Positive Authorization

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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.

INVESTOPEDIA EXPLAINS '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.

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