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Payments & chargebacksAffiliate glossary

What is Payment processor?

When a customer pays online, the processor sends the card details to the card network and the issuing bank, gets the approval and later settles the money to the merchant. It also handles fraud screening, refunds and chargebacks.

Some processors go further and act as merchant of record: they sell the product in their own name, collect sales tax and VAT, and carry the chargeback risk. Many of them also run a built-in affiliate system, so one affiliate account gives access to thousands of merchants that use the processor.

On our site, CCBill (adult paysites) and 2Checkout (software and SaaS) work this way: you join once, apply to individual vendor programs, and the processor tracks sales and pays commissions.

Related terms

Credit card authorisation
Credit card authorisation is the moment the card issuer approves a payment and reserves the amount on the cardholder’s account before the money is actually taken.
Chargeback
A chargeback is a forced reversal of a card payment, started by the cardholder’s bank after the customer disputes the charge.
VAT · Value-added tax
VAT (value-added tax) is a consumption tax added to the price of most goods and services in the EU, the UK and many other countries.
Affiliate network
An affiliate network is a platform that connects merchants with affiliates, tracks conversions and pays commissions for many programs under one account.