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Glossary

TL;DR
  • Plain-English definitions for the jargon that turns up in processor emails and network notices
  • Starts with the questions merchants actually ask, then runs A to Z
  • Want the abbreviation expanded rather than explained? Use Acronyms

Key terms and definitions in payments, chargebacks, and risk management.

Common Questions​

What is a chargeback ratio and why does it matter? : It's the share of your transactions that turn into disputes. Visa and Mastercard both track it. Processors start flagging you around 0.9%. Network programs like VAMP and ECM kick in higher, with per-dispute fees that escalate. It's the most important number in payment risk. → Chargebacks Overview | Network Programs

Why is Visa threatening to fine me? : You've probably blown past your processor's chargeback threshold, usually around 0.9%. Now they're passing through VAMP per-dispute fees, or asking for a remediation plan. Cut disputes fast. You have about three months before they drop you. → Reduce Chargebacks Fast | Network Programs

Why was my merchant account terminated? : Usually one of three things. Excessive chargebacks, excessive fraud, or a terms violation. If you landed on the MATCH list, that's an industry blacklist. Most processors won't onboard you for the five years it lasts. → MATCH/TMF List

How do I lower my processing fees? : Start with your effective rate: total fees ÷ total volume. Above 2.9% on card-not-present, you may be overpaying. Then negotiate. Send correct transaction data so you hit better interchange. And price interchange-plus against your flat rate. → Buying Payments | Interchange

What does the charge description on my customer's statement mean? : That's your billing descriptor. If customers don't recognize it, they dispute the charge. Show your business name plus a phone number or URL. → Descriptors and Comms

What's the difference between fraud and friendly fraud? : "Real" fraud means someone used a card without the owner's consent. Friendly fraud is a real customer who made a real purchase, then disputed it. You will also see friendly fraud called first-party fraud or first-party misuse, which mean the same thing. They'll claim they didn't authorize it, never got it, or weren't satisfied. Different problems, different fixes. → Fraud Types | Friendly Fraud

Should I fight this chargeback or just accept it? : Depends on the amount, the reason code, and your evidence. Under $25, it's rarely worth the effort. Over $100 with delivery confirmation or 3DS authentication, fight it. Match the evidence to the specific reason code. → Chargebacks Overview | Compelling Evidence

What is interchange and can I negotiate it? : Interchange is the fee the customer's bank charges on every transaction. Blended across a normal US card mix, that's about 0.9% in person and 1.4% online. One card can sit far off that. Regulated debit is 0.05% + $0.21. A non-qualified transaction is 3.15% + $0.10. You can't negotiate interchange itself, since Visa and Mastercard set it. You can negotiate your processor's markup on top. → Interchange | How the blend is derived

How do I know if my processing fees are too high? : Calculate your effective rate: total fees ÷ total volume. Online, 2.7-3.0% is typical. Above 3.5%, something's wrong. Compare against benchmarks for your business type. → Reading Statements | Benchmarks

What is 3D Secure and do I need it? : 3D Secure (3DS) is an extra verification step at online checkout. The customer confirms through their bank's app or a one-time code. Fraud liability shifts from you to the bank. If you sell online and have a fraud problem, nothing else works as well. → 3D Secure

  • Chargeback - Forced transaction reversal initiated by the cardholder's bank
  • Authorization - The process of verifying a transaction can proceed
  • 3DS (3D Secure) - Authentication protocol for card-not-present transactions
  • Interchange - Fee paid by acquiring bank to issuing bank per transaction
  • PCI DSS - Security standard for handling cardholder data

A​

AAV (Accountholder Authentication Value) : Mastercard's authentication verification value generated during Identity Check (3DS) authentication.

ABU (Automatic Billing Updater) : Mastercard's service that automatically updates stored card credentials when cards are replaced or renewed.

ACMP (Acquirer Chargeback Monitoring Program) : Mastercard's umbrella name for ECM, HECM and EFM. It carries no threshold and no fine of its own. Worth knowing because your acquirer will use it in an email and expect you to follow. Get identified in ACMP for four months or more and Mastercard's fifth subscription standard, the receipt after each charge, turns from a recommendation into a requirement. → Network Programs

ACH (Automated Clearing House) : US electronic network for bank transfers, including direct deposits and bill payments. → ACH Operations

Acquirer : The financial institution that processes card transactions on behalf of merchants. Also called "acquiring bank" or "merchant bank." → Payment Ecosystem

Allocation : Visa's dispute process. Liability is assigned automatically from transaction data, with no merchant response.

ARN (Acquirer Reference Number) : A 23-digit number assigned by the acquirer to uniquely identify a transaction. Critical for dispute tracking.

ATO (Account Takeover) : Unauthorized access to and control of a legitimate user's account. → Account Takeover

Authorization : Checking that a transaction can proceed. Verifies available credit or funds and card validity. → Authorization & Capture

AVS (Address Verification Service) : Compares the billing address the customer gives you to the one the issuer has on file. → AVS & CVV

B​

BIN (Bank Identification Number) : First 6-8 digits of a card number identifying the issuing bank. Also called IIN (Issuer Identification Number).

BRAM (Business Risk Assessment and Mitigation) : Mastercard program for high-risk merchant category oversight. → Network Programs

Bust-Out : Credit built up legitimately over time, then maxed out all at once before the account vanishes. → Fraud Rings

C​

CAVV (Cardholder Authentication Verification Value) : Visa's cryptographic value proving cardholder authentication during 3D Secure.

Central Site Business Date : Mastercard's reference date found in PDS 0158, subfield 5, used for calculating chargeback time frames.

Chargeback : Forced reversal of a transaction initiated by the cardholder's bank. Also called "dispute" in some contexts. → Chargebacks Overview

CIT (Cardholder Initiated Transaction) : A transaction initiated directly by the cardholder, as opposed to merchant-initiated.

CNP (Card Not Present) : Transactions without the physical card. Online, phone, or mail orders. → Payments Overview

Collaboration : Visa's dispute process. The merchant can send evidence before the final decision.

Compelling Evidence : Documentation that proves cardholder participated in or benefited from a disputed transaction. → Winning Evidence

CP (Card Present) : Transactions where the physical card is used at a terminal or point of sale.

CVV/CVC (Card Verification Value/Code) : 3-4 digit security code on card used for CNP verification. CVV2 specifically refers to the printed code. → AVS & CVV

D​

DE (Data Element) : Specific field in ISO 8583 message format used for payment card transactions. Example: DE 72 contains message text.

DPD (Days Past Due) : Number of days a payment is overdue from its due date.

E​

ECI (Electronic Commerce Indicator) : Value indicating the authentication level of an e-commerce transaction. Key values: 05 (fully authenticated), 06 (attempted), 07 (not authenticated).

ECP (Excessive Chargeback Program) : Mastercard's monitoring program for merchants exceeding chargeback thresholds. ECM is 100-299 chargebacks AND a 1.50-2.99% ratio. HECM is 300+ AND 3.00%+. → Network Programs

EFM (Excessive Fraud Merchant) : Mastercard's fraud-side program, separate from ECM and running alongside it. Four tests have to land in the same month: 1,000+ Mastercard transactions, $50,000+ in fraud claims, a 0.50%+ fraud-to-sales ratio, and 3DS coverage under 50% in regulated markets or 10% elsewhere. The 3DS test is the one you control directly. → Network Programs

EMV (Europay, Mastercard, Visa) : Global standard for chip card payments providing enhanced security over magnetic stripe. → EMV & Contactless

F​

False Positive : A legitimate transaction incorrectly flagged or blocked as fraud.

First-Party Fraud : Fraud committed by the actual customer using their own identity, with intent to defraud. → First-Party Fraud

Friendly Fraud : Legitimate cardholder disputing a valid transaction they actually made. Also called "first-party misuse." → Friendly Fraud

FRR (First Ride Risk) : Mastercard transit program allowing initial ride without prior authorization.

G​

GCMS (Global Clearing Management System) : Mastercard's transaction clearing system.

GMAP (Global Merchant Audit Program) : Mastercard's merchant audit program, suspended since 15 October 2020. Its 3%, 5% and 8% tiers get quoted as live thresholds. They aren't, and they were never enforced at those levels. Reason code 4849 belongs to QMAP, not GMAP. A relaunch dated 1 April 2027 has been reported and Mastercard hasn't confirmed it. → Mastercard GMAP

I​

Identity Check : Mastercard's brand name for 3D Secure authentication. → 3D Secure

Interchange : Fee paid by merchant's acquiring bank to cardholder's issuing bank for each transaction. Blends to about 0.89% + $0.158 card-present and 1.36% + $0.152 online on a normal US card mix; individual cards run 0.05% + $0.21 to 3.15% + $0.10. → Interchange

IPM (Integrated Product Messages) : Mastercard's clearing message format.

Issuer : The bank that issues cards to consumers and is responsible for cardholder accounts. → Payment Ecosystem

K​

KBA (Knowledge-Based Authentication) : Identity verification using questions only the user should know.

KYC (Know Your Customer) : Process of verifying customer identity, required by regulations. → AML Basics

L​

Liability Shift : Transfer of fraud loss responsibility between parties based on EMV/3DS compliance. When implemented correctly, liability shifts from merchant to issuer. → 3D Secure | EMV Liability

M​

Mastercom : Mastercard's online dispute management platform.

MCC (Merchant Category Code) : Four-digit code classifying merchants by business type. → MCC Codes

MERP (Merchant Elevated Risk Program) : Visa's program for merchants showing unusual activity, AP Region only, effective 9 April 2026. The thresholds live in the Merchant Elevated Risk Program Guide, which goes to acquirers and not to you. Visa can order your acquirer, or you, to deploy remediation tools. The assessments land on the acquirer: USD 25,000 on a first identification and USD 50,000 on a repeat with the same acquirer, then monthly charges, then risk reduction requirements. Source: Visa Core Rules and Visa Product and Service Rules, 18 April 2026, sections 10.4.4.4 and 12.5.8.1.

MFA (Multi-Factor Authentication) : Authentication requiring multiple verification methods.

MIT (Merchant Initiated Transaction) : A transaction initiated by the merchant without cardholder interaction, such as recurring billing. → Subscriptions & Recurring

Metro 2 : Standard format for reporting credit information to bureaus.

N​

No-Show : Hotel/travel charge when customer makes reservation but doesn't arrive and doesn't cancel.

P​

PAN (Primary Account Number) : Full card number, typically 16 digits.

PCI DSS (Payment Card Industry Data Security Standard) : Security standard for handling cardholder data. → PCI-DSS Compliance

PDS (Private Data Subelements) : Mastercard's extended data fields in ISO messages.

PII (Personally Identifiable Information) : Data that can identify a specific individual.

POI (Point of Interaction) : Location/device where card transaction occurs (terminal, website, etc.).

Pre-Arbitration : Dispute stage after representment where issuer challenges merchant's response before arbitration. → Chargeback Lifecycle

Q​

QMAP (Questionable Merchant Audit Program) : Mastercard's audit program for merchants with fraud patterns it wants to look at directly. It isn't a ratio program. Reason code 4849 is QMAP's, not GMAP's, and a MATCH listing under QMAP goes in as code 08. → Network Programs

R​

RDR (Rapid Dispute Resolution) : Visa's program allowing pre-dispute resolution before chargebacks file. → Chargeback Alerts

Reason Code : Code indicating the specific category/reason for a chargeback. → Reason Codes Reference

Representment : Merchant's response to a chargeback with evidence disputing the claim. Also called "second presentment" (Mastercard). → Representment Workflow

ROC (Record of Charge) : American Express's term for transaction record.

S​

SafeKey : American Express's brand name for 3D Secure authentication. → 3D Secure

SCA (Strong Customer Authentication) : EU requirement under PSD2 for multi-factor authentication on certain transactions. → 3D Secure

Second Presentment : Mastercard's term for representment - merchant's response to a chargeback.

SLI (Security Level Indicator) : Mastercard's indicator of authentication level. Values: 1 = first-party authenticated, 2 = delegated authentication.

SMMP (Scam Merchant Monitoring Program) : Mastercard's scam programme for card-not-present merchants, enforceable since 24 July 2026. It isn't part of ACMP and it isn't a ratio program. It obliges your acquirer to open an investigation within 72 hours of a trigger, and the only outcome is that Mastercard and Maestro acceptance stops. No fines, no ladder, no grace period. Refunds and chargebacks get added together, so refunding to protect your chargeback ratio feeds this one. → Scam Merchant Monitoring

Stand-In : Network-level authorization when issuer is unavailable.

Synthetic Identity : Fabricated identity mixing real and fake data. It belongs to no real person. → Synthetic Identity Fraud

T​

Third-Party Fraud : Fraud committed using stolen identity of an innocent victim. → Third-Party Fraud

TLID (Transaction Link Identifier) : Mastercard's identifier linking related transactions.

3DS (3D Secure) : Authentication protocol for card-not-present transactions providing liability shift. → 3D Secure Guide

U​

UCAF (Universal Cardholder Authentication Field) : Mastercard's authentication data field containing AAV and authentication details.

V​

VAU (Visa Account Updater) : Visa's service that automatically updates stored card credentials.

VCR (Visa Claims Resolution) : Visa's dispute resolution system including Allocation and Collaboration workflows. → Chargeback Lifecycle

VDMP (Visa Dispute Monitoring Program) : Visa's program monitoring merchants exceeding dispute thresholds. Now consolidated into VAMP. → Network Programs

Velocity : Rate of transactions or activities over time. Velocity rules detect unusual transaction patterns. → Velocity Rules

VFMP (Visa Fraud Monitoring Program) : Visa's program monitoring merchants exceeding fraud thresholds. Now consolidated into VAMP. The name survives only on dispute condition 10.5, which is still live. → Network Programs

VFMP-3DS (Visa Fraud Monitoring Program for 3-D Secure) : A separate US-only track that measured fraud on your Visa Secure traffic alone. Being in it cost you the 3DS liability shift, which is the whole reason you turned 3DS on. Retired 1 April 2025, folded into VAMP along with VDMP, VFMP and DGMFM. Fraud on authenticated transactions now just lands in the one VAMP ratio. Reported thresholds while it ran were 0.5% and $5,000 for early warning, 0.75% and $7,500 for the standard program. Those come from vendor write-ups, not from Visa, and sources disagree on whether fines ever applied. If a vendor quotes VFMP-3DS at you today, they're selling against a program that closed over a year ago. → Network Programs

Visa Secure : Visa's brand name for 3D Secure authentication. → 3D Secure

VROL : Visa Resolve Online - Visa's dispute management platform.

X​

X-Code : Network authorization when issuer declines but network approves based on risk assessment.

See Also​

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