Forced Settlements

Learn about what forced settlements are and how to identify them

A forced settlement is a form of offline transaction processing that is capable of bypassing the typical transaction authorization process by allowing merchants to manually enter an authorization code into a credit card machine.

The most common use of this is in POS systems because merchants sometimes need to accept offline transactions and it would not be feasible to block offline transactions entirely. An example of a legitimate forced settlement is as follows:

  • A customer wants to buy some items and takes them to the counter to pay
  • The customer attempts to pay using their credit card, but their card is declined
  • The employee knows this customer is legitimate and have the ability to force a transaction
  • The employee or customer calls the issuing bank and receives an authorization code
  • The employee enters the code into the POS machine and marks the sale as "forced"
  • The employee leaves with their items
  • The transaction is settled when the POS system syncs with the payment network.


Forced settlements are not localized to POS systems only, any merchant is capable of performing forced settlements

It is possible for forced settlements to be fraudulent. In these events, the merchant will only know if a forced settlement succeeded when it is eventually processed.

Identifying Forced Settlements

Since forced settlements bypass the typical transaction authorization process employed by Penny (see Transaction Authorization they will not be received by your authorization webhook and will come through regular webhooks as a typical settlement event.

To tell if a settlement is forced, you need to look at the transaction_token field of the transaction event. If the transaction_token is XXXXXX, the transaction is a result of a forced settlement.