deciding which processor, acquirer or MID a given transaction is sent to.
Scoring Risk Scoring: Assigning a numeric risk value to a transaction, customer or merchant from a model combining many signals.
Settlement Currency: The currency in which the merchant is funded after any conversion.
Settlement Delay: The lag between capture and funds reaching the merchant account.
Smart Routing: Dynamic selection of acquirer/MID to optimize approval and cost.
Split Payout Marketplace Split: Dividing a payment among multiple recipients (e.g. marketplace sellers).
Switch System Payment Switch: A system that receives transactions and routes/switches them to the appropriate processor, acquirer or network endpoint.
TPV Total Payment Volume: The total payments processed, a measure of PSP or merchant activity.
Uptime Availability: The share of time the gateway is operational, critical to not losing transactions.
Website Compliance: Network requirements (legal notices, refund policy, descriptor, pricing) for card acceptance.

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