Online vs offline may seem like 2 generic terms but there are amongst some of the most confused terms in payments. They mean different things, whether you talk to a customer, a product expert or a commercial person… No pun intended😁😅!
Understanding payments is all about grasping the nuances and applicable context so let’s clear this:
𝗢𝗻𝗹𝗶𝗻𝗲 𝘃𝘀 𝗢𝗳𝗳𝗹𝗶𝗻𝗲 𝗖𝗵𝗮𝗻𝗻𝗲𝗹𝘀
◾The online and offline channels generally refer to Card-Not-Present (CNP) transactions for online activities and Card-Present (CP) transactions for in-person, offline purchases.
◾ A CP transaction is one where the #electronicdata is captured at the time of the sale through mag stripe, EMV, contactless, Apple Pay.
◾All other type of transactions are deemed CNP even if the customer is physically present with the card at the time of the transaction, for example when the card is keyed into a terminal it is effectively a CNP transaction or in industry jargon a MOTO transaction [ Mail Order Telephone Order].
𝗢𝗻𝗹𝗶𝗻𝗲 𝘃𝘀 𝗢𝗳𝗳𝗹𝗶𝗻𝗲 𝗔𝘂𝘁𝗵𝗲𝗻𝘁𝗶𝗰𝗮𝘁𝗶𝗼𝗻
◾Also referred as #EMV PIN online vs offline.
◾ In the offline PIN scenario, the card actually stores the PIN securely on the chip itself, so the verification can occur through static or dynamic data authentication between the card and the terminal.
◾The online authentication uses dynamic cryptogram to verify a transaction through to the issuer.
𝗢𝗻𝗹𝗶𝗻𝗲 𝘃𝘀 𝗢𝗳𝗳𝗹𝗶𝗻𝗲 𝗔𝘂𝘁𝗵𝗼𝗿𝗶𝘀𝗮𝘁𝗶𝗼𝗻
◾An authorisation is when the merchant submits a transaction request to the issuing bank (cardholder’s bank), who will determine if the transaction should be approved or denied. The issuing bank will decide after verifying that the cardholder has the appropriate funds or credit in their account.
◾The authorisation request can be decisioned by the issuer/processor/scheme and is deemed to be an online transaction. Offline transactions usually are those not authorised. These could be transactions approved by the chip or any transaction that goes straight to clearing without going through authorisation first.
◾𝗦𝘁𝗮𝗻𝗱-𝗶𝗻 𝗽𝗿𝗼𝗰𝗲𝘀𝘀𝗶𝗻𝗴 is a service provided by the card schemes, in which they act on behalf of the issuer in the authorisation decision making at times when the processor is unable to authorise the transactions.
👉🏽#Paymentexperts, any perspectives to share on #online vs #offline #payments and #transactions🎤?
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𝑾𝒐𝒏𝒅𝒆𝒓 𝒘𝒉𝒐 𝒘𝒆 𝒂𝒓𝒆?
𝘞𝘦 𝘢𝘳𝘦 𝘢 𝘵𝘦𝘢𝘮 𝘰𝘧 𝘗𝘢𝘺𝘮𝘦𝘯𝘵𝘴 𝘚𝘵𝘳𝘢𝘵𝘦𝘨𝘪𝘴𝘵𝘴 𝘣𝘭𝘦𝘯𝘥𝘪𝘯𝘨 𝘰𝘶𝘳 𝘪𝘯𝘥𝘶𝘴𝘵𝘳𝘺 𝘦𝘹𝘱𝘦𝘳𝘵𝘪𝘴𝘦 𝘸𝘪𝘵𝘩 𝘢 𝘤𝘳𝘦𝘢𝘵𝘪𝘷𝘦 𝘢𝘱𝘱𝘳𝘰𝘢𝘤𝘩 𝘵𝘰 𝘢𝘴𝘴𝘪𝘴𝘵 𝘰𝘶𝘳 𝘤𝘭𝘪𝘦𝘯𝘵𝘴 𝘵𝘩𝘳𝘰𝘶𝘨𝘩 𝘊𝘰𝘯𝘴𝘶𝘭𝘵𝘪𝘯𝘨, 𝘚𝘵𝘳𝘢𝘵𝘦𝘨𝘺, 𝘙𝘦𝘴𝘦𝘢𝘳𝘤𝘩 𝘢𝘯𝘥 𝘛𝘩𝘰𝘶𝘨𝘩𝘵 𝘓𝘦𝘢𝘥𝘦𝘳𝘴𝘩𝘪𝘱 𝘱𝘳𝘰𝘫𝘦𝘤𝘵𝘴.
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