Offline transaction parameters are divided into two types: contact offline and contactless offline. These parameters can be managed separately through Terminal data and Chip data.
The ways offline transactions are reported to the HOST include:
- Report after an online transaction,
- Report after X occurrences,
- Report after X minutes,
- Report after batch (end of day) close. These examples can be expanded further based on your business decisions.
You can read more about the definition of offline transactions in the article What is an Offline Transaction? – Arif UNAL (arifunal.com).
What risk does parameter selection balance?
In an offline transaction, the transaction is evaluated by the card and terminal without going to online authorization. This is fast and keeps service uninterrupted during connectivity issues; however, cardholder verification and balance checking are limited.
For this reason, parameters are carefully determined based on amount, counter, and transaction type. A broader offline allowance increases fraud risk, while a narrower allowance disrupts the customer experience during connectivity issues.
The method chosen for reporting to the HOST affects the reconciliation and monitoring workload. Batch reporting after an online transaction is simpler, while instant reporting on every transaction provides better visibility.
