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Business Definition for: authorization code
Dictionary of Banking Terms
authorization code

in bank cards, a message from a merchant processing bank, the acquirer bank, to a card accepting merchant approving transactions against the card presented by the cardholder.

See also negative authorization , zero-floor limit , positive authorization
Related Terms:
negative authorization

approval of a bank card transaction in which the customer's account number is compared against a list of cancelled accounts numbers. This file is called a negative file. The opposite is positive authorization, in which each request for authorization is checked against the account holder's transaction file.

zero-floor limit

retail point-of-sale authorization system in which all bank card transactions are approved by checking the transactions against either the outstanding balance due or the warning bulletin listing over limit or past due accounts.

positive authorization

retail authorization system where all noncash transactions are compared against a bank's customer files for approval. This is a more stringent form of credit approval than a negative authorization system, because a positive file may turn down persons who have exceeded the authorized credit limit on a credit card account, but are not delinquent cardholders.

Copyright c 2006, 2000, 1997, 1993, 1990 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
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