Offline debit card

What is an offline debit card?

An offline debit card is an automatic payment card, similar to a traditional (online) debit card, that allows cardholders to pay for goods and services directly from their bank account. Since it is not “online”, there is a delay before the incurred charges are debited from the account, and it does not require a PIN to use. This is similar to writing a check. These types of cards are not common in the US, but are available in some countries. Offline debit cards can also be called “check cards”.

key takeaways

  • Offline debit cards are not connected to the online system when used. Therefore, funds are withdrawn from the account after 24 to 72 hours.
  • Offline debit card use does not require a PIN code, just a signature, which can be compared to writing a check.
  • Offline debit cards are primarily used for payments and cannot be used to withdraw or deposit funds at ATMs.
  • Card network providers such as Visa and Mastercard sponsor offline debit cards.
  • Debit card overdraft fees and refund fees also apply to offline debit cards.

How Offline Debit Cards Work

Offline debit cards work similarly to traditional debit cards, but can also be compared to the process of writing a check. Offline debit card transactions debit the cardholder’s bank account with processing delays and require only a signature instead of a PIN.

Offline debit cards are issued by banks in partnership with card processing providers such as Visa or Mastercard. These cards are linked to the customer’s bank account and are used for payments and cannot be used for withdrawals or deposits from ATMs.

Offline debit card transactions

Offline debit cards typically have lower maximum daily limits than standard debit cards. If this is not the case, the maximum amount is based on funds held in the underlying bank account. Because the debit card is “offline”, it does not have direct access to the bank account, which means there is a 24 to 72 hour delay before the purchase amount is debited from the account.

Users of offline debit card transactions still need to be wary of returning payment fees and overdrafts. While the processing times and services of offline debit cards are different compared to traditional debit cards, the impact on underfunded payments remains the same. Account holders may be charged an overdraft fee for each underfunded transaction made with an offline debit card. In some cases, vendors that offer initial acceptance of offline debit card payments that are not fully authorized at checkout may also incur a returned payment fee.

Offline debit card transactions do pose a risk to suppliers as they are not sure if the transaction will be fully completed until a few days later it is processed and accepted. Vendors are vulnerable to certain risks because the customer can charge the amount but the card may be invalid or have no funds or the transaction may be declined for some reason.

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