An offline transaction is one that is approved by the card and the POS themselves, when a chip card transaction is made at a POS, based on decisions made by the card and the POS without going to any system (the card's bank or the POS's bank).
For this reason, because some sectors are considered risky, performing offline transactions in these sectors is blocked, and transactions must be approved online by the card bank and the POS bank.
So which sectors are these?
Online authorization is mandatory for sectors covered by the Contactless Application that are defined under the MCC (Merchant Category Code) values listed below.
| Sector | MCC Code |
| Jewelers | 5094, 5944 |
| Telecommunications | 4812, 4821 |
| Electrical-Electronic Goods, Computers | 5045, 5065, 5722, 5732, 5734, 5946 |
Why these sectors?
The common feature of the sectors listed in the table is that the products sold are valuable, easily portable, and easily converted to cash. Jewelry items, mobile phones, and electronic goods can be purchased with fake or stolen cards and sold off quickly. Since the card's status is not checked with the bank in offline transactions, online approval is required in these sectors.
How is MCC checked?
The terminal reads the MCC value defined for the merchant from its parameters. If the MCC belongs to one of the sectors where offline transactions are not allowed, the terminal sends the transaction online regardless of the amount. This check is performed based on the parameters that the merchant's bank loads onto the terminal.
Similar restrictions
In high-risk sectors, restrictions beyond offline transactions may also apply:
- In some sectors, installment transactions with credit cards are not allowed, or the number of installments is limited.
- In some sectors, additional verification or identity checks may be required.
- Banks may apply lower transaction limits for certain MCCs based on their own risk assessments.
Is the list up to date?
The sector and MCC list in the table is the list determined under the Contactless Application at the time this article was published. Since the list may be updated over time, the current rules of BKM and the banks should be taken as the reference in practice.
