Ecommerce & Payments Glossary
Every term you need to know about modern ecommerce, payment processing, and subscription billing — explained in plain language.
A
A/B Testing (Checkout)
A method of comparing two versions of a checkout page, upsell offer, or funnel step to determine which one performs better. In ecommerce, A/B testing is used to optimize conversion rates, average order value, and customer experience by showing different variations to different segments of traffic.
B
BIN (Bank Identification Number)
The first 6-8 digits of a credit or debit card number that identify the issuing bank and card network. BIN data is used in payment routing to determine the card type, issuing country, and optimal processing path for each transaction.
C
Chargeback
A forced reversal of a payment transaction initiated by the cardholder's bank. Chargebacks can result from fraud, customer disputes, or unauthorized transactions. High chargeback rates (above 1%) can lead to account termination by payment processors.
Checkout Optimization
The process of improving the checkout experience to maximize the percentage of customers who complete their purchase. This includes reducing form fields, adding express checkout options (Apple Pay, Google Pay), optimizing page speed, and testing different layouts.
Tagada vs CheckoutChamp →Churn Rate
The percentage of subscribers who cancel their subscription within a given period. Churn can be voluntary (customer cancels) or involuntary (payment fails). Reducing churn is critical for subscription businesses — even a 1% reduction in monthly churn can significantly impact annual revenue.
Cross-sell
Offering a complementary or related product to a customer during or after their purchase. Unlike upsells (which upgrade the current product), cross-sells introduce entirely new products. Example: offering a phone case to someone buying a phone.
D
Decline Recovery
The process of recovering revenue from failed payment transactions. Techniques include intelligent retry logic (retrying at optimal times), card updater services, and dunning communications. Effective decline recovery can recapture 20-40% of failed transactions.
Dunning
The automated process of communicating with customers whose subscription payments have failed. A dunning sequence typically involves a series of emails, SMS messages, and in-app notifications encouraging the customer to update their payment method. Smart dunning systems tailor messages based on the specific failure reason.
How to reduce payment failures →E
Express Checkout
A streamlined checkout experience that uses pre-stored payment and shipping information to allow one-click or one-tap purchases. Includes digital wallets like Apple Pay, Google Pay, and Shop Pay. Express checkout can increase mobile conversion rates by 30-50%.
F
Funnel
A multi-step sales process that guides potential customers from awareness to purchase. In ecommerce, a funnel typically includes a landing page, product page, checkout page, upsell offers, and thank-you page. Each step is optimized to maximize the percentage of visitors who proceed to the next step.
Tagada vs Funnelish →G
Gateway Pool
A collection of multiple payment gateway accounts (MIDs) configured to process transactions for the same merchant. Gateway pools enable load balancing, failover protection, and chargeback ratio distribution. Payment orchestration platforms manage gateway pools automatically.
I
Involuntary Churn
Subscriber loss caused by failed payment transactions rather than active cancellation. Involuntary churn typically accounts for 20-40% of total churn and is largely preventable with proper dunning sequences, card updater services, and intelligent retry logic.
L
LTV (Lifetime Value)
The total revenue a business can expect from a single customer over the duration of their relationship. LTV is critical for determining customer acquisition cost budgets, identifying high-value segments, and optimizing payment routing decisions (high-LTV customers may warrant premium processing paths).
M
MID (Merchant ID)
A unique identifier assigned to a merchant by a payment processor or acquiring bank. Each MID has its own chargeback ratio, processing limits, and fee structure. Large merchants often use multiple MIDs to distribute risk and optimize processing costs.
O
Order Bump
A small, low-cost add-on product offered directly on the checkout page with a simple checkbox. Order bumps typically have 10-25% take rates because they require no additional payment information. Unlike upsells, order bumps are added to the original order rather than creating a new transaction.
P
Payment Gateway
A technology that captures and transfers payment data from the customer to the acquiring bank. Payment gateways handle the technical communication between your checkout and the payment network. Examples include Stripe, Adyen, and NMI.
Payment orchestration vs gateway →Payment Orchestration
A layer that sits above individual payment gateways and intelligently routes each transaction to the optimal processor. Payment orchestration considers factors like card type, geography, processor performance, fees, and approval rates to maximize successful transactions and minimize costs. It also provides failover — if one processor declines, the transaction is automatically retried on another.
Payment orchestration explained →Payment Processor
The company that handles the actual movement of funds between the customer's bank and the merchant's bank. Payment processors communicate with card networks (Visa, Mastercard) and issuing banks to authorize, capture, and settle transactions. Examples include Stripe, Adyen, NMI, and Airwallex.
Payment Routing
The process of directing a payment transaction to a specific processor or MID based on predefined rules or intelligent algorithms. Smart routing considers transaction amount, card BIN data, customer geography, processor performance, and fee structures to optimize approval rates and reduce costs.
Post-Purchase Upsell
An upsell offer presented after the initial purchase is complete but before the thank-you page. Post-purchase upsells use one-click purchase (no re-entering payment info) and typically see 10-20% conversion rates because the customer is already in a buying mindset.
R
Recurring Billing
The automatic charging of a customer at regular intervals (weekly, monthly, annually) for ongoing access to a product or service. Recurring billing requires tokenized card storage, automated retry logic for failed payments, and compliance with card network rules for subscription merchants.
Retry Logic
The automated system that retries failed payment transactions at strategic intervals. Intelligent retry logic considers the decline reason code, time of day, day of week, and processor availability to maximize recovery rates. Naive retry (immediate retry on the same processor) is far less effective than smart retry strategies.
Revenue Orchestration
A holistic approach to maximizing revenue across the entire customer lifecycle. Revenue orchestration combines checkout optimization, payment routing, subscription management, upsell sequencing, and churn prevention into a unified system that optimizes for total customer value rather than individual transaction metrics.
S
Server-Side Tracking
A method of sending conversion data directly from your server to advertising platforms (Meta, Google, TikTok) rather than relying on browser-based pixels. Server-side tracking is more reliable because it bypasses ad blockers and iOS privacy restrictions that can block 30-40% of client-side tracking events.
Smart Routing
An intelligent payment routing system that uses real-time data and machine learning to determine the optimal processor for each transaction. Smart routing considers approval rates, processing fees, processor health, card type, geography, and historical performance to maximize the probability of successful payment.
Subscription Management
The end-to-end management of subscription lifecycles including enrollment, billing cycles, upgrades/downgrades, pauses, cancellations, and reactivation. Comprehensive subscription management platforms also include dunning, churn analytics, and revenue forecasting.
T
Tokenization
The process of replacing sensitive card data with a non-sensitive token that can be stored and used for future transactions. Tokenization enables one-click purchases, subscription billing, and reduced PCI compliance scope. The actual card data is stored securely by the payment processor.
U
Upsell
An offer to purchase a higher-value version of a product or an additional product, typically presented during or immediately after the initial purchase. In ecommerce funnels, upsells are a primary revenue driver — effective upsell sequences can increase average order value by 30-50%.
Tagada vs ClickFunnels →Explore More
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