Is there a limit on a credit card transaction imposed set by the merchant?

gamblingsteve

Hi all

I'm wondering if there is a transaction limit on a credit card transaction imposed by the merchant?

I went engagement ring shopping on Saturday and tried paying on my HSBC credit card. The transaction didn't go through so I called HSBC. They advised that the transaction amount was greater than the merchant's limit and I'd need to put the transaction through in 2 smaller amounts.

I'm very skeptical that the merchant has a transaction limit that low as the ring wasn't super expensive (they advised they do transactions on credit cards over £100k) and even though the fiance wishes I spent that much, it is really outside my budget.

I personally believe that HSBC has the transaction limit on my credit card and they would need to set a temporary increase after my phone call and I think they fobbed me off with the merchant excuse.

Does anyone have some insight into this?

Thanks

Eydon

There are several limits.

The merchant's terminal will have a floor limit where transactions under a certain amount don't always need to go for online authorisation. It tends to be a low value, and even then 1 in n transactions will still go online.

The merchant may also have a limit on the amount and value of transactions that they can do in a day and may include limits on individual transactions. This will be set by the bank that operates the merchant's card terminal.

There are also limits at Visa and Mastercard which allow them to stand-in and authorise a transaction upto a certain amount should the card issuer be unavailable for any reason.

And there are limits set by the card issuer and these tend to be based on the type of card. Some types of cards will have higher transaction limits than others based on the first few digits of the card number.

I always thought that the usual response when any of these last three limits was exceeded was that the transaction would refer and the merchant would be asked to phone up for voice authorisation from the issuing bank. But maybe not in this case.

bengalknights

As Eydon states there are many limits for merchants it could be that your transaction was just picked out against the merchants many limits on that day.

hippey

All merchants have floor limits - Normally between £0 & £100 dependant on the risk profile, card type, transaction method etc.

And they also have ceiling limits, normally they don't get in the way as they again depend on the risk profile of the business, they are in the region of £999 - £99999.

Your bank would not be able to see the mechants limits (although you can often tell by the reason codes), and it is a big no no for the merchant to process 2 amounts for one item, they can lose the money should you claim a chargeback for any reason..... It could be that the terminal has referred and the operator has not known what to do, or it's declined as for some reason the interconnection has failed and defaulted to 'decline'.

I have not heard of the higher transaction limits based on the BINs as this doesn't affect merchant side processing, but card types can make a difference. i.e. ceiling limits on Amex & Visa could well be different.