Glossary
Stripe & subscription terms, in plain English
130 definitions for the payment, subscription, and automation terms you'll meet running a business on Stripe.
Subscription & SaaS metrics
MRR, ARR, churn, retention, and the numbers founders track.
ACV (Annual Contract Value)ACV is the average annualized revenue a single customer contract is worth, normalizing deals of different lengths to a yearly figure.ARPA (Average Revenue Per Account)ARPA is the average recurring revenue earned per paying account, the go-to per-customer metric for B2B businesses with multi-seat plans.ARPU (Average Revenue Per User)ARPU is the average recurring revenue a business earns per active user in a period, a quick read on monetization and pricing power.ARR (Annual Recurring Revenue)ARR is the predictable subscription revenue a business earns over a year, usually calculated as MRR multiplied by 12.BillingsBillings are the amounts you invoice customers in a period — a leading indicator of cash inflow, distinct from bookings and revenue.BookingsBookings are the total contracted value of deals customers have committed to, recognized at signing regardless of billing or delivery.Burn RateBurn rate is how fast a company spends its cash reserves each month; net burn nets spending against revenue and drives runway.CAC (Customer Acquisition Cost)CAC is the fully loaded cost of winning one new customer, the total sales and marketing spend divided by customers acquired.CAC Payback PeriodThe CAC payback period is how many months of margin a customer must pay before they cover the cost of acquiring them.ChurnChurn is the rate at which customers or recurring revenue are lost over a period; it's the counterweight to growth.Cohort AnalysisCohort analysis groups customers by when they joined and tracks each group over time to reveal true retention and revenue patterns.Committed MRR (CMRR)Committed MRR is current MRR adjusted for signed changes not yet live — bookings coming on, plus known cancellations coming off.Contraction RevenueContraction revenue is recurring revenue lost when existing customers downgrade, drop seats, or reduce usage without fully cancelling.Deferred RevenueDeferred revenue is money collected for services not yet delivered — a liability that converts to recognized revenue as you fulfill the contract.Expansion RevenueExpansion revenue is additional recurring revenue from existing customers who upgrade, add seats, or grow usage, without any new logos.Gross Revenue Retention (GRR)GRR measures how much recurring revenue a cohort keeps after churn and downgrades, ignoring expansion, so it never exceeds 100%.LTV (Customer Lifetime Value)LTV is the total recurring revenue or gross profit a business expects from a customer over the whole relationship, before they churn.LTV:CAC RatioThe LTV:CAC ratio compares customer lifetime value to acquisition cost, the standard test of whether a growth model is economically sound.MRR (Monthly Recurring Revenue)MRR is the total predictable subscription revenue a business earns each month, normalized to a monthly figure.MRR MovementsMRR movements break each month's change in recurring revenue into new, expansion, contraction, churn, and reactivation components.Net Revenue Retention (NRR)NRR measures how recurring revenue from an existing cohort changes over time, counting expansion, contraction, and churn but no new customers.Reactivation (Win-back)Reactivation is recurring revenue recovered from previously churned customers who return, forming its own line in MRR movement.Recognized RevenueRecognized revenue is income earned by delivering a service, recorded on the P&L over the service period under GAAP — not when cash arrives.Rule of 40The Rule of 40 says a healthy SaaS company's revenue growth rate plus its profit margin should add up to at least 40%.RunwayRunway is how many months a company can keep operating at its current net burn before cash runs out, given its cash on hand.SaaS Quick RatioThe SaaS Quick Ratio compares gained recurring revenue (new + expansion) to lost revenue (churn + contraction) to gauge growth efficiency.TCV (Total Contract Value)TCV is the total revenue a customer contract is worth over its entire term, including recurring charges plus any one-time fees.
Payments
How a card payment moves from checkout to your bank.
3D Secure (3DS)3D Secure is an authentication step that verifies a cardholder during online payments and can shift fraud-chargeback liability to the issuer.ACH (Direct Debit)ACH Direct Debit pulls funds directly from a US bank account for one-off or recurring payments, at far lower fees than cards but with slower settlement.AcquirerAn acquirer is the bank that holds a merchant's account, receives card payments on their behalf, and settles the funds to them.AuthorizationAuthorization is the issuer's approval to charge a card for an amount, reserving the funds before the payment is captured.Authorization HoldAn authorization hold reserves funds on a customer's card without capturing them, appearing as a pending charge until captured or released.AVS (Address Verification Service)AVS checks the billing address a buyer enters against the address on file at the card's issuing bank, giving merchants a fraud signal on online payments.Balance (Available vs Pending)Your processor balance splits into pending funds still settling and available funds ready to be paid out, refunded, or transferred.Balance TransactionA balance transaction is the ledger entry recording each movement in your processor balance, itemizing gross amount, fee, and net.BIN (Bank Identification Number)The BIN is the first 6-8 digits of a card number that identify the issuing bank, card network, and card type before a payment is authorized.CaptureCapture is the step that finalizes an authorized payment, telling the bank to actually move the reserved funds to you.Card NetworkA card network is the rail — Visa, Mastercard, Amex — that routes authorization and settlement between the issuing and acquiring banks.ChargeA charge is a single attempt to move money from a customer's payment method to your Stripe account for a specific amount.CVC / CVV (Card Verification Value)The CVC/CVV is the 3-4 digit security code on a card that proves the buyer physically has the card, helping block fraud on online payments.Declined PaymentA declined payment is a card transaction the issuing bank or processor refuses, ending the authorization before any money moves.Interchange FeeAn interchange fee is the charge set by card networks and paid to the cardholder's issuing bank on every card transaction.Issuer (Issuing Bank)An issuer is the bank that gives a customer their card, approves or declines each payment, and pulls the money from their account.Merchant of Record (MoR)A Merchant of Record is the legal seller in a transaction — it processes the payment, owes the tax, and carries chargeback liability.Net VolumeNet volume is your gross payment volume minus fees, refunds, and disputes — the money that actually settles into your balance.Payment GatewayA payment gateway is the layer that securely captures card details at checkout and passes them into the payment network for authorization.Payment LinkA Payment Link is a shareable Stripe-hosted URL that collects a one-time or recurring payment with no code and no website required.Payment MethodA payment method is how a customer pays — a card, bank debit, or wallet — represented in Stripe as a reusable, tokenized object.Payment ProcessorA payment processor is the service that communicates with the banks to move money from the customer's card to the merchant's account.PaymentIntentA PaymentIntent is the Stripe object that tracks a payment from start to finish, handling authentication and retries along the way.PayoutA payout is a transfer of your available account balance to your bank account; payout.paid fires when the funds actually reach the bank.PCI DSSPCI DSS is the security standard every business handling card data must follow to protect cardholder information from theft.Processing FeeA processing fee is the per-transaction charge a payment processor takes to accept a card payment, usually a percentage plus a fixed amount.PSD2PSD2 is the EU payments directive that mandates Strong Customer Authentication and opens bank data access to licensed third parties.SEPA Direct DebitSEPA Direct Debit pulls euros directly from a customer's European bank account under a signed mandate, a low-fee option for recurring payments in the eurozone.SettlementSettlement is the process by which a captured payment moves from pending to available funds in your account, ready to be paid out.SetupIntentA SetupIntent saves and authenticates a payment method for future charges without collecting a payment right now.Strong Customer Authentication (SCA)SCA is a European rule requiring two-factor authentication on many online payments to prove the payer is who they claim to be.TokenizationTokenization replaces a card number with a random token, so a business can charge a card without ever storing the real number.
Billing & subscriptions
Invoices, prices, proration, trials, and usage-based billing.
Billing CycleA billing cycle is the recurring interval on which a subscription is invoiced and charged, set by its start anchor and interval length.CouponA coupon is a reusable discount rule in Stripe that reduces an invoice by a percentage or fixed amount for a set duration.DiscountA discount is a coupon applied to a customer, subscription, or invoice that reduces the amount owed for a fixed period or forever.EntitlementsEntitlements are the features and limits a customer is granted by their plan, linking what they pay for to what they can actually use.InvoiceAn invoice is an itemized statement of what a customer owes for a billing period; in Stripe it drives collection and fires invoice.paid when settled.Invoice ItemAn invoice item is a pending charge or credit that gets added to a customer's next invoice, used for one-off fees, usage, and prorations.Price (Stripe)A Stripe Price defines how much a Product costs and how often it's charged, including one-time, recurring, tiered, and usage-based models.Product (Stripe)A Stripe Product represents a good or service you sell; its Prices define how much and how often customers are charged for it.Promotion CodeA promotion code is the customer-facing string that maps to a Stripe coupon, letting customers redeem a discount at checkout.ProrationProration is the partial charge or credit applied when a subscription changes mid-cycle, so a customer only pays for what they actually used.Quote (Stripe)A Stripe Quote is a formal, itemized price proposal you send a customer that converts into an invoice or subscription once accepted.Seat-Based PricingSeat-based pricing charges a recurring fee per user or seat, so a customer's bill scales with the size of their team.Stripe TaxStripe Tax automatically calculates and collects sales tax, VAT, and GST on Stripe payments and monitors where you may owe tax.SubscriptionA subscription is a recurring billing arrangement that charges a customer on a set cycle for continued access to a product or service.Subscription ScheduleA subscription schedule defines a sequence of billing phases so a subscription changes plans, prices, or quantities automatically over time.Tiered PricingTiered pricing sets different per-unit rates across usage or quantity bands, so the price a customer pays changes as they buy more.Trial PeriodA trial period is a stretch at the start of a subscription during which the customer has full access but is not yet charged.Usage-Based BillingUsage-based billing charges customers for how much they actually consume in a period rather than a fixed recurring fee.
Refunds, dunning & recovery
Refunds, failed-payment recovery, and involuntary churn.
Credit NoteA credit note reduces the amount owed on a finalized invoice, recording a refund, an account credit, or an out-of-band adjustment.DunningDunning is the process of recovering failed subscription payments through automated retries and customer reminders before the subscription lapses.Grace PeriodA grace period is the window after a failed payment during which a subscription stays active while retries and reminders attempt to recover the charge.Involuntary ChurnInvoluntary churn is subscription loss caused by failed payments rather than a customer's decision to cancel, and it's often highly recoverable.Partial RefundA partial refund returns only part of a payment to the customer, leaving the remaining amount of the original charge intact and unrefunded.RefundA refund returns funds from a completed payment back to the customer's original payment method, reversing a charge in whole or in part.Smart RetriesSmart Retries is a Stripe Billing feature that uses machine learning to reattempt failed subscription payments at the times most likely to succeed.Voluntary ChurnVoluntary churn is subscription loss caused by a customer actively choosing to cancel, driven by fit, value, or price rather than a payment failure.
Disputes, risk & fraud
Chargebacks, disputes, and the tools that fight fraud.
Card TestingCard testing is fraud where attackers run many small charges against stolen card numbers to find which ones still work before using them.ChargebackA chargeback is a forced reversal of a card payment initiated by the cardholder's bank, pulling the funds back from the merchant and often adding a fee.DisputeA dispute is Stripe's object for a chargeback — a cardholder's bank reversing a payment; it opens with a deadline the merchant must meet to fight it.Dispute EvidenceDispute evidence is the documentation a merchant submits to challenge a chargeback — proof the charge was valid, meeting the issuer's deadline and rules.Dispute FeeA dispute fee is the charge a payment processor applies when a customer files a chargeback, on top of the reversed transaction amount.Early Fraud Warning (EFW)An Early Fraud Warning is a card-issuer report flagging a payment as likely fraudulent, giving you a chance to act before a dispute lands.Friendly FraudFriendly fraud is when a real customer disputes a legitimate charge they actually made, forcing a chargeback the merchant must contest.Liability ShiftLiability shift moves financial responsibility for a fraudulent chargeback from the merchant to the card issuer after successful 3D Secure authentication.RepresentmentRepresentment is the stage where a merchant re-presents a disputed charge to the issuer with evidence, asking the bank to reverse the chargeback in their favor.Retrieval RequestA retrieval request is a card issuer's request for transaction documentation that can precede a chargeback but does not move any money.Risk ScoreA risk score is a numerical estimate of how likely a payment is fraudulent, used to decide whether to allow, review, or block it.Stripe RadarStripe Radar is Stripe's machine-learning fraud tool that scores each payment for risk and can block or flag suspicious transactions.
Connect & platforms
Stripe Connect terms for platforms and marketplaces.
Application FeeAn application fee is the cut a Stripe Connect platform takes from a payment processed by one of its connected accounts.Connected AccountA connected account is a seller or user account onboarded under a Stripe Connect platform, with its own balance, payouts, and payment activity.On-Behalf-OfOn-behalf-of makes a connected account the settlement merchant on a charge, so the payment reflects the seller's business, statement, and region.Payout ScheduleA payout schedule controls how often Stripe automatically moves your available balance to your bank — daily, weekly, monthly, or manual.Platform AccountThe platform account is the primary Stripe account that owns a Connect integration, onboards connected accounts, and collects application fees.Stripe ConnectStripe Connect is Stripe's product for platforms and marketplaces to onboard sellers, route payments, and take a fee on each transaction.Top-upA top-up adds funds from your own bank account to your Stripe platform balance so you can pay out connected accounts or cover refunds.Transfer (Stripe)A transfer moves funds from a Stripe Connect platform's balance to a connected account, separating the platform's cut from the seller's share.
API, webhooks & integration
Events, webhooks, idempotency, and API basics.
API KeyAn API key is the credential your code uses to authenticate with Stripe; keys come in publishable, secret, and restricted types across test and live mode.Event (Stripe)A Stripe Event is an immutable record of something that happened in your account, delivered to webhooks and queryable through the Events API.Expandable ObjectsExpandable objects let a Stripe API request inline a related object in the response instead of returning only its ID, saving extra round trips.Idempotency KeyAn idempotency key is a unique value you attach to a POST request so retries don't create duplicate charges, refunds, or other objects.Live ModeLive mode is Stripe's production environment where real cards are charged and real money moves, using live keys fully separated from test mode.OAuthOAuth is an open standard that lets one app access another on a user's behalf using scoped, revocable tokens instead of sharing passwords or keys.Rate LimitA rate limit caps how many API requests an app may send in a window, returning a 429 error and asking you to retry once traffic falls.Test ModeTest mode is Stripe's fully separate sandbox where you simulate payments with test cards and keys, so no real money ever moves.WebhookA webhook is an automatic HTTP request Stripe sends to your server when something happens, so you learn about events without polling the API.Webhook EndpointA webhook endpoint is the URL on your server that Stripe sends event notifications to, configured with its own secret and list of subscribed events.Webhook Signature VerificationSignature verification uses the Stripe-Signature header and your endpoint's signing secret to prove a webhook really came from Stripe and wasn't tampered with.
Automation tools
Zapier, Make, and Slack automation vocabulary.
@channel and @here (Slack)@channel and @here are Slack mentions that notify a channel's members at once — @channel alerts everyone, @here only active members.Action (Automation)An action is a step an automation performs after its trigger fires, such as posting a message or creating a record; each successful action bills as one task.Filter (Zapier)A filter is a Zap step that lets the workflow continue only when a condition is met, stopping runs that don't qualify without consuming a task.Formatter (Zapier)Formatter is a built-in Zapier tool that reshapes data between steps — dates, text, numbers, and currency — without consuming a task.Incoming Webhook (Slack)A Slack incoming webhook is a unique URL that lets an external app post messages into a specific Slack channel by sending a JSON payload.Module (Make)A module is a single step in a Make scenario — one app action that processes a bundle of data and consumes one operation each time it runs.Multi-Step ZapA Multi-Step Zap is a Zapier workflow with one trigger followed by two or more actions, chaining several apps together in sequence.Operation (Make)In Make, an operation is a single module run that processes one bundle of data; operations are the billable unit that meters scenario usage.Path (Zapier)A path adds branching logic to a Zap, routing each run down different sets of actions based on conditions so one trigger can handle many outcomes.Scenario (Make)A scenario is Make's term for an automated workflow — a chain of modules that runs on a trigger to move and transform data between apps.Slack Workflow BuilderSlack Workflow Builder is Slack's built-in no-code tool for automating tasks inside Slack, combining triggers and steps without writing any code.Task (Zapier)A task is Zapier's billing unit — one successful action step equals one task, so a workflow's cost scales with how many actions it runs.Trigger (Automation)A trigger is the event that starts an automation; it can poll an app on an interval or fire instantly from a webhook when new data appears.ZapA Zap is an automated workflow in Zapier that starts with a trigger event and runs one or more actions across connected apps.