Offline debit system is another mode of payment through which debit card transactions are processed. Also known as signature debit, the major difference present between online and offline debit systems is the fact that the customer does not have to enter the personal identification number while using an offline payment channel.
The processing of payments in an offline debit system is quite similar to credit card payments.When the customer makes some purchase at a departmental store or any other retail outlet, the debit card is to be handed over for payment. The merchant then swipes the debit card through the payment terminal and the amount to be paid is sent in the process. A sales draft has to be signed by the customer in order to authorize the merchant to charge the required bill amount on the registered check in account.
This is the way in which the offline debit system works when the payment is done in the physical presence of the customer. When it comes to pay through this system on the internet, the card holder has to enter the information regarding the debit card in an online form. The provided data is captured using transaction processors and is encrypted so that the security is maintained. The data is then sent across the processing networks for authorizing of the payments. In both these cases, the transaction takes two or three business days for settlement and then it is reflected on the car holder’s account.
In most of the cases, a debit card payment made through an offline debit system is processed through the same networks that are used for processing credit card transactions. So, the transaction fees and discount rates applied can be based on the similar lines of credit cards. In case of offline debit system, the merchant has to incur more charges for every transaction as compared to the online system.