Positive Authorization

DEFINITION of 'Positive Authorization'

A system used to authorize retail purchases. Positive authorization compares all non-cash transactions against bank customer files for approval. Transactions that come back as delinquent are rejected.

BREAKING DOWN 'Positive Authorization'

Positive authorization is a stricter form of credit approval than negative authorization. Positive authorization can reject a customer who has merely temporarily exceeded his limit. Negative authorization rejects only those who are genuinely delinquent cardholders.