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Offline card payments should be possible no later than 1 July 2026

riksbank.se

381–390 of 581 posts

Re: Offline card payments should be possible no later than 1 July 2026

#381

Earlier quoted context omitted.

They use largely the same rails/network (for example Mastercard). The only meaningful difference is on how and when funds are reconciled. Some payment providers ask up front to simplify the flows as it's not totally trivial to determine what sort of card it is, and also because different fees apply - historically some merchants added specific fees to basket etc. (less so nowadays but the UI convention sticks)

From memory, online and offline transactions are usually split out by BIN number (first six digits) The BIN will tell you which bank was the issuer and which class of card you have, like standard or premium, though most readers probably don't take that into account beyond the card scheme and card type associated with the range that the individual BIN is in. Many banks will have multiple BINs for the same card type if…

It's usually based on the chip settings. Rules aren't as simple as "always online" or "never offline"; an issuer can e.g. convey that they'd prefer online transactions for certain types of payments, while offline is ok for others, via relatively complex configurations of the code of the chip application.

Before that, there was the service code on the magnetic stripe, which also can convey things like "online only" or "domestic use only".

The BIN is only involved in risk management on the terminal's side: Many of these in-flight terminal accept deferred online transactions, which means that, even though they're completely offline, they take the risk of accepting an online-only card. (For truly offline capable cards, the risk is often with the issuing bank.)

That type of risk management can benefit from knowing what type of card it is, and prepaid cards are often seen as riskier (because customers might intentionally drain them before a flight). Of course, debit and credit cards can also be empty/marked as stolen, but these are marginally harder to get and replace.

Re: Offline card payments should be possible no later than 1 July 2026

#382

Earlier quoted context omitted.

That depends on where you are. But all the major networks expect auths before capture, even if it isn’t technically enforced, and will punish gateways and merchants who have low auth rates. Auth before capture doesn’t generally reduce interchange. What it primarily does is shift liability in the event of a dispute. If a chargeback is raised, and no auth happened, then the merchant simply looses immediately. They have…

I always wondered how come that some online merchants where I record the card do not ask for auth or 2 factor and some other does. For example, I have recorded my card info in a webapp that I use to pay the bills, and it never asks for anything, which is good, as I have many bills to pay, and I wouldn't want spam of 2FAs. Can you provide some technical terminology on this behavior or links, since you seem to be in th…

Amazon as well seems to never do proper auth (at least here in the UK). When using an existing card where the delivery address matches the billing address, card transactions go through instantly

Re: Offline card payments should be possible no later than 1 July 2026

#383
post #5

Some context might be useful here. I spent some time living Sweden not too long ago and Swedes practically don't use cash. It's usually not said out loud, but cash is often considered to be dirty and criminal, to the point that most don't have any at all. Digital payments are very convenient and deeply integrated, so long as you have a local ID which allows you use the local payment system Swish etc. This worked nice…

Physical attacks are also possible, this site focuses on software so much of the time, while acts occur in the physical world. Cyberattacks are grey areas, but based on some of the undersea cable cutting and factory fires Russia has been performing, physical attacks are very much on the table if you can obscure the source.

Physical attack is localized. Cash is more decentralized. Maybe this offline card-payment will help with that but I wold not bet on it.

Re: Offline card payments should be possible no later than 1 July 2026

#384
post #9

It's not about paying by cash but paying by card offline. How is this going to be implemented I wonder. On planes they often accept credit cards even when there's no internet. I assume this is a trust in-credit-based system because they don't accept debit cards, i.e. if you are worth being trusted with a card you can have your sandwich now and we will take care of the bank processing once we are on the ground. So may…

My Garmin watch has Garmin Pay, which works even if I don't have my phone with me. I think I just presumed that there is a bank balance cached somewhere in the app so that an attempt to spend up to a hard limit or that amount will work.

Mobile/wearable wallets are usually online-only, since you can add one card to many devices, so offline limits would be really painful to synchronize (or alternatively banks would be taking a big risk by allowing more than one or two devices and duplicating limits).

Re: Offline card payments should be possible no later than 1 July 2026

#385
post #365
post #9

It's not about paying by cash but paying by card offline. How is this going to be implemented I wonder. On planes they often accept credit cards even when there's no internet. I assume this is a trust in-credit-based system because they don't accept debit cards, i.e. if you are worth being trusted with a card you can have your sandwich now and we will take care of the bank processing once we are on the ground. So may…

Often this is indeed trust-based, but the trust isn't due to you having a card issued by a trusted bank (most airlines accept debit cards too), but rather due to passengers being extremely visible and well-identified: In-flight credit card fraud is an incredibly bad idea, given that most countries check your ID at least at some point during getting on the plane, and seats are usually assigned as well. (Doesn't mean t…

Not that I disagree, but it does make me wonder if this would be one rare instance where American Express which I know is notorious for siding with their customers (at least for a time? - my father worked as an accounts payable accountant at a big hotel in Orlando near Disney World and he said American Express was notorious at not paying even with signature if their customer claimed it was fraud) would still side with their customers. Leaves one to wonder if they even take Amex on flights.

I still remember them taking my card which I think was a debit card on a flight and shoving it into carbon copy paper and basically billing me whenever we landed. This was late 2000s. From Puerto Rico to Florida.

Re: Offline card payments should be possible no later than 1 July 2026

#386

Earlier quoted context omitted.

Yes, most of my flying experience is US domestic. While I expected differences, I didn't expect this one

Most EU flights I’ve been on offer Internet to travelers for a fee. Even if they don’t offer it to travelers, it doesn’t mean they themselves do not have Internet connection… I’m sure most of the time, they have access to the internet and paying by card is not more complicated than paying in any other store.

> Even if they don’t offer it to travelers, it doesn’t mean they themselves do not have Internet connection

It usually does, it requires quite a bit of equipment and it doesn’t make economical sense to install it and not sell it to passengers. Airplanes have other means communicating with the ground and airline offices though.

Re: Offline card payments should be possible no later than 1 July 2026

#387

Earlier quoted context omitted.

How do you pay for things that are just one or two euros? In my local boulangerie they don't accept cards for less than 5€, so if I just want a baguette I need to have cash.

Oh it's easy: they don't use Visa / Mastercard, but their own domestic system called Swish, which is much cheaper for businesses and of course completely free for individuals. Similar instant payment systems have really blossomed across the world, especially in recent years. One by one, countries are finally figuring out that there's no reason to rely on American brands for all of the payment processing.

A lot of stores have minimums if you want to pay with Swish, the more common answer to how we pay for small amounts like that is... we just use our cards like any other purchase.

Re: Offline card payments should be possible no later than 1 July 2026

#388

A lot of people don't realize that our entire financial system is eventually consistent. They think that when they go to an ATM and withdraw money, it's instantly gone from their account. The reality is that in most cases the convergence is so quick it looks like it's instantly gone, but it's not. For example, if the ATM is unable to get your current balance, it will still complete the transaction. That's why your ca…

In a few places, you can see traces of this aspect of the system. For example, some gas pumps put a $150 "hold" on your card, and on your bank's web site, you may be able to see "pending" transactions that are in some not-quite-final state.

That’s a different thing: pre-authorization. It’s used for when you want to authorize some purchase before delivering the goods (that you later confirm once it’s delivered). The pre-auth is still done online for amounts above the card-offline limit.

The nicer feature of preauth is that you can confirm a lower amount. So in the case of a gas pump, they first have to make sure you have the money, without knowing how much, because you haven’t pumped it yet. Once you finish, then they know the amount, and confirm the transaction at a lower amount.

Re: Offline card payments should be possible no later than 1 July 2026

#389

Back in the day, we used these machines to take a paper imprint of the card. You would get a copy and give it to the bank. There was a phone number you could ring to check if the card was valid. I never phoned the number. https://en.wikipedia.org/wiki/Credit_card_imprinter

Similarly in the UK we had the concept of a 'cheque guarantee card'. Present your Barclays plastic card along with a paper cheque up to some value (£50 rings a bell; I was too young, it was my mam doing the transacting) and that cheque is guaranteed by the bank.

https://en.wikipedia.org/wiki/Cheque_guarantee_card

Re: Offline card payments should be possible no later than 1 July 2026

#390
post #9

It's not about paying by cash but paying by card offline. How is this going to be implemented I wonder. On planes they often accept credit cards even when there's no internet. I assume this is a trust in-credit-based system because they don't accept debit cards, i.e. if you are worth being trusted with a card you can have your sandwich now and we will take care of the bank processing once we are on the ground. So may…

Restaurant POCs have an offline mode. They had to ask my zip code so I suppose it just counts as a "card not present" transaction that goes through later. Does present the question of whether that data is temporarily stored unencrypted or if it's immediately encrypted to be sent to the bank when it comes online

That sounds like security theater.

What would asking for the ZIP code help if it can't be validated on the spot? If the terminal submits the transaction in batch later, it's too late for that to catch a stolen card.

Providing an incorrect ZIP code also makes the transaction more likely to be declined than not providing one at all for card-not-present transactions (and is also allowed), so it really makes no sense for a merchant to do that.

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