Glossary

The high-risk payments glossary

The jargon of high-risk processing, translated into plain English. Every term links to the guides and industries where it matters most.

Peptides & high-risk terms

The vocabulary that decides whether a peptide, supplement, or other high-scrutiny business gets approved — and stays online.

Certificate of Analysis (COA)

A lab document verifying a product’s identity, purity, and composition — often requested during high-risk underwriting.

Compliant Claims

Marketing language that stays within regulatory limits — a decisive factor in whether a high-risk account is approved and kept.

Good Manufacturing Practice (GMP)

A quality-control standard for how products are produced and tested, often referenced in high-risk underwriting.

High-Risk Merchant Account

A merchant account underwritten for businesses card networks consider higher-risk, such as peptides, CBD, or nicotine.

LegitScript Certification

A third-party certification some card networks and processors require for certain regulated products.

MATCH List (TMF)

A card-network database of terminated merchants. Being listed makes new accounts harder — but not impossible — to obtain.

Multi-Bank Redundancy

Placing a merchant’s volume across more than one acquiring bank so a single shutdown never stops revenue.

Nutraceutical

A food-derived product marketed for health benefits, such as a supplement — a recurring-billing-heavy high-risk category.

Research Peptides

Short chains of amino acids sold for laboratory and research use, a specialized high-scrutiny category for payment processing.

Research-Use-Only (RUO)

A labeling and positioning standard indicating a product is sold strictly for laboratory research, not human or clinical use.

Reserve

A portion of a merchant’s funds an acquiring bank withholds temporarily to cover potential chargebacks or refunds.

Underwriting

The review an acquiring bank performs to decide whether — and on what terms — to approve a merchant account.

Industry & vertical terms

Category-specific vocabulary for the other high-risk industries we place — from CBD, THCA, and kratom to firearms, forex, iGaming, and offshore.

2018 Farm Bill Compliance

The federal framework that legalized hemp-derived products under 0.3% Delta-9 THC — the basis for CBD, hemp, and THCA processing.

Age Verification

Confirming a customer meets a legal age requirement at checkout — required for firearms, nicotine, and other restricted goods.

Credit Repair Organizations Act (CROA)

The federal law governing credit-repair businesses, including contract and no-advance-fee rules underwriters check.

Federal Firearms License (FFL)

The federal license required to deal in firearms — a prerequisite for a compliant firearms merchant account.

Forex Merchant Account

A high-risk account for currency and CFD trading platforms, where regulatory status and disclosures drive underwriting.

Hemp / THCA Certificate of Analysis

Lab testing that documents cannabinoid content and the federal ≤0.3% Delta-9 THC threshold for hemp-derived products.

High-Ticket Processing

Accepting large individual transactions, which raises average-ticket scrutiny, reserves, and dispute exposure.

iGaming Merchant Account

A merchant account built for online gaming, betting, and sweepstakes, where licensing and geo-controls drive approval.

Kratom Compliance

The patchwork of state and local rules on kratom sales that determines where a kratom merchant can process.

Offshore Merchant Account

A merchant account with an acquiring bank outside the merchant’s home country, used to reach markets domestic banks decline.

PACT Act

A U.S. law governing the sale and shipment of tobacco and vape products, central to nicotine merchant compliance.

Subscription / Continuity Model

A recurring-billing sales model common to supplements and coaching that draws heightened chargeback scrutiny.

Terminated Merchant File (TMF / MATCH)

A card-network blacklist of merchants terminated for cause — placement makes new accounts hard to obtain.

Visa Integrity Risk Program (VIRP)

A Visa program governing high-integrity-risk categories such as adult content, with registration and monitoring requirements.

General payments glossary

Core processing, underwriting, and compliance terms every merchant runs into — from interchange and settlement to chargebacks and PCI.

3-D Secure (3DS)

An authentication layer that asks the cardholder to verify identity with their bank during checkout.

ACH / eCheck

Electronic bank-to-bank transfers processed through the Automated Clearing House network.

Acquiring Bank

The bank that holds a merchant account and settles card transactions into the merchant’s business bank account.

Address Verification Service (AVS)

A check comparing the billing address entered at checkout with the one on file at the cardholder’s bank.

Anti-Money Laundering (AML)

The laws, checks, and monitoring designed to stop illicit funds from moving through the payment system.

Authorization

The step where a customer’s bank confirms a card is valid and places a hold on the amount.

Authorization Hold

The temporary reduction in a cardholder’s available balance created by an authorization, before capture.

Average Ticket

The typical dollar amount of a single transaction — total volume divided by transaction count.

Batch

A group of captured transactions submitted together for settlement, typically once per day.

Beneficial Owner

An individual who ultimately owns or controls a meaningful share of a business, disclosed during onboarding.

Billing Descriptor

The text that appears on a customer’s card statement for a purchase — a quiet driver of disputes.

Buy Now, Pay Later (BNPL)

A checkout option that splits a purchase into installments, paying the merchant up front.

Capture

The step that converts an approved authorization into an actual charge to be settled and funded.

Card-Not-Present (CNP)

A transaction where the card is not physically presented — online, over the phone, or in-app.

Card-on-File

Securely storing a customer’s tokenized payment credentials for future or one-click purchases.

Chargeback

A forced reversal of a card transaction initiated by the cardholder’s bank, often after a dispute or fraud claim.

Chargeback Alert

A near-real-time notification that a cardholder has disputed or is about to dispute a transaction.

Chargeback Monitoring Program

A card-network program placing merchants over dispute thresholds under heightened scrutiny, fees, and remediation.

Chargeback Ratio

The percentage of a merchant’s transactions that end in a chargeback — a key health metric watched by card networks.

CVC / CVV (Card Verification Code)

The short security code printed on a payment card, used to check that the person paying is holding the physical card.

Decline

A transaction the customer’s bank refuses to authorize — either soft (retryable) or hard (permanent).

Digital Wallet

A mobile or online service that stores tokenized payment credentials for fast, secure checkout.

Discount Rate

The percentage a merchant pays on each transaction under a bundled pricing model.

Dual Pricing

A pricing model that displays a cash price and a card price for the same item, letting the customer choose.

Effective Rate

Total processing fees divided by total sales volume — the clearest number for comparing providers.

EIN (Employer Identification Number)

The nine-digit federal tax ID that identifies a US business to the IRS, and the number underwriting matches your application against.

Encryption

Encoding payment data so it is unreadable without the key, protecting it in transit and at rest.

Fraud Ratio

The percentage of transactions flagged as fraudulent, tracked separately from the chargeback ratio.

Friendly Fraud

A chargeback filed by a legitimate customer who actually received the product or service.

IBAN (International Bank Account Number)

A standardized international account number used to route cross-border bank transfers and settlements.

Interchange

The fee set by the card networks and paid to the issuing bank on every transaction.

Know Your Customer (KYC)

Verifying a business and its owners’ identities during onboarding to prevent fraud and money laundering.

Multi-Currency Processing

Accepting payments in more than one currency while settling in your own.

Open Banking

Bank-authorized data and payment access via APIs, enabling account-to-account payments and real-time verification.

Payment Aggregator

A provider that places many merchants under one shared master account for instant onboarding — and quick shutoffs for high-risk.

Payment Facilitator (PayFac)

A company that onboards sub-merchants under its own master account and takes on their risk and compliance.

Payment Gateway

The technology that securely transmits card data from checkout to the processor. It is not the same as a merchant account.

Payment Processor

The company that moves a transaction between the customer’s bank, the card networks, and the merchant’s acquirer.

Payout

The deposit of settled funds into a merchant’s bank account after fees and reserves are applied.

PCI DSS

The Payment Card Industry Data Security Standard — security requirements for any business handling card data.

Processing Fee

The total charge to accept a card payment — interchange, network assessments, and provider markup combined.

Processing Volume

The total dollar amount a merchant processes over a period, usually monthly.

Reason Code

The card-network code that states why a chargeback was filed and what evidence is needed to fight it.

Recurring Billing

Automatically charging a stored payment method on a schedule for subscriptions or installments.

Refund

Returning funds to a customer for a settled transaction — a key dispute-prevention tool when handled well.

Representment

Disputing a chargeback by re-presenting the transaction with evidence that the charge was valid.

Retry Logic (Decline Recovery)

The rules governing when and how a failed payment is retried, especially for subscriptions.

Rolling Reserve

A reserve that holds a set percentage of each period’s sales for a fixed window, then releases on a rolling basis.

Settlement

Moving funds from captured transactions through the networks to the merchant’s account, usually in daily batches.

Surcharging

Adding a clearly disclosed fee to credit-card transactions to offset processing costs, subject to network rules.

Tokenization

Replacing sensitive card data with a non-sensitive token that can be stored and reused safely.

Void

Canceling a transaction before it settles, releasing the authorization hold without a formal refund.

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