Regulatory
Billing Descriptor
Definition
Billing Descriptor the merchant name and information appearing on cardholder statements. Clear, recognizable descriptors reduce 'I don't recognize this charge' chargebacks. Typically limited to 22-25 characters. Can include dynamic elements for clarity. Some PSPs allow 'soft descriptors' that differ from the merchant's legal name. Poor descriptors are a leading cause of friendly fraud.
Related Terms
Friendly Fraud
Chargebacks filed by legitimate customers who received goods or services but dispute the charge anyway. Also called first-party fraud or chargeback fraud. Common scenarios include buyer's remorse, family members making unauthorized purchases, or customers not recognizing billing descriptors. Represents 60-80% of chargebacks in some verticals. Prevention requires clear communication, recognizable descriptors, and good customer service.
Chargeback
A transaction reversal initiated by the cardholder's bank after a dispute. Chargebacks return funds to the cardholder and impose fees on the merchant (typically $25-100). Common reasons include fraud, non-delivery, product issues, and billing disputes. Excessive chargebacks trigger monitoring programs and can result in account termination. Prevention is always cheaper than fighting chargebacks.
Need help navigating payment terminology?
We speak fluent payments. Let us translate for your business.
Talk to Us