In the payments industry, a dynamic descriptor refers to a feature that allows merchants to customize the information displayed on a customer’s payment card statement for a particular transaction. It provides merchants with the ability to include additional details or descriptors that help customers identify and remember the transaction more easily.

Here’s how dynamic descriptors typically work:

  1. Merchant Customization: Merchants have the option to include additional information alongside the standard transaction details that appear on a customer’s payment card statement. This additional information can be customized and tailored to provide specific details related to the purchase.
  2. Descriptor Examples: Dynamic descriptors can include various details such as the merchant’s name, website, customer support contact information, a description of the purchased product or service, order number, or any other relevant information that assists in identifying the transaction.
  3. Submission to Acquirer: When a merchant processes a transaction, they submit the payment details, including the dynamic descriptor, to their acquiring bank or payment processor.
  4. Statement Display: The acquiring bank or payment processor includes the dynamic descriptor as part of the transaction information on the customer’s payment card statement. When the customer reviews their statement, they can see the customized information provided by the merchant alongside the standard transaction details.

The purpose of dynamic descriptors is to enhance customer recognition and improve their understanding of transactions by providing more context and clarity. It helps customers identify transactions and reduces the likelihood of chargebacks due to confusion or unrecognized charges.

Dynamic descriptors can be particularly useful for merchants who operate multiple brands, offer different products or services, or have complex billing structures. By providing specific information about the transaction, merchants can establish a stronger connection with their customers and improve the overall customer experience.

It’s important for merchants to work with their payment service providers or acquiring banks to understand the requirements and guidelines for implementing dynamic descriptors. Each payment processor or acquirer may have specific formatting or character limitations for dynamic descriptors. Merchants should ensure compliance with any relevant rules and regulations and carefully consider the information they choose to include to avoid any potential confusion or misrepresentation.