![Crypto Terms Glossary: What is Closed Loop Payment Network? Crypto Terms Glossary: What is Closed Loop Payment Network?](/img/176/274/what-is-closed-loop-payment-network-sm.webp)
Closed loop payment networks are those in which a consumer loads money into an account that can only be used with specific merchants, whereas open loop payment networks allow consumers to use money stored in a centralized wallet for multiple merchants. Closed loop networks cut out several middlemen in a payment's transaction, reducing transaction fees and speeding up settlement.