how zero floor limits work
zero floor limits are an increasingly popular provision by taking advantage of the advanced computerized systems that are now responsible for processing payments transactions can be authorized within a matter of seconds in fact there is essentially no difference in the speed required to authorize a large transaction as compared to a small one for this reason zero floor limits have become common in recent years in the past merchants who wished to authorize a transaction would need to take a physical imprint of the customer s credit card this process would inevitably slow down the pace of transactions causing many merchants to impose floor limits minimum size thresholds below which transactions would not need to be authorized by switching to a zero floor limit policy merchants and customers alike can benefit from improved fraud protection although merchants have some discretion when deciding on their own floor limit credit card companies can also set their own rules which the merchants would then be obliged to follow if a merchant allows a transaction to be processed without adhering to the credit card company s floor limit policies that merchant may be penalized by the credit card company although zero floor limits are growing in popularity they were initially used mainly in situations where the merchant could not have access to the customer s physical credit card such as with online stores or mail order companies in these cases which are known as contactless transactions it has long been customary to authorize all transactions regardless of their size to protect against the risk of purchases being made with stolen credit cards real world example of a zero floor limit