Methods of Processing Closed Loop Gift Cards

Processing closed-loop gift cards as a merchant or a payment gateway company can be done in one of two ways, either independently or through a third party.  Closed-loop gift cards are gift cards that can only be used at a specific vendor or family of companies.

The third party method involves using an outside party, such as your bank, a gift card vendor, or a credit card gateway service that is responsible for issuing the gift cards and managing the acquiring aspect.  These cards can be white-labeled by the merchant with the business logo or other design if desired.  The advantage of this method is that it is simpler to connect with the issuer than to integrate the necessary functionality into the existing system.  

The second method is a bit more involved as it requires implementing the functionality needed to issue and process the gift cards.  The obvious advantage of this method is there are no payments to be made to an outside processor.  A second primary advantage is that the merchant is entitled to all unclaimed funds that remain on the cards.

To find out more about closed-loop gift card processing and e payment gateways, visit #UniPayGateway for more detailed articles on the topic. Also, additional information is provided at #Paylosophy blog.