Stripe glossary in plain English
130 definitions of the Stripe, billing, and Slack terms you meet when you run a business on Stripe.
Subscription and SaaS metrics
MRR, ARR, churn, and the other numbers founders track.
- ACV (Annual Contract Value)ACV is how much a customer contract is worth per year. It puts deals of different lengths on the same yearly basis.
- ARPA (Average Revenue Per Account)ARPA is the average recurring revenue per paying account. It is the standard per-customer metric for B2B products with multi-seat plans.
- ARPU (Average Revenue Per User)ARPU is the average recurring revenue per active user in a period. It shows how well you turn users into revenue.
- ARR (Annual Recurring Revenue)ARR is the subscription revenue a business expects to earn over a year, usually calculated as MRR times 12.
- BillingsBillings are the amounts you invoice customers in a period. They predict cash coming in and differ from bookings and revenue.
- BookingsBookings are the total value of contracts customers have signed, counted at signing, before any billing or delivery.
- Burn RateBurn rate is how much cash a company spends each month. Net burn subtracts incoming revenue and determines runway.
- CAC (Customer Acquisition Cost)CAC is the full cost of winning one new customer. Divide total sales and marketing spend by the number of new customers.
- CAC Payback PeriodThe CAC payback period is the number of months of gross margin a customer must pay to cover what you spent to acquire them.
- ChurnChurn is the rate at which you lose customers or recurring revenue in a period. It offsets the revenue you add.
- Cohort AnalysisCohort analysis groups customers by when they joined and tracks each group over time. It shows retention and revenue trends that averages hide.
- Committed MRR (CMRR)Committed MRR is current MRR plus signed deals that haven't started, minus cancellations customers have already scheduled.
- Contraction RevenueContraction revenue is recurring revenue lost when existing customers downgrade, drop seats, or use less, without canceling.
- Deferred RevenueDeferred revenue is money collected for service you haven't delivered yet. It is a liability that becomes recognized revenue as you deliver.
- Expansion RevenueExpansion revenue is the extra recurring revenue existing customers bring in when they upgrade, add seats, or use more. New customers don't count.
- Gross Revenue Retention (GRR)GRR measures how much recurring revenue a group of customers keeps after cancellations and downgrades. It ignores upgrades, so it can't exceed 100%.
- LTV (Customer Lifetime Value)LTV is the total revenue or gross profit you expect from a customer over the whole time they stay, from first payment to cancellation.
- LTV:CAC RatioThe LTV:CAC ratio compares what a customer is worth over their lifetime to what it cost to win them. It shows whether growth pays for itself.
- MRR (monthly recurring revenue)MRR is the monthly value of your active subscriptions. Learn how Stripe calculates monthly recurring revenue, what it leaves out, and which events move it.
- MRR movementsMRR movements split each change in recurring revenue into new, expansion, reactivation, contraction and churn, so you can see why your MRR went up or down.
- Net Revenue Retention (NRR)NRR measures how recurring revenue from existing customers changes over a period. It counts upgrades, downgrades, and cancellations, but no new customers.
- Reactivation (Win-back)Reactivation is recurring revenue from customers who churned and then subscribed again. It is its own line in MRR movements.
- Recognized RevenueRecognized revenue is income you have earned by delivering the service. Under GAAP you record it over the service period, not when cash arrives.
- Rule of 40The Rule of 40 says a healthy SaaS company's revenue growth rate plus its profit margin should be at least 40%.
- RunwayRunway is how many months a company can keep operating at its current net burn before its cash runs out.
- SaaS Quick RatioThe SaaS Quick Ratio divides recurring revenue gained (new plus expansion) by recurring revenue lost (churn plus contraction).
- TCV (Total Contract Value)TCV is the total a customer contract is worth over its full term, including recurring charges and one-time fees.
Payments
PaymentIntents, authorization, payouts, and the steps a card payment goes through.
- 3D Secure (3DS)3D Secure is an extra check that confirms the cardholder during an online payment. A successful check can move fraud chargeback liability to the issuer.
- ACH (Direct Debit)ACH Direct Debit pulls money from a US bank account for one-off or recurring payments. It costs far less than cards but takes days to settle.
- AcquirerAn acquirer is the bank that holds a merchant's account, accepts card payments for the merchant, and settles the funds to them.
- AuthorizationAuthorization is the issuer's approval to charge a card for an amount. It reserves the funds until the payment is captured.
- Authorization HoldAn authorization hold reserves funds on a customer's card without collecting them. It shows as a pending charge until the merchant captures it or it is released.
- AVS (Address Verification Service)AVS compares the billing address a buyer enters with the address the card's bank has on file. Merchants use the result as a fraud signal.
- Balance (Available vs Pending)Your Stripe balance has pending funds that are still settling and available funds you can pay out, refund, or transfer.
- Balance TransactionA balance transaction is the ledger entry for each movement in your Stripe balance. It lists the gross amount, the fee, and the net.
- BIN (Bank Identification Number)The BIN is the first 6 to 8 digits of a card number. It identifies the issuing bank, the card network, and the card type.
- CaptureCapture is the step that collects an authorized payment. It tells the bank to move the reserved funds to you.
- Card NetworkA card network, such as Visa, Mastercard, or Amex, routes authorization and settlement messages between the card's bank and the merchant's bank.
- ChargeA charge is one attempt to collect a set amount from a customer's payment method into your Stripe account.
- CVC / CVV (Card Verification Value)The CVC or CVV is the 3 or 4 digit security code on a card. It shows the buyer has the card and helps block fraud on online payments.
- Declined paymentA declined payment is a charge the card issuer or Stripe refuses. Learn hard vs soft declines, where Stripe shows the decline code, and what to do next.
- Interchange FeeAn interchange fee is a fee paid to the cardholder's bank on every card payment. The card networks set the rates.
- Issuer (Issuing Bank)An issuer is the bank that gives a customer their card. It approves or declines each payment and pays it from the customer's account.
- Merchant of Record (MoR)A merchant of record is the legal seller in a transaction. It processes the payment, owes the sales tax, and is liable for chargebacks.
- Net VolumeNet volume is your gross payment volume minus fees, refunds, and disputes. It is the money that actually reaches your Stripe balance.
- Payment GatewayA payment gateway collects card details at checkout, protects them, and sends them on so the payment can be authorized.
- Payment LinkA Payment Link is a shareable URL to a Stripe-hosted checkout page. It takes one-time or recurring payments without a website or code.
- Payment MethodA payment method is how a customer pays, such as a card, bank debit, or wallet. In Stripe it is a reusable PaymentMethod object.
- Payment ProcessorA payment processor works with the card networks and banks to move money from the customer's card to the merchant's account.
- PaymentIntentA Stripe PaymentIntent tracks one payment through every attempt, 3D Secure check, and bank delay until it succeeds or is canceled. See its statuses and events.
- PayoutA Stripe payout moves money from your available Stripe balance to your bank account. Learn how payouts are timed, what payout.paid means, and why payouts fail.
- PCI DSSPCI DSS is the security standard every business that handles card data must follow to keep cardholder data from being stolen.
- Processing FeeA processing fee is what a payment processor charges to accept a card payment, usually a percentage of the amount plus a fixed fee.
- PSD2PSD2 is the EU payments directive that requires Strong Customer Authentication and makes banks give licensed third parties access to accounts.
- SEPA Direct DebitSEPA Direct Debit lets a merchant pull euros from a customer's European bank account under a signed mandate. Fees are low, so it suits recurring payments.
- SettlementSettlement is when a captured payment moves from pending to available funds in your Stripe balance, ready to pay out.
- SetupIntentA SetupIntent saves and authenticates a payment method for future charges without charging the customer now.
- Strong Customer Authentication (SCA)SCA is a European rule that requires two-factor authentication on many online payments to prove the payer is the cardholder.
- TokenizationTokenization replaces a card number with a random token, so a business can charge the card again without storing the real number.
Billing and subscriptions
Invoices, subscription schedules, trials, Stripe Tax, and pricing models.
- Billing CycleA billing cycle is the repeating period on which a subscription is invoiced and charged. Its interval and anchor date set when each period starts.
- CouponA Stripe coupon is a reusable discount rule. It takes a percentage or fixed amount off for a set duration.
- DiscountA discount is a coupon applied to a customer, subscription, or invoice. It lowers the amount owed once, for a set number of months, or forever.
- EntitlementsEntitlements are the features and limits a customer's plan gives them. They connect what a customer pays for to what your app lets them use.
- Invoice ItemAn invoice item is a pending charge or credit that Stripe adds to a customer's next invoice. Use it for one-off fees, credits, and prorations.
- Price (Stripe)A Stripe Price sets how much a Product costs and how often it's charged. It supports one-time, recurring, tiered, and usage-based pricing.
- Product (Stripe)A Stripe Product is something you sell. The Prices attached to it set how much and how often customers pay.
- Promotion CodeA promotion code is the code a customer types at checkout to redeem a discount. In Stripe, each promotion code points to a coupon.
- ProrationProration is the partial charge or credit Stripe applies when a subscription changes mid-cycle, so the customer pays only for the time on each plan.
- Quote (Stripe)A Stripe Quote is an itemized price offer you send a customer. Once accepted, Stripe turns it into an invoice or a subscription.
- Seat-Based PricingSeat-based pricing charges a recurring fee per user, or seat, so a customer's bill grows and shrinks with their team.
- Stripe invoiceA Stripe invoice is the bill behind every subscription charge. Learn its statuses, the events it fires such as invoice.upcoming, and why invoice.paid matters.
- Stripe TaxStripe Tax calculates and collects sales tax, VAT, and GST on Stripe payments. See what's included, how its pricing works, tax codes, and GST on fees.
- SubscriptionA Stripe subscription bills a customer on a repeating schedule until it is canceled. Learn its statuses, the events it fires, and which changes to watch.
- Subscription ScheduleA Stripe subscription schedule changes a subscription's price, quantity, or discount on set dates in up to 10 phases, then releases or cancels it at the end.
- Tiered PricingTiered pricing sets different per-unit rates for different quantity bands, so the unit price changes as a customer buys more.
- Trial PeriodA trial period gives a customer access before the first charge. See how Stripe free trials start and end, the events they fire, and what to watch at conversion.
- Usage-Based BillingUsage-based billing charges customers for how much they use in a period instead of a fixed recurring fee.
Refunds and failed payment recovery
Refunds, dunning, Smart Retries, and involuntary churn.
- Credit NoteA credit note lowers the amount owed on a finalized invoice. It records a refund, a credit to the customer's balance, or an adjustment made outside Stripe.
- DunningDunning is the process of collecting failed subscription payments with retries, reminder emails and a deadline. See how the dunning process works in Stripe.
- Involuntary churnInvoluntary churn is subscription revenue lost to failed payments, not a cancel click. It is the easiest churn to win back if you act while retries run.
- Partial RefundA partial refund returns part of a Stripe payment. Learn how to issue one, why the charge still reads as not refunded, and how partial refunds affect disputes.
- RefundA Stripe refund sends money from a successful payment back to the customer's original payment method. Learn refund events, timing, and what a refund costs you.
- Smart RetriesStripe Smart Retries reattempts failed subscription and invoice payments at times chosen by a machine learning model, within a retry count and window you set.
- Subscription grace periodA subscription grace period is the time a customer keeps access after a failed payment while retries run. In Stripe, it is the past_due window. How to set it.
- Voluntary ChurnVoluntary churn is when a customer chooses to cancel because of fit, value, or price, not because a payment failed.
Disputes and fraud
Chargebacks, early fraud warnings, and Stripe Radar.
- Card testingCard testing is fraud where bots run stolen card numbers through your checkout to find live ones. Learn the signs in Stripe, the costs, and how to stop it.
- ChargebackA chargeback is a bank-forced reversal of a card payment. See how it shows up in Stripe, how it differs from a dispute or a refund, and what it costs.
- Dispute evidenceDispute evidence is what you send the card issuer to overturn a chargeback. See which Stripe fields matter, the file limits, and how to match the reason.
- Friendly FraudFriendly fraud is when a real customer disputes a charge they made themselves, which turns a valid sale into a chargeback.
- Liability ShiftLiability shift moves the cost of a fraud chargeback from the merchant to the card issuer when the payment passed 3D Secure authentication.
- Payment disputeA payment dispute is a cardholder challenging a charge through their bank. Learn what a disputed transaction means, how Stripe tracks it, and how to respond.
- RepresentmentRepresentment is when a merchant challenges a chargeback by sending evidence to the card issuer and asking it to reverse the chargeback.
- Retrieval RequestA retrieval request is a card issuer asking for records about a transaction. It can come before a chargeback, but no money moves.
- Risk ScoreA risk score is a number that estimates how likely a payment is to be fraudulent. You use it to allow, review, or block the payment.
- Stripe dispute feeStripe charges a dispute fee when a customer files a chargeback, and in most regions a second fee to counter it. How both work and when you get them back.
- Stripe early fraud warningA Stripe early fraud warning is an issuer report that a payment looks fraudulent. Learn the EFW object, how often it turns into a dispute, and when to refund.
- Stripe RadarStripe Radar screens payments for fraud. Compare Radar Lite, Standard, Plus, and Pro, see how Radar pricing works, and what became of Radar for Fraud Teams.
Stripe Connect
Transfers, application fees, and on_behalf_of for platforms and marketplaces.
- application_fee_amount (Stripe)application_fee_amount is the cut a Stripe Connect platform keeps from a payment. See how to set it, where the money goes, and what refunds do to it.
- On-Behalf-OfThe on_behalf_of parameter makes a connected account the settlement merchant on a charge, so the payment uses the seller's name, country, and fees.
- Payout ScheduleYour Stripe payout schedule sets when your available balance goes to your bank. Pick daily, weekly, monthly, or manual. It does not speed up settlement.
- Platform AccountThe platform account is the main Stripe account in a Connect integration. It onboards connected accounts and collects application fees.
- Stripe ConnectStripe Connect lets platforms and marketplaces take payments for sellers and pay them out. Compare direct charges, destination charges, and separate transfers.
- Stripe connected accountA Stripe connected account is a seller's account on a Connect platform, with its own balance, payouts and verification. Here is how it works and what to watch.
- Stripe TransferA Stripe transfer moves money from a Connect platform's balance to a connected account's balance. Learn how transfers work, how to reverse one, and the risks.
- Top-upA top-up moves money from your own bank account into your Stripe platform balance so you can pay connected accounts or cover refunds.
API and webhooks
Stripe events, webhooks, API keys, test mode, and expandable objects.
- API KeyA Stripe API key is the credential your code uses to call Stripe. Keys are publishable, secret, or restricted, and each one works in test or live mode.
- Expandable ObjectsExpandable objects let a Stripe API request return a related object in full instead of just its ID, so you skip extra API calls.
- Idempotency KeyAn idempotency key is a unique value you send with a Stripe POST request, so a retry returns the first result instead of creating a duplicate.
- Live ModeLive mode is the Stripe environment where real cards are charged and real money moves. It has its own keys and data, separate from test mode.
- OAuthOAuth is an open standard that lets one app access another on a user's behalf with a limited, revocable token instead of a password or key.
- Rate LimitA rate limit caps how many API requests you can send in a time window. Stripe returns a 429 error when you go over it.
- Stripe eventA Stripe event is a record of something that happened in your account, such as a payment or a dispute. Webhooks deliver it, and the API keeps it for 30 days.
- Stripe WebhookA Stripe webhook is an HTTPS POST Stripe sends your server when something happens in your account. Learn how delivery, retries, ordering, and failures work.
- Test ModeStripe test mode is a separate environment where you simulate payments with test cards and test keys. No real money moves.
- Webhook EndpointA Stripe webhook endpoint is the public HTTPS URL where Stripe delivers events to your server. Learn how to set one up and how to keep it healthy.
- Webhook Signature VerificationStripe webhook signature verification checks the Stripe-Signature header against your endpoint secret to prove an event came from Stripe and wasn't altered.
Slack, Zapier, and Make
Slack incoming webhooks, @channel and @here, and Zapier and Make terms.
- Action (Automation)An action is a step an automation runs after its trigger fires, such as posting a message or creating a record. Each successful action counts as one task.
- Filter (Zapier)A Zapier filter lets a Zap continue only when your conditions pass. See how Filter by Zapier works, AND and OR rules, task usage, and which plans have it.
- Formatter (Zapier)Zapier Formatter changes text, numbers, and dates between Zap steps without using tasks. See what Formatter utilities functions do and which plans have it.
- Module (Make)A module is one step in a Make scenario. It does one task in one app, and each time it processes a bundle of data it uses one operation.
- Multi-Step ZapA multi-step Zap has one trigger and more than one action, or a filter or search. See how it works, which Zapier plans allow it, and how it uses tasks.
- Operation (Make)In Make, an operation is one module run on one bundle of data. Make bills scenario usage in operations, now called credits.
- Path (Zapier)Zapier paths split a Zap into branches so one trigger can run different actions. See how path rules work, the branch and nesting limits, and task usage.
- Scenario (Make)A scenario is an automated workflow in Make. It is a chain of modules that starts from a trigger and moves data between apps.
- Slack @here vs @channelSlack @here vs @channel. @channel notifies every member of a channel, @here only the members who are active. When to use each, and how apps send them.
- Slack incoming webhook URLA Slack incoming webhook URL lets an app post JSON into one Slack channel. Here is how to get one, what goes in the text field, and its limits.
- Slack Workflow BuilderSlack Workflow Builder is Slack's no-code automation tool. Learn its triggers, how the webhook trigger works, its limits, and why Stripe events need extra code.
- Task (Zapier)A task in Zapier is one action step that runs successfully. See which steps use tasks, which are free, and why task usage grows with your Stripe volume.
- Trigger (Automation)A trigger is the event that starts an automation. It either checks an app for new data on a schedule or fires right away from a webhook.
- ZapA Zap is an automated workflow in Zapier. It starts with one trigger event and runs one or more actions in other apps. See its parts, plan limits, and billing.