Payment systems are a hot topic for the development sector but the jargon can be overwhelming. Devex has your quick guide to making sense of the two main options.
When thinking of open loop payment systems, think of credit cards.
Open loop systems enable payments to be made at many different locations from a centralized digital wallet that is connected to personal account information. Money can be spent in advance; it does not have to exist in the account for payment to be approved. These systems enable payments to be made or goods to be purchased from a wide variety of merchants.