As a business owner, you are probably familiar with the terms "open payment systems" and "closed payment systems". But do you know the difference between them? And, more importantly, do you know why your business should accept both?
Open payment systems mean transactions that can be used anywhere the payment network is accepted. For example, Visa, Mastercard and American Express are all examples of open payment systems. Closed payment schemes are payment methods that can only be used at a specific chain or brand. Examples of closed payment systems are prepaid cards, proprietary apps and meal vouchers.
Offering both types of payment methods allows you to reach every customer who wishes to shop with you. You have the option to offer your customers their preferred payment method and you can also let them choose their preferred payment method in real time. This gives the customer a sense of control and improves the overall customer experience.
Convenience for the customer
By offering both open and closed payment systems, you give your customers more flexibility in choosing the payment method that suits them best. Some customers may prefer to use their credit card or mobile wallet, while others may prefer alternative payment methods, especially when they are in places like workplaces or universities.
Employers or universities offer their employees or students meal vouchers or benefit cards to pay for snacks, coffee, electric car charging, parking and other purposes. This benefit program can either be topped up by the company or the user and offers operators an interesting opportunity to create loyalty programs. For example, if you have vending machines in an office building, you can offer a more favorable pricing structure for employees who pay with their employee IDs compared to visitors who use their credit cards.
This keeps employees shopping with you because they get a better price, but also allows anyone passing by to quickly purchase an item with a simple tap of their credit card. By accommodating all payment types, you make it easy for customers to shop with you.
Increase your revenue
Accepting closed-loop payment systems, such as employer benefit cards, can increase your sales revenue. Customers whose benefit cards are funded by their employer tend to prioritize the use of this payment method before considering other payment options. In many cases, they also spend more than they would have on the original card, resulting in increased sales for your business. In addition, closed-loop payment systems have the potential to attract new customers who would otherwise not have chosen to shop with you. Now you offer them a convenient option to spend their money with your business.
Gain a competitive advantage
By accepting both open and closed payment systems, your business can create a competitive advantage over other businesses that only offer a limited payment method. Customers prefer to shop with companies that give them flexibility in payment options, especially if they can use their favorite payment method.
In areas where EV charging is available, this is particularly important. Most charging station facilities today require the driver to download an app or subscribe to a service in order to pay for charging. A charging point operator (CPO) that offers both open and closed payment systems has the opportunity to benefit from customers who spontaneously or temporarily need to charge their vehicles quickly and conveniently.
In conclusion, accepting both open and closed payment systems can be beneficial for your business. By offering multiple payment options, you can increase your sales and improve the customer experience. With VP Salestech's payment technologies, you can integrate over 80 different payment methods, giving you flexibility and competitive advantage. Contact us today to learn more about how our payment solutions can help your business grow.
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