Open-loop vs closed-loop gift cards: where each can be spent
By SendPay Business · · 2 min read
Gift cards come in two main kinds. A closed-loop card can only be spent with the brand or group that issued it. An open-loop card carries a card network logo, such as Visa or Mastercard, and can be spent almost anywhere that brand is accepted.
Closed-loop gift cards
- Issued by a shop, restaurant chain or shopping centre.
- Only work at that business or its partners.
- Bring customers back through the door, often spending more than the card's value.
- Run on the business's own systems or a gift card provider's.
Open-loop gift cards
These are prepaid cards issued by a regulated card issuer on a card network. They are more flexible for the person receiving them, but usually carry a purchase fee and sometimes expiry dates or inactivity fees, which should be clear before buying.
What businesses weigh up
Closed-loop cards keep spending in-house and are simpler to run. Open-loop cards suit corporate rewards and incentives, where the giver wants the recipient to choose. Either way, clear terms on expiry and balance checks build trust.
Where SendPay fits
SendPay platforms let you give customers branded Visa cards alongside GBP, EUR and USD accounts, transfers, payment links and invoices, powered by licensed partners. SendPay doesn't offer card machines or acquiring.
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Pick a template, name it, brand it, preview every page before you pay. Your brand, your users, your fees.
Build my platform →Questions people ask
What does a prepaid card cost in a year?
Add up its fees with the free calculator.
Prepaid card cost calculator →What is a prepaid card?
A card loaded with money in advance rather than linked to credit.
Prepaid cards →What is a card scheme?
A network such as Visa or Mastercard that connects card payments.
Card schemes →Read next
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.