Billing descriptor is the way a company's name appears on a credit card statement and is set up when the
merchant account
A merchant account is a type of bank account that allows businesses to accept payments in multiple ways, typically debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for t ...
is established. It is used by the credit card customer to identify who a payment was made to on a particular transaction.
The name used is typically the
trading name
A trade name, trading name, or business name, is a pseudonym used by companies that do not operate under their registered company name. The term for this type of alternative name is a "fictitious" business name. Registering the fictitious name w ...
of the business rather than the legal name so that it can be easily recognised by the customer. The billing descriptor may also be made up of a soft or dynamic descriptor that includes the name of the service provided, this is often used by large companies that provide many services and where the brand of the service is more familiar than the company name.
Selecting a clear billing descriptor is important for a merchant to avoid a
chargeback
A chargeback is a return of money to a payer of a transaction, especially a credit card transaction. Most commonly the payer is a consumer. The chargeback reverses a money transfer from the consumer's bank account, line of credit, or credit car ...
when the credit card customer does not recognise the name on the transaction.
Static descriptors
If the company offers a single service or product, this descriptor would be sufficient. (ex. ZXC Services&Products 800-123-4567)
Dynamic descriptors
There are dynamic descriptors as well which allow the description field in the cardholder's statement to be modified to include more detailed information of the transaction. Often the merchant's name is shortened to three letters, followed by an asterisk (*), followed by a short description of the service or product that the business provides. This field typically has a limit of 25 characters including the phone number (ex. ZXC* Site Access 800-123-4567)
See also
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Merchant services
Merchant services is a broad category of financial services intended for use by businesses. In its most specific use, it usually refers to merchant processing services that enables a business to accept a transaction payment through a secure (encr ...
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Credit card terminal
A payment terminal, also known as a point of sale (POS) terminal, credit card terminal, EFTPOS terminal (or by the older term as PDQ terminal which stands for "Process Data Quickly"), is a device which interfaces with payment cards to make electro ...
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Credit card fraud
Credit card fraud is an inclusive term for fraud committed using a payment card, such as a credit card or debit card. The purpose may be to obtain goods or services or to make payment to another account, which is controlled by a criminal. The P ...
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Chargeback insurance
{{More citations needed, date=December 2008Chargeback insurance is an insurance product that protects a merchant who accepts credit cards. The insurance protects the merchant against fraud in a transaction where the use of the credit card was unaut ...
References
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Credit card terminology