How do offline signature-based debit cards function?

Offline signature-based debit cards operate by allowing transactions to be authorized with a signature rather than requiring a PIN. This method is particularly useful in situations where the cardholder is not able to enter a PIN, such as in a retail setting where the transaction is conducted away from an online network or terminal. When a customer makes a purchase with an offline signature-based debit card, the card does not immediately deduct funds from the account; instead, it holds the funds for the initial transaction and settles the amount later through batch processing.

This means that when the transaction is completed, the merchant can confirm the payment based on the signature, and the card issuer will process the transaction at a later time. This method allows for quicker transactions without the need for constant online connectivity to authenticate the payment in real-time. The settlement process follows, wherein the funds are transferred from the cardholder's bank account to the merchant's account.

In contrast, options such as requiring a PIN for every transaction do not apply to offline signature-based debit cards as they utilize signature verification instead. Similarly, being limited to online purchases does not pertain to these types of cards, as they can be used in physical locations that accept them. Finally, while these cards do provide access to funds, their primary