An offline transaction is one in which the card and POS device approve the transaction based on their own parameters, without contacting their banks.
Whether a transaction is performed by contact or contactless, the card and POS device can decide, based on their parameters, whether the transaction will be processed offline.
The limits checked in contact transactions differ from those checked in contactless transactions.
In contactless transactions, the Contactless Limit, CVM Limit, and Floor Limit are checked, while in contact offline transactions only the 'Floor Limit' is checked. The CVM Limit and Contactless Limit are not checked.
An offline transaction attempted above the Contactless Limit is forwarded to the card's issuing bank and authorized online.
The three limits in contactless transactions
In contactless transactions, the terminal checks three different limits, and these are often confused:
- Contactless transaction limit: The highest transaction amount that can be made contactlessly. Transactions above this amount cannot be made contactlessly; the card must be inserted.
- CVM limit: The transaction amount that can be made without a PIN. For contactless transactions above this amount, PIN entry is required.
- Contactless floor limit: The highest amount that can be approved offline. Transactions above this amount are sent for online authorization.
How the limits relate to one another
These limits are generally defined so that the floor limit is the lowest and the contactless transaction limit is the highest. For example, if a transaction amount is above the floor limit but below the CVM limit, the transaction is made without a PIN but is authorized online.
Practice in Turkey
In Turkey, most banks consider offline transactions risky and set the floor limit to 0. In this case, all contactless transactions are also authorized online. From the cardholder's perspective, the contactless transaction is still fast, since the online authorization takes no more than a few seconds.
Who sets the limits?
Contactless limits are set within the framework of the card scheme rules and the regulations in the country, and are loaded onto terminals as parameters. Over time, these limits are updated according to inflation and usage habits.
