Card-on-File

A stored card credential the merchant retains for future merchant- or customer-initiated transactions. COF transactions must include explicit cardholder consent at the initial save, and Visa/Mastercard impose specific transaction-type indicators on subsequent charges. Underpins subscriptions, marketplaces, and one-click checkout.

In practice.

Card-on-file turns a one-time buyer into a stored credential, which is where subscription economics live. Schemes require clear disclosure when storing credentials and correct flagging of later charges as CIT or MIT. Done properly, card-on-file plus network tokens materially improves renewal approval rates.

Related terms: MIT · CIT · Recurring transaction · Tokenization