Store-and-forward mechanism implemented for offline transaction processing is and important solution allowing a merchant to process transactions in the cases when this merchant experiences connectivity problems with the processor’s application.

Store-and-forward mechanism originates from the times when modems were introduced into credit card processing scheme and connectivity problems happened rather frequently.

The mechanism works as follows. If connectivity with the processor’s application is broken (usually, due to some errors), transactions are stored at the merchant’s end, while a “fake” transaction approval confirmation is generated in order to let the customer understand that the transaction is getting through, no matter what the problems are.

Although there is a risk that transactions, which are stored for further processing, will get declined after they are re-attempted (re-submitted), in most cases they do get approved.

Store-and-forward solution can be implemented both at the level of an individual payment terminal, and at the level of a payment gateway. Offline processing is most commonly used by e-commerce industry representatives. However, retail businesses also utilize offline processing, although, in order to minimize the fraud risks, associated with card-present transactions, they use it on smaller transaction amounts.

More information on store-and-forward mechanism and offline processing can be found in the respective article “Offline processing” on Paylosophy.com blog.