A floor limit is the payment amount above which credit or debit card transactions must be authorized before being processed. The floor limit can vary from business to business and is specified in the merchant processing agreement.
The term floor limit was coined, and had a lot more significance, in the past when on the sales floor the point-of-sale staff had to call for authorization on any payment amount that was over a predetermined level. Back then credit card processing involved taking a physical imprint of the card and the authorization process required a personal review, making the process both time consuming and expensive. Today merchants can benefit from electronic authorization systems that merchant banks provide at a very low cost. Once a payment is authorized, the merchant has an additional and powerful assurance against fraud.
Still, even today, the floor limit concept comes into play occasionally. For example, if unable to connect to The merchant bank approval is required, not a dealer be able to receive electronic authorization and no appeal against the fraudulent activity or chargeback customers have generated controversy. But if the transaction amount limit is less than the ground is not authorized by the Merchant Bank's operations. However, if the amount limit on the ground, the trader, the transaction and may approve this by a phone conversation with the merchant bank and to achieve a "DisagreeAuthorization. "In this case, the trader is well advised to take the card imprint and places it on the receipt.
For traders who operate in a card not present environment, limiting the ground is always zero. This means that all their transactions always require authorization regardless of the payout. All Internet, mail order and telephone order merchants fall into this category.
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