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Apple Pay, Paypal, Purpl: Open or Closed Loop Digital Wallets?

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Digital wallets have become a crucial aspect of our daily routines in this fast-paced digital era. They have transformed the way we handle financial transactions and manage our finances. Two primary types of digital wallets dominate the market: closed loop and open loop. Understanding the difference between these two systems is crucial to make informed choices about which one suits your needs best.

Closed Loop Digital Wallets:

Closed-loop digital wallets, also known as single-purpose wallets, cater to use within a specific merchant’s ecosystem. These wallets restrict transactions to the issuing company or a select group of connected merchants. They are highly convenient for loyal customers who frequently patronize the same retailer or service provider.

The primary advantage of closed-loop wallets is their seamless integration with the merchant’s loyalty and rewards programs. Users can accumulate points or rewards for their transactions within the ecosystem, encouraging repeat business. Additionally, closed-loop wallets often offer exclusive discounts or promotions, enhancing the overall customer experience.

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Examples of Closed Loop Digital Wallets:

Starbucks Rewards – Starbucks’ digital wallet allows customers to use it within their chain of coffeehouses. It allows them to load funds, earn stars, and collect their reward points. Users can make purchases and redeem rewards, all within the Starbucks app.

PayPal – PayPal is one of the most popular closed loop digital wallets. This means that the sender and the receiver should use Paypal to transact. On top of that, Paypal also has it’s own payment platform for consumers and merchants.

Venmo – Owned by PayPal, Venmo has gained popularity as a peer-to-peer (P2P) payment app. It allows users to send and receive money among other Venmo users making it the go-to app to split expenses and share a bill.

Open Loop Digital Wallets:

Open-loop digital wallets also referred to as multi-purpose wallets, offer a more versatile payment experience. They facilitate transactions across various merchants and locations, making them widely accepted and ideal for everyday use.

The key advantage of open-loop wallets is their interoperability. Users have the ability to connect various payment sources, like bank accounts and credit cards to their wallets. This turns the digital wallet into a central location for all your financial activities. This versatility provides a more seamless and efficient payment process, regardless of the merchant or platform.

Examples of Open Loop Digital Wallets:

Apple Pay – Apple Pay is an example of a mobile wallet that offers contactless payment options. It enables users to make purchases both in-store and online at various retailers. Apple Pay connects to a user’s credit card or bank account. Moreover, it allows users to pay using iPhones, iPads, and Apple Watches.

Google Pay – Google Pay is similar to Apple Pay. It allows Android users to make contactless payments at brick-and-mortar stores and online platforms. It leverages near-field communication (NFC) technology for secure and speedy transactions. Just like Apple Pay, Google pay is also connected to a user’s credit card or bank account.

Samsung Pay – Samsung Pay is another open-loop digital wallet that works with compatible Samsung devices. It supports contactless payments as well as traditional magnetic stripe card readers, making it more widely accepted. Samsung pay also offers rewards and cashback to its users.

Purpl, a remarkable open-loop wallet in Lebanon

Purpl stands out as a remarkable open-loop wallet in Lebanon. Acting as an aggregator for remittance partners, cash-out partners, and merchants, Purpl provides its users with unparalleled versatility and convenience. Purpl aims to become the hub of all financial activities of its users.

As a matter of fact, Purpl reflects this open ecosystem in its logo. The letter P, which obviously represents Purpl, connects to an infinity symbol indicating a loop. However, the infinity symbol is not entirely connected, portraying the open-loop ecosystem that Purpl is nurturing in Lebanon.

Purpl sets itself apart from other digital wallets with its exceptional feature: the capability to cash out funds in USD. In response to Lebanon’s severe economic crisis, Purpl introduced cardless ATM cash withdrawals, providing users with a lifeline during times of extreme currency instability. What makes Purpl truly unique is its commitment to safeguarding users from the detrimental effects of currency fluctuations, ensuring that they can access their funds in the stable and widely accepted currency in Lebanon.


In summary, the choice between closed-loop and open-loop digital wallets depends on your specific payment preferences and habits. Closed-loop wallets excel in loyalty programs and exclusive perks within a specific merchant’s ecosystem, making them attractive to frequent patrons. On the other hand, open-loop wallets offer greater versatility and broader acceptance. This makes them ideal for everyday transactions across various merchants and locations. Purpl is creating an open loop ecosystem in Lebanon to empower and enable users to perform everyday transactions in a breeze.

Written by: Mayssa Abillama

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