In chip transactions made with a credit card through a POS, the transaction amount is approved by the card and the POS based on the parameters on the card and the POS, without the transaction going to the card bank or the POS bank. These transactions are called offline transactions.
Offline transactions are sent by the POS device to the merchant's bank.
So how do offline transactions reach the card bank, and how are they reflected in the cardholder's account?
In an offline transaction, if the card bank and the POS bank are the same, the transaction is also reflected to the cardholder as soon as it reaches the POS bank.
In an offline transaction, if the card bank and the POS bank are different, the POS bank forwards the relevant offline transaction to BKM via a clearing file. In the Incoming file prepared by BKM, the relevant transaction is forwarded to the card bank. The card bank reflects the relevant amount in the card's transactions for that period.
How an offline transaction is reflected in the account
Since an offline transaction does not reach the card bank's server instantly, the cardholder's balance is updated after some time. During this period, the cardholder may see that the available limit has not changed.
The transaction is reported once the system goes online or at end of day (batch close); the card bank then posts the transaction to the account. If the balance is insufficient, the offline transaction may subsequently fail, and this situation is treated as a risk.
For this reason, offline transaction limits are kept low.
