If you swipe a card and their backend errors out or is unreachable, it does prompt you to switch to offline mode (as long as you're already logged in and have taken online transactions recently).

If a customer knows the payment processor is offline, they can use an invalid card and it will appear to go through. Merchant will be stuck with the liability after the transaction is later sent and declined.

Offline mode is great for when the shops WiFi or local provider is having connectivity issues. The Square software and reader queue card swipes and transactions along with tip and receipt information until a connection is reestablished. You can just keep ringing people up.

Today, we went into offline mode automatically and processed a few transactions. Then our app was forcibly logged out of Square service and we couldn't get back in to continue in offline mode.

AFAIK offline mode only works if you have successfully completed a non-offline transaction within the last 24 hours.

According to the docs on offline mode if the card is declined for any reason you as the merchant is on the hook. And those payments will attempt to process when their service is restored .

Offline mode is only available if your already logged in.