Closed-Loop vs Open-Loop payments for music festivals and live events
There has been a long-standing debate amongst event industry professionals about what type of payment system is better – Closed-Loop or Open-Loop?
The fact of the matter is that there’s no blanket answer due to the live event industry having such a huge range of different types of events within it. Music festivals alone range from small boutique events in a fixed venue on a single day, to the multi-day mega events with hundreds of thousands in attendance.
Trying to blanket the entire industry with one declaration as to which system is best would be a crime, so instead this article will explain:

Closed-Loop Payments
Advantages of Closed-Loop
Disadvantages of Closed-Loop
Open-Loop Payments
Advantages of Open-Loop
Disadvantages of Open-Loop
Which events should use Open-Loop payments
Which events should use Closed-Loop payments
What are Closed-Loop payments
A closed loop payments system operates without intermediaries (banks), where end users (event attendees and vendors) instead directly join the payments system.
A real-world example of a Fortune 500 company using a closed-loop payment system is Starbucks. They launched a Mobile Payment and Rewards program that also had features that allowed their customers to place, order and pay for coffee in advance, and then pick it up at nearest location. In order for consumers to use new payment functionality, they had to load money onto their Starbucks Mobile App and use it at the time of checkout for payment processing.
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Adam Parry
Event Industry News
7th June 2018


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