DEFINITION of 'Zero-Floor Limit'

A retail authorization system in which all of a merchant's credit or debit transactions must be checked against the card's outstanding balance due and/or any Warning Bulletin listings about past-due or over-limit accounts before processing. Floor limit refers to the limit above which credit or debit transactions require authorization - when that limit is zero, all transactions require authorization, regardless of their size.

BREAKING DOWN 'Zero-Floor Limit'

The zero-floor limit is especially applicable in situations where the merchant does not have physical access to the customer's credit card, such as online and mail-order merchants. In such cases, the floor limit is always zero. Authorization is provided electronically through the debit or credit card's issuer.

RELATED TERMS
  1. Authorized Amount

    A sum that a merchant transmits to a credit or debit card processor ...
  2. Floor Limit

    A purchase amount over which further authorization is needed ...
  3. Authorization Date

    The month, day and year when a credit card transaction is approved ...
  4. Merchant Account

    A type of business bank account that allows a business to accept ...
  5. Card Recovery Bulletin

    A paper listing of lost, stolen, past-due, over-limit, counterfeit ...
  6. Authorized Transaction

    A credit card purchase for which the merchant has received approval ...
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