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Offline card payments

With deferred debit payments, debit transactions are temporarily stored offline in the merchant's payment terminal if an online connection is not possible, for example in the event of a telecom breakdown. Once the connection is restored, the stored transactions are still sent and processed.

Digital fallback option in case of failures

Deferred debit payments require an acceptor (a merchant) to enter into a separate contract; they are not supported by default in regular debit card agreements. Deferred debit payments can be deployed when the POS terminal temporarily has no online connection, usually in the event of a telecoms failure or a transaction processor failure.

For whom?

Deferred debit payments are particularly interesting for large acceptors where it can get very busy at the checkout, such as supermarkets, DIY stores and busy events. Deferred digital alternatives such as mobile payment requests, QR payments and immediate transfers are not (yet) fast enough at busy times.

Deferred debit card payments are used at busy festivals and events, among other places. Mobile payment terminals are used there and there is an increased risk of local and temporary overloading of mobile networks. In the event of such an outage, festival and event visitors can then still smoothly continue to pay digitally.

For smaller entrepreneurs, the aforementioned cashless fallback options do provide a good low-threshold digital fallback option if regular debit card payments are temporarily not possible.

Risks and challenges

A deferred debit card payment has a (clear) financial risk for merchants. Because the cardholder’s bank can only check and approve the payment afterwards, it may still reject some payments – for example, in case of insufficient balance or a blocked debit card.

Offering and using deferred debit payments requires investments from several participants in the payment chain:

  • Business owners need to have the software on their POS systems and payment terminals modified and their staff trained.
  • Acquirers (PIN service providers) and terminal suppliers need to make their systems and payment terminals suitable for deferred processing.
  • Not all types of payment terminals support deferred debit payments, which can create barriers to implementation.

Role of the Payments Association

Betaalvereniging Nederland is closely involved in standardisation and joint communication on digital fallback options in general and deferred debit card payments in particular. Although no special collective infrastructure is needed for deferred debit card payments, good coordination between acquirers (PIN service providers), transaction processors and acceptors remains essential.

Deferred debit payments can benefit from a social arrangement system, especially for crisis management and reduced reliance on cash in case of failures.

We are exploring with our members how to further develop and roll out this digital fallback option in case of failures. In doing so, we are looking at:

  • technical feasibility;
  • legal and regulatory frameworks;
  • information to entrepreneurs and consumers;
  • positioning within the broader range of fall-back options.