Open loop

The terms “closed loop”, “open loop”, “restricted open loop” or “semi-closed loop” are not at all used uniformly in practice. Colloquially, these terms are used to describe in more detail card systems with regard to their card acceptance.

Open-loop cards are payment instruments that can be redeemed at a large number of different merchants. “Open-loop cards” therefore involve a card issuer and a large number of acceptance points. Examples of such open-loop cards are prepaid credit cards issued by the major credit card organisations Visa and MasterCard. As the terms are not very precise from a legal perspective, they should not be used to make statements about the admissibility of card systems under applicable supervisory laws.