What Is an Authorization Code?

An authorization code is an alphanumeric password that authorizes its user to purchase, sell or transfer items, or to enter information into a security-protected space. An authorization code is typically a sequence of letters, numbers, or a combination of both, that validates a person's identity, approves a transaction or provides access to a secured area.

The most common usage of authorization codes is those sent to a merchant from credit card issuers, to confirm that the customer's credit card has s𝓡ufficient credit available to authorize the transaction.  

Understanding Authorization Codes

Authorization codes are used for any transaction or entry that has restrictions on which users are entitled to access. For example, a credit card authorization code is a five- or six-number code from the issuing bank to the vendor, that authorizes the sale. If the credit card used is counterfeit or if the card is over its predetermined limit, the credit card company will automatically decline the sale. If approved, the authorization code is attached to the credit ꦗcard transaction. This signals to the merchant that the transaction is legitimate, while also helping to identify the transaction in follow-up examinations, such as the return of merchandise or purchasing disputes.

Authorization codes are transmitted digitally and are used to accelerate credit card processing. If vendors had to call the issuer for a verbal authorization code, in order to complet🐻e each and every transaction, it would drastically reduce the speed of commerce.

Authorization Codes in Expense Approvals and 🌱Data Security

Authorization codes also play a role in 澳洲幸运5官方开奖结果体彩网:corporate financial controls. The staff may be provided with different authorization co🦩des for purchases and expenses. This lets companies track the purchases and 𓂃spending in specific areas down to the employee level.

These authorization codes are also given specific transaction thresholds. If an employee is attempting to expense something beyond his or her allowance threshold, it will requℱire an authorization code to be given by a manager, supervisor, or another staffer higher in the organizational hierarchy. In this sense, authorization codes are ♛integral control mechanisms that can be used to help combat employee fraud or the misappropriation of funds.

Authorization codes have also become commonly used in professional workplaces to maintain information security. Access to servers or VPNs can be managed using authorization codes that are tied to unique user IDs, in order to co❀ntrol who is granted🍬 to access sensitive databases.

While these authorization codes may be permanently used over the length of an employee's tenure, they are more often periodically refreshed—similar to the refresh of password controls. There are also one-time authorization codes or tokens that only last for the length of a single session.