Digital Commerce Glossary: Key Terms for Digital Goods Sellers

This glossary defines the terms you'll run into when selling digital goods online, from payment processors and chargebacks to HWID locks, DNS records, and Discord OAuth2. Each entry gives a plain-language definition, and where it's relevant, a note on how the concept works in OpenStock. Terms are grouped by topic, so you can read a whole section or jump to the word you need.

If you're just getting started, read this alongside our guide on how to sell digital products online.

Key takeaways

• Payment terms like processor, gateway, and merchant of record determine who handles your money and who is liable when things go wrong.
• Chargebacks, disputes, and friendly fraud are the biggest financial risk for digital sellers, because delivery can't be undone.
• Crypto payments trade card chargebacks for other concerns: wallet security, confirmations, and price volatility.
• Licensing terms like serial key stock and HWID lock describe how you deliver and protect software.
• Growth metrics like conversion rate and average order value tell you whether changes to your store are working.

Payments

Payment processor

A payment processor is the company that moves money from the buyer's card or account to yours. It handles authorization, settlement, and payouts. Stripe and PayPal are common examples. OpenStock connects to processors using the seller's own accounts, such as the seller's own Stripe keys.

Payment gateway

A payment gateway is the technology that securely captures payment details at checkout and passes them to the processor. Many modern providers bundle the gateway and processor into one service, which is why the two terms are often used interchangeably. OpenStock supports Xsolla as one of its gateway options.

Merchant of record

The merchant of record (MoR) is the legal entity that sells the product to the customer. It's responsible for the transaction, including handling tax, refunds, and chargebacks. Some services act as MoR for you. When you take payments through your own processor account, you're usually the merchant of record yourself.

Stripe Connect

Stripe Connect is Stripe's product for platforms and marketplaces that route payments to multiple sellers or connected accounts. It handles onboarding, payouts, and fund flows between a platform and its sellers. Details are in Stripe's Connect documentation.

Statement descriptor

The statement descriptor is the text that shows up on a buyer's card or bank statement for your charge. A clear, recognizable descriptor helps prevent disputes from buyers who don't recognize a charge.

IPN (Instant Payment Notification)

IPN is a message a payment provider sends to a seller's server when a payment's status changes, such as when it completes or is refunded. It's PayPal's long-standing name for this kind of notification, similar in purpose to a webhook. OpenStock's PayPal Friends & Family option uses manual and IPN-based verification.

PayPal Friends & Family

Friends & Family is a PayPal option meant for sending money to people you know, not for buying goods. These payments generally don't come with PayPal's purchase protection, which matters for both buyer and seller. OpenStock supports PayPal Friends & Family as a payment method alongside standard PayPal business payments.

Fraud and disputes

Chargeback

A chargeback is when a cardholder's bank forcibly reverses a payment after the buyer disputes it. The seller loses the sale amount and usually pays a dispute fee, and frequent chargebacks can put a processor account at risk. Digital sellers are especially exposed because a delivered product can't be returned. See our guide on reducing chargebacks for digital goods.

Dispute

A dispute is the formal process that starts when a buyer challenges a charge with their bank or payment provider. The seller can respond with evidence, such as delivery records and customer communication, before a decision is made. Stripe explains the process in its disputes documentation.

Friendly fraud

Friendly fraud is when a buyer who really did make a purchase disputes it anyway, whether by claiming they didn't authorize it, didn't receive it, or by forgetting they bought it. It's common with digital goods. Clear descriptions, delivery records, and a recognizable statement descriptor help you fight it.

3-D Secure

3-D Secure (3DS) is an authentication step for online card payments, where the buyer confirms the purchase with their bank, often in an app or with a one-time code. Successfully authenticated payments can shift liability for certain fraud disputes away from the seller. Stripe describes how it works in its 3D Secure documentation.

Blacklist

A blacklist is a list of emails, IP addresses, or other identifiers that are blocked from buying. OpenStock's Fraud Shield (Silver plan and up) supports IP and email blacklists, country blocks, and high-value order rules, with actions to block, flag for review, or silently log.

Crypto

Wallet address

A wallet address is a public string that identifies where cryptocurrency should be sent, much like an account number. Each blockchain uses its own address format, so a Bitcoin address can't receive Ethereum. OpenStock accepts Bitcoin, Litecoin, and Ethereum into store wallets, and sellers withdraw to their own wallet address.

Confirmations

A confirmation is when a transaction is included in a block on the blockchain, and each later block adds another confirmation. Sellers usually wait for a set number of confirmations before treating a payment as final, which is why crypto delivery can take a little longer than card delivery. Our guide to accepting crypto payments for digital goods covers this in more depth.

On-ramp

An on-ramp is a service that turns traditional money, like a card payment, into cryptocurrency. OpenStock's Card to Crypto option lets a customer pay by card and has the payment converted to crypto through Onramper.

Delivery and licensing

License key

A license key is a unique code that unlocks or activates software for a buyer. It might be validated offline by its format or signature, or online against a licensing server. Learn more in how to sell software license keys.

Serial key stock

Serial key stock is a pre-generated list of keys loaded into a store, where each sale uses up one key. On OpenStock, sellers paste keys into a product's inventory one per line, and they're delivered automatically after payment, along with a delivery email and an order page. Read automated digital product delivery for the full flow.

HWID lock

An HWID (hardware ID) lock ties a license key to a specific device, so the key stops working if someone tries to use it on another machine. It's one of the most effective ways to stop key sharing and reselling. HWID locking is enforced by your software or licensing service, not by the storefront.

KeyAuth

KeyAuth is a licensing and authentication service software developers use to issue and validate license keys. OpenStock's KeyAuth delivery (Silver plan and up) generates a KeyAuth license at purchase using the seller's KeyAuth seller key, with the duration and license level set on the product.

Variant

A variant is a version of a product with its own price or options, such as a one-day, one-week, or lifetime license. Variants let buyers choose from several options on a single product page.

Storefront and domains

Subdomain

A subdomain is a prefix added in front of a main domain, like shop.example.com. Every OpenStock store gets a subdomain in the form your-store.openstock.io.

Custom domain

A custom domain is a domain you own, like yourbrand.com, used for your store instead of a platform subdomain. On OpenStock, custom domains are available on Silver and higher plans. See our guide to setting up a custom domain storefront.

A record

An A record is a DNS record that points a domain name to an IPv4 address. OpenStock custom domains are connected by adding an A record pointing at the platform's IP address. Cloudflare users need to set the record to DNS-only (grey cloud) so the SSL certificate can be issued.

CNAME record

A CNAME record is a DNS record that points one domain name at another domain name instead of at an IP address. It's commonly used for subdomains like www or shop. OpenStock's custom domain setup uses an A record rather than a CNAME.

DNS propagation

DNS propagation is the time it takes for DNS changes to spread across the internet's resolvers. For OpenStock custom domains, it usually takes minutes but can take up to 48 hours.

SSL/TLS

SSL/TLS is the encryption that secures traffic between a browser and a website, shown by https:// and the padlock icon. TLS is the modern protocol, while SSL is the older name people still use. OpenStock provisions SSL for custom domains after it verifies DNS.

Webhook

A webhook is an automated HTTP message one system sends to another when an event happens, such as an order being completed. OpenStock can send store events (order.created, order.completed, order.refunded, and product.created) to Discord webhooks.

API key

An API key is a secret token that lets a program access a service's API on your behalf. Treat it like a password: never share it publicly or put it in client-side code. OpenStock provides API keys for its Checkout API, Withdrawal API, and Customer Balance API. See the docs.

Discord

Discord role

A Discord role is a label in a server that controls permissions and which channels a member can see. Sellers often sell roles to give buyers access to paid channels. OpenStock's Discord integration maps products to roles and assigns them after payment. See how to sell Discord roles.

Discord OAuth2

Discord OAuth2 is the authorization flow that lets a user grant an app limited access to their Discord account, for example to confirm their identity or let a bot add them to a server. It's documented in Discord's OAuth2 developer docs.

Guild ID

A guild ID is the unique numeric identifier for a Discord server ("guild" is Discord's internal term for a server). Bots and integrations use it to know which server to act on. You can copy it in Discord after turning on Developer Mode.

Discord bot

A Discord bot is an automated account that can manage members, roles, and messages through Discord's API. OpenStock supports custom Discord bots linked to API keys, with logs. Free and Silver plans include one bot, and Gold and above allow multiple bots.

Growth metrics and store tools

Conversion rate

Conversion rate is the share of visitors who complete a purchase, calculated as orders divided by visitors. It's the main measure of how well your store pages and checkout work. OpenStock includes analytics and visitor analytics to help you track it.

AOV (average order value)

Average order value is total revenue divided by number of orders over a period. Bundles, add-ons, and volume pricing are common ways to raise it.

Coupon

A coupon is a code that gives a discount at checkout, either a percentage or a fixed amount. Time-limited coupons work well for launches, because they create urgency without permanently lowering your price.

Bundle

A bundle is a set of products sold together, usually for less than buying each one separately. Bundles raise average order value and help move less popular items.

Upsell and add-on

An upsell encourages the buyer to choose a more expensive option, and an add-on is an extra item offered alongside the main product, often at checkout. OpenStock supports both bundles and add-ons.

Store credit

Store credit is a balance a customer holds with a store and can spend on future purchases. It's often given instead of a cash refund, or loaded up front. OpenStock supports customer balances that can be used as a payment method, plus a Customer Balance API.

Refund policy

A refund policy is the published set of rules for when and how buyers can get their money back. For digital goods, a clear policy reduces disputes and gives you something to point to in a chargeback response. Check local consumer protection rules when you write one. OpenStock stores include a terms page for publishing yours, and you can create a free store to try it.

Frequently asked questions

What is the difference between a payment processor and a payment gateway?

A payment gateway securely captures the buyer's payment details at checkout and passes them along. The processor actually moves the money between the buyer's bank and the seller's account. Many modern providers offer both in a single service, so the terms are often used interchangeably.

What is the difference between a chargeback and a dispute?

A dispute is the process that starts when a buyer challenges a charge with their bank or payment provider. A chargeback is the reversal of funds that happens as part of a card dispute, often before the seller has responded. The seller can submit evidence during the dispute to try to win the funds back.

Does OpenStock use an A record or a CNAME for custom domains?

OpenStock custom domains use an A record pointing at the platform's IP address. Once DNS is verified, OpenStock provisions SSL for the domain. Cloudflare users should set the record to DNS-only (grey cloud) so the certificate can be issued, and propagation usually takes minutes but can take up to 48 hours.