Negative Authorization

Posted in Finance, Accounting and Economics Terms, Total Reads: 639

Definition: Negative Authorization

It is a credit card approval system which helps compare a credit card number to the list of lost, stolen, closed, cancelled account numbers. And if the number is not found on one of such lists, the transaction should be approved.


The process of negative authorization is considerably less stringent than the other process that is the positive authorization, it involves checking the customer files of the bank for the spending limits & other security parameters, like expiration date and address, before the transaction is approved. Once such kind of transaction is approved, then the hold for the total amount of the transaction is put against the credit limit o the cardholder.


The positive authorization process is safer and better way of cross-checking.


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