What does Authorization mean?
Authorization is a process of granting or denying a user or client to access a secure system. Most security systems are based on a two step process: first step is to authenticate and ensure that the entity requesting access to the system is really what and how it claims to be. The second step is Authorization which implies allowing access to only those resources which are appropriate to that specific entity’s identity.
From a commerce point of view authorization is a very important concept for both credit card merchant and credit card holders accounts. If a retailer goes above a certain purchase limit, they must ask for authorization from the appropriate card issuer before they can continue on with the sale. This authorization can be sought by telephone or at a cash register, electronically.
This is a means of preventing or at least limiting credit card fraud. Authorization is actually the first step in credit card processing. After swiping a card, the data is sent to a bank, called acquirer, to request the authorization for a sale. The bank then routes this request to the credit card issuing financial institution, where it is either authorized or denied.