Is there a credit card transaction limit for my merchant account?
A merchant asks the question, “Some time over the years, we were told we cannot swipe a credit card for more than $5000 at a time. I don’t recall whether that was our old credit system or CenPOS. Can you help?”
Answer: There are several possible reasons. If you’ve noticed declines related to high dollar transaction amounts, here are three reasons why it could happen:
- Your processor has a high ticket limit. When a merchant account is established, the application includes an average ticket and high ticket.
- If the agent who submitted your paperwork does not indicate you have high ticket transactions, you’d probably experience problems right away.
- It could be a hard decline, or more likely, the transaction is not settled or funded until someone from risk management talks to the merchant.
- The high ticket ties to automated triggers for potential risk alerts. For example, a merchant has an average ticket of $250, and a high ticket of $30,000. Most transactions are under $1000, they average $250, and occasionally- maybe once or twice a month for a low volume merchant- they have a really big transaction. If the merchant deviates from the norm, the internal risk management team may hold up settling that transaction pending a call to the merchant, or they might take other action. Merchants generally don’t have access to what will trigger an alert. After all, it would defeat the purpose of setting up fraud prevention tools if they told everyone what they were.
- Merchants can ask to have their account re-evaluated for underwriting if they find that high ticket sales are being held up.
2. The card issuing bank may impose a limit that prevents the transaction from going through. Consumers may have a daily spending limit both on credit and debit cards. Most debit cards have a per transaction limit as well. The consumer must call the 800 number on the back of the card if they have questions.
3. The CenPOS merchant created a limit. CenPOS does not inherently have a limit, however, the merchant could create a rule that with a transaction limit if they wanted to. If the merchant creates such a rule, the response will be ‘transaction declined by merchant parameter’. These are some examples of limits you could create:
- no transactions over $5000
- $5000 daily limit on a card
- email an alert for transactions over $5000, but let the transaction go through
Why would a merchant choose to create a limit? What if you owned a retail store and nobody ever spends more than $200 in a single day? A $5000 sale would be so unusual that it screams fraud so the merchant blocks it. Alternatively, instead of killing the sale, the merchant using CenPOS could alternatively set other parameters that would be triggered as well.