Billing Descriptor

The way your company's name appears on your customer's credit card statement is called a billing descriptor. In order to qualify for the lower interchange rate offered to merchants operating in a card-not-present credit card payment processing environment (Visa: CPS; MasterCard: Merit 1), the company name and a customer service number must appear in this field. If your company offers a single product or service this descriptor would be sufficient. For example:

ABC SERVICES 800-111-2345.

This is the default billing descriptor. Your small business merchant accounts provider will set it up for you. There is also the soft billing descriptor which allows the description field in the cardholder’s statement to be modified to include a more detailed description of the transaction. The merchant’s name is usually truncated to three letters plus an asterisk followed by a short description of the service or product that your company provides. Keep in mind that this field is usually limited to 25 characters plus the phone number. Be sure to check with your credit card merchant processor to see if they support this feature and for their format requirements. For example:

ABC* Instant Oil Change 800-111-2345.

The importance of using the correct billing descriptor in your merchant account processing activity cannot be overstated. If your customer does not recognize your company's name on his or her credit card statement, the transaction may be disputed and lead to a chargeback. Consult with your credit card processing account provider on the most appropriate way to set it up.