3 things to know about offline credit card processing

Saturday, January 03, 2015

You can accept payments anywhere with offline credit card processing, regardless of Wi-Fi availability. While most modern credit card processing requires a consistent internet connection to complete transactions, there are now offline credit card processing options to help your business travel beyond the reach of internet connectivity.

The ability to accept offline credit card payments will enhance your business’s flexibility without sacrificing security. Let’s explore some scenarios when you might rely on offline payment processing technology and see how it works.

Why might you need to handle offline credit card payments?

Imagine you’re ringing up a sale, and suddenly the internet goes out. The payment can’t be processed because your terminal can’t communicate with the cardholder’s bank. Now you’ve not only lost a sale, but you have a cranky customer on your hands as well.

Loss of internet connection isn’t the only scenario in which you might find yourself needing a way to process credit card payments offline. If your business travels to farmer's markets, outdoor festivals, or events in remote areas, you’re probably already familiar with the frustrations of limited internet connectivity in regards to payment processing.

Likewise, if you run a business that travels to your customer’s homes or places of business like a plumber or electrician, you may encounter internet connectivity issues regularly. Rather than operating a cash-only business, which can limit your sales and be an inconvenience to your customers, wouldn’t you rather have the option to accept offline payments?

But what about cellular data? While it’s true that many mobile payment processing terminals are equipped to process sales through your cellular network or by utilizing a hotspot, this connectivity may be spotty in remote areas. In addition, the ability to process payments offline circumvents the need for robust cellular coverage.

How does offline credit card processing usually work?

In the days of yore, many merchants relied on card imprinting machines to record credit card data for transactions. This machine produces a carbon copy of credit card information by imprinting the raised card numbers on a piece of carbon paper. Imprinted information usually collected includes the cardholder’s name, card numbers, and expiration date. These papers can then be used to manually process credit card transactions or be sent to the bank for verification.

One of the drawbacks of this method is that some modern credit cards don’t have raised letters and numbers and therefore can’t be used with the card imprinting machine. In addition, there are non-embossed details on each credit card, such as the CVV number, which must be manually recorded by the employee who is processing the payment.

This machine was a popular tool before the 1990s but is now primarily used in situations where other payment processing options are unavailable, such as an internet outage.

Important things to know about offline credit card processing

A typical credit card transaction is composed of six steps. First, the customer swipes or inserts their credit card at the payment terminal. Next, the card reader submits the cardholder’s information to the bank using the internet. Then, the merchant bank forwards this information to the appropriate credit card company, for example, Visa, Mastercard, or American Express.

After this, the card network performs an authorization procedure. Pending approval of this procedure, the issuing bank places a pending withdrawal on the customer’s account for the correct amount. Finally, the merchant receives confirmation that the authorization has gone through and the transaction is complete.

However, without an internet connection to your credit card terminal, this authorization and approval can’t occur. So, if you’re faced with the necessity of completing an offline transaction, how can you accomplish this safely and effectively?

In the absence of the internet, there are fewer real-time security measures for offline transactions. Therefore, when utilizing offline card processing, you’ll want to ensure that you or your POS system collects and saves the customer’s credit card information at checkout to process later.

One of the ways in which you can implement a layer of security for offline payments is by checking your customer’s ID at checkout to ensure their name and photo matches the name on the credit card being used. Checking your customer’s signature against the signature on the card is another offline security measure you can utilize. Be sure also to check the card’s expiration date.

Transcribing card numbers for manual entry

When you need to process credit card payments but cannot access the internet, it may be tempting to transcribe credit card numbers and the cardholder’s information to process later. However, this method should be your last resort, as transcribing a customer’s card data for manual entry is not PCI compliant.

The Payment Card Industry Data Security Standard (PCI DSS) is a collection of security standards put forth by a coalition of financial services providers, including MasterCard, American Express, JCB International, and Visa. This set of standards is designed to help limit credit and debit card fraud and data theft. The PCI DSS requires that all data transmissions be encrypted for card data security. PCI compliance is compulsory for any business that processes credit or debit card payments.

Not only can transcribing a customer’s information for manual entry later be a PCI DSS violation, but it can pose a risk to your business as well. For example, a customer could cancel their card before you can complete the transaction. If the card was stolen, the transaction could also be declined by the time you manually input the information.

POS system with offline capabilities

The best way to ensure PCI compliance when processing offline payments is to use a POS system that can accept credit or debit card payments in offline mode. This works because your POS system will store the customer’s data and process the payment when the portal regains an internet connection.

Most POS systems that can operate offline will encrypt the cardholder’s information, making this a PCI DSS compliant alternative to both a card imprinting machine and manually transcribing a cardholder’s information.


Offline credit card processing has come a long way since the pre-1990s card imprint machines. With POS system innovations in offline payment processing, you can comfortably rely on secure credit card processing both on and offline.

Heartland is the point of sale, payments and payroll solution of choice for entrepreneurs that need human-centered technology to sell more, keep customers coming back and spend less time in the back office. Nearly 1,000,000 businesses trust us to guide them through market changes and technology challenges, so they can stay competitive and focus on building remarkable businesses instead of managing the daily grind. Learn more at heartland.us.