These days, our credit card processing technology is so sophisticated that all you need to send or collect payments is a mobile device. So why would anyone need offline processing?
Well, there are a couple of reasons. First, any system can experience a power outage. If a storm knocks out electrical power in your area, you may need to wait hours or days before it comes back on. If you aren’t equipped to process credit cards offline, you could miss out on thousands of dollars. The same applies to internet outages or simple drops in connection.
Not convinced that your business can use offline credit card processing? Here’s how this type of processing works, why it can be risky, and how you can implement it.
What Is Offline Credit Card Processing?
As the name implies, offline credit card processing allows you to accept credit card payments without internet connectivity. It’s a way to allow business owners to confirm a credit card transaction even if their credit card terminal has lost its connection.
Offline credit card processing is considered fairly secure. When you’re in offline mode and a cardholder makes a purchase, their sensitive data is encrypted at first contact. This encryption is impossible to decipher for anyone without the encryption key. The only one who has the encryption key is your payment processor.
The Risks of Offline Processing
The main risk of offline processing is that the charge won’t go through until your system comes back online. You’ll process the transaction offline and allow the customer to leave with the merchandise. If the payment can’t be completed for some reason, you could lose money on the items you sold.
This is a risk you assume every time you accept an offline payment. Is it worth it to you? That depends on a few factors. How likely is it that you’ll need to rely on offline processing in the first place? Do you tend to have many small transactions or a few large ones? Depending on your answers, offline processing may still hold plenty of value for you.
How to Process Credit Cards Offline
If you decide to implement offline credit card processing, there are three main ways of doing it. The first one is to have a low-connectivity payment terminal, which means that your current terminal may still do the job. Different terminals have different connectivity needs, so you’ll want to check with your provider whether offline processing is an option for you or not.
It’s also possible to configure a terminal so that it can process payments with or without an internet connection. Again, it’s up to the merchant provider to determine whether its terminals have this capability. Keep in mind that some providers have a maximum waiting period for pending transactions – if the sale isn’t processed by then, the transaction is canceled.
Finally, you may simply opt for a manual card imprinter. This is a low-tech solution that uses carbon paper to imprint the card’s expiration date and embossed numbers onto a slip. When internet service is restored, you can enter this information into the POS system.