A stored credential transaction is a card payment made with card details that a merchant, or a payment provider acting for it, saved during an earlier purchase with the cardholder's permission. It is the card networks' formal name for a card-on-file transaction, and the main entry covers how such payments work and the rules around them.
The networks introduced stored-credential rules in the late 2010s requiring merchants to get the cardholder's consent before saving a card, to flag the first payment that stores it, and to mark later payments with an indicator showing how the credential is being used. These flags help issuers approve legitimate payments and also matter under Europe's strong customer authentication rules.
A key distinction is who starts the payment. A customer initiated transaction happens when the cardholder is present and checks out with a saved card; a merchant initiated transaction, such as a subscription renewal or one of many recurring payments, is triggered by the merchant under a prior agreement.