While the eCommerce landscape is continuously shifting, the search for payment solutions that are both convenient and secure remains a constant. Closed-loop wallets have proven themselves to be a game-changer in this regard and have quickly become an indispensable tool for merchants and aggregator platforms.
This guide is here to shed light on the advantages of such digital wallets and explain why their use in the eCommerce industry is only expected to grow.
For instance, some renowned examples of open-loop wallets include:
In contrast, some closed-loop wallets you have probably heard of or used are:
More and more eCommerce companies nowadays are beginning to implement such wallets for the sake of enabling users to store and use funds exclusively within their platforms. In fact, closed-loop transactions are expected to account for over 50% of digital payments already by 2030. But what are the reasons behind such a rapid upward trend?
Closed-loop wallets are taking the world by storm, and many agree that they will soon become a must-have not only for large-scale businesses in the eCommerce sphere but also for SMBs. Here are some of the key factors driving this increasing demand:
Finally, closed-loop wallets also offer merchants plenty of opportunities to introduce loyalty programs and rewards, such as cashback, discounts, or bonus points, which, in turn, incentivize users to return to their stores.
This is extremely important, as 65% of an average company’s revenue typically comes from returning clients, and 84% of consumers are likely to stick around a brand that offers a loyalty program.
While closed-loop wallets offer numerous advantages for eCommerce merchants, it’s essential to understand the potential drawbacks related to their implementation. Here are some aspects to keep in mind:
However, despite these concerns, it is safe to say that the advantages of closed-loop wallets outweigh the downsides linked to them.
All in all, closed-loop wallets offer significant advantages, which makes them an increasingly important solution for staying ahead of the game in an increasingly competitive eCommerce landscape.
While many small and medium businesses selling their products and services online can still get by without implementing such systems, most large-scale companies already see them as indispensable. However, as the digital payments landscape continues to evolve, the demand for closed-loop wallets is forecast to grow, making them an integral part of virtually any eCommerce merchant’s toolkit.
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