What Are Offline Payments? How to Accept Them

Reliable internet is important for any retail operation. But what happens if the connection fails?

Offline payments come in to save the day, letting merchants continue accepting card payments even during internet outages. It doesn’t matter whether you’ve got spotty internet at a pop-up event or a power outage in-store, offline payments keep the cash flowing into your business. 

Learn how payment systems have evolved to handle offline payments, and how they work with Shopify POS. 

What are offline payments?

Offline payments let you accept card present payments even when the internet fails by storing the transaction details on your card machine until it reconnects.

Old payment systems only worked online or offline, not both. New payment systems can work either way. Stores can still take card payments even when the internet is down. When the internet comes back, all payments are processed automatically.

Common scenarios include:

• Your store’s internet goes down, but you still want to take cards
• You’re selling at a pop-up shop or events where internet is spotty
• Your router needs a restart, but you don’t want to stop taking payments
• Your mobile hotspot has a weak signal or runs out of data
• You lose internet during a power issue, but your card reader still works

This helps many businesses, especially stores with bad internet or those that move around to different locations. Customers can always pay by card, and stores never lose a sale due to connection issues.

How offline payments work

When your card reader loses internet connection, offline payments let you keep taking cards. Here’s how:

1. Your card reader saves the payment info directly on the device
2. The payment won’t be checked right away since there’s no internet
3. All saved payments process automatically when the internet returns
4. If any cards get declined, you can contact the customer to try a different payment

It’s smart to get customer contact info when taking offline payments, just in case you need to reach them later. But you can’t accept all types of payments offline. 

For example, with Shopify, some things that don’t work offline are:

• Card swiping and manual card entry
• Gift cards
• Tap to Pay (iPhone and Android)
• Customer search
• Adding tips to card payments
• Some local payment types like Interac (Canada) and EFTPOS (Australia)

The business case for offline payments

Your business can keep running smoothly even when the internet fails. Since many customers use cards instead of cash, you won’t lose sales during outages.

Customers get a smooth checkout experience and won’t notice any problems on your end. When you can handle issues without disruption, they’ll trust your business more.

When the internet is down, Shopify lets you keep making sales for up to 24 hours. Some other systems only give you 6-12 hours, while some give you more than 24 hours. If you do not reconnect and sync within this period, you risk being unable to process those transactions, and you may lose the ability to accept additional offline card payments until you reconnect

Shopify chose 24 hours because it gives you enough time to fix internet problems without risking too many declined payments. To protect your business when offline, Shopify has two main limits:

1. How much you can charge in a single sale
2. How many total offline sales you can make before needing internet

You can adjust these limits based on your business. For example, if you sell expensive items, you might set higher limits. If you run a smaller shop, you might prefer lower limits to be safer.

How to process offline payments

1. Get the right POS hardware
2. Set up offline payments
3. Give staff permission to accept offline payments
4. Set payment limitations
5. Accept the offline payment
6. Reconnect your POS to the internet

1. Get the right POS hardware

Check if your payment device can work without the internet before using it offline. 

From a technical standpoint, the retail POS must be designed to handle local data storage and secure encryption of card information. For Shopify POS users, offline payments are available in version 9.14.0 or later.

2. Set up offline payments 

In your Shopify admin: 

1. Go to Point of Sale > Settings.
2. Click Offline Payments.
3. Turn on Accept offline payments.
4. Click Save.

After doing this, your Shopify POS app will be ready to accept debit and credit card transactions even without an internet connection.

3. Give staff permission to accept offline payments 

Offline payments start turned off for your staff. You can turn this on for specific staff members by giving them permission to “Accept offline credit and debit payments.”

4. Set payment limitations

You can then set transaction and device limits, which helps manage risk by preventing very large transactions from being stored offline.

For example, say most of your customers spend between $50-100 per visit. Set a $150 to give them enough room to buy a few items and protect your business from high-value declined payments.

For purchases over $150, you can either:

1. Split it into smaller transactions
2. Accept cash instead
3. Wait until your system is back online

Consider setting your card reader’s offline limit to $1,000. Say your store typically makes $2,000 per day, a $1,000 limit lets you keep selling through short internet outages of 1-2 hours. 

Once you hit $1,000 in offline sales, reconnect to the internet and process those payments before taking more card transactions.

5. Accept the offline payment

Ideally, you want to collect a phone number or email from customers when you make an offline sale. If a payment gets declined, you can easily reach out to them. 

To accept payments on Shopify POS:

1. Tap Offline checkout to start the payment process.
2. Have the customer tap or insert their card on your compatible reader.
3. Tap Done to finalize the sale. 

A receipt will be sent automatically when you reconnect if an email or phone number was captured.

6. Reconnect your POS to the internet

When internet returns, your system will automatically process all offline payments. Good payments will show as “Paid.” If any are declined, you’ll see “Payment declined” and will need to contact those customers. 

Enable offline payments with Shopify POS

When you lose internet, offline payments let you keep making sales. But be careful, since payments can’t be checked right away, there’s a higher risk of fraud. To stay safe, get back online quickly, get customer contact info, and set limits on offline purchases.

Shopify POS makes offline payments easier by storing payment info securely on your device. Once you’re back online, all transactions sync automatically to your Shopify dashboard and you can carry on making sales.