Everything You Need to Know About Offline Credit Card Processing

If a merchant loses the internet or phone connection that is used to complete the transaction, business may grind to a halt. That can happen when connectivity is disrupted by a weather-related event, or when at a job site or in a remote area where connectivity is spotty. To avoid losing sales under such circumstances, it’s important to know what options there are for processing credit card transactions offline.

The Old School Method

Prior to the digital age, credit cards were processed manually, using a machine that made carbon copies of pertinent details embossed onto the card. But this manual method is so obsolete that it leaves much to be desired. Critical information, like the 3-digit security code, may not even be embossed on newer cards. So, when it comes to modern-day solutions, the card imprint machine is a rather unreliable and cumbersome dinosaur.

Automated Solutions

Fortunately, there are other ways to manage offline transactions. Today there are credit card terminals designed with a special offline functionality feature. If there is no way to connect to the internet for some reason, the terminal’s built-in software can securely encrypt and store the transaction data until the terminal is back online. Once the system is up and running again, the transaction that was paused is completed. (For merchants using Square, it also provides an offline mode, for card-present transactions involving magnetic stripe cards.)

Terminals with Offline Features

For example, the Tetra 5000 and the Tetra 3500 credit card terminals (manufactured by Ingenico) each offer this kind of offline mode technology, also known as S&F (Store & Forward). When a dial-up, internet, or wireless connection is unavailable, the merchant can activate this offline option. While in S&F mode, just swipe, tap, or insert the card or manually enter the account number. The terminal will store the data as a pending transaction and print an offline merchant receipt. The merchant also has the option to print a receipt for the customer. The S&F feature can also be used to process customer returns, which will be credited to the cardholder after connectivity resumes.

Settlement and Funding

Once connectivity is restored and the terminal is again online, the transaction is completed and the payment is authorized. Either single S&F transactions or batches of them are settled and funded, and settlement reports can be generated and printed. The Tetra 5000 and Tetra 3500 terminals can also accept all payment methods including magstripe, EMV, NFC/Contactless, and QR codes. They incorporate the most up-to-date security and encryption technologies, have color displays and thermal printers, and can be connected by ethernet, modem, or Wi-Fi.

Best Practices

No matter what kind of terminal or procedure is used for offline transactions, full verification and authorization won’t occur until the system is back online. For that reason, businesses may want to establish a policy that caps the dollar amount of offline purchases. It’s also prudent to double-check the card’s expiration date to make sure it is still valid, and to confirm that the customer’s identification and signature match those that are on the card.