Zero-Floor Limit

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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.

INVESTOPEDIA EXPLAINS '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.

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