What is Payment Restrictions? Definition and Meaning - Ikajo Glossary


Payment Restrictions

What are payment restrictions?

Payment Restrictions mean the limitation of payment which can’t be exceeded by both parties of the deal or the set of regulations that can’t be violated. There are many alternatives to limit the payments from the trader’s side.  Restrictions about the time, single transaction or particular aspects of the payment are on the list. 

Payment restrictions term is popular in bank loan negotiations which involve dividends, repurchase and many others. Such contracts usually include the conditions that restrict the payments. However, the exception is the file that lists the range of allowed questions. 

How do payment restrictions work?

Payment restriction is a perfect method for a merchant to create some limitations for purchasing in his/her online store. These restrictions include the minimal or maximal transactions, various payment system restrictions, and others. Therefore, such an approach allows preventing the possible chargebacks and fraud ratio. Those merchants who have a high average ticket amount also opt for credit card authorization hold. It allows you to freeze the transaction and have a personal conversation with a buyer. Once everything is clarified, a merchant can manually approve the payments. You can use both options to safeguard yourself from chargebacks and fraud. 

Examples of payment restrictions usage:

This online shop has too many payment restrictions. So, I will better search for another one.

This organization is not going to create any restricted payments.

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