Closed-Loop Mobile Payments: All You Need to Know!

Posted by Parija Rangnekar On Filed under Mobile App Development, Offshore Software Development No Comments
Closed-Loop Mobile Payments: All You Need to Know!
Closed loop payment system
Executing payments via digital wallets/ Mobile payments solutions have become the order of the day owing to the emerging digital technologies and an increasing dependency on smartphones.
According to a research report published by the online portal, Mordor Intelligence, “ The market value of mobile payment systems was 1449.56 Billion USD in the year 2020. The mobile wallet market is expected to grow at a CAGR of 24.5% during the next few years and the market value is predicted to reach 5399.6 Billion USD by the year 2026 ”.
Digital wallets have transformed the manner of making payments altogether. The two major categories under this type of payment methodology are open loop and closed loop mobile payments. The open-loop payment system involves using a single digital wallet via smartphones for making payments at several locations. Closed-loop mobile payments, on the other hand, requires prepaying a certain amount of money to one specific merchant or business brand just like using loyalty/gift cards at an apparel store or an eatery.
Out of these two mobile payment categories, the closed-loop approach is more preferable by merchants as well as consumers. In fact, the closed-loop payment model has revolutionized mobile payment one step further and elevated it to the next level! Let’s gather some quick insights on closed-loop mobile payments and the business benefits of adopting this approach.

What is Closed-Loop Mobile Payment?

A closed-loop payment refers to the payment transaction wherein a customer uploads money into a spending account linked to a payment device, just like the functioning of a gift card. This kind of payment happens between a spending account and a particular business brand. The mobile equivalent of this payment system is termed closed loop mobile payment. A closed-loop payment system uses mobile apps for managing gift cards and accounts via smartphone devices. Closed-loop mobile payment solutions allow users to check their balance within the system, make purchases using a mobile app instead of a physical card, and top up their account balance effortlessly. Customers can make payments using mobile devices/tablets to a specific retailer against an established account balance. Some of these solutions even provide the option of automatic balance top-up.
Any branded mobile payment or loyalty solution falls under this category. The TimmyMe app by Tim Hortons and the Starbucks smartphone app are popular examples of the closed-loop mobile payment model.
What is meant by a Closed-Loop Card?
A closed-loop card, also known as a single-purpose card, is an electronic payment card which the cardholder can use for executing purchases from a specific brand. Such cards usually bear the logo of the company where it can be used instead of bearing the logo of a primary payment processor such as American Express, MasterCard, Visa, etc.

Benefits of Closed-Loop Mobile Payments



Closed-loop mobile payments
Identifying Customer Behavior for Creating Effective Marketing Campaigns
This mobile payment processing model helps entrepreneurs to capture big data based on millions of customer transactions and then, analyze this data for gaining deeper insights into the buying habits of consumers. Once, the businesses get a thorough understanding of their target market and identify the purchasing habits of their customers, they can create customized promotions/offers and deliver the same to customers’ mobile devices.
Greater Customer Outreach
Mobile technology simplifies sending out purchase reminders to customers via notifications. Moreover, businesses can even set up geo-targeted notifications which get triggered whenever potential consumers are close to their store.
Enhanced Customer Loyalty
The ability to send customized promotional offers and loyalty incentives to customers via smartphone devices not only helps in retaining consumers but also enhances their loyalty quotient.
Competitive Advantage
Using the closed-loop mobile payment model, customers enjoy several benefits like smartphone friendliness, automatic balance top-up, the option of pre-ordering for avoiding line-ups, being able to consolidate several gift cards, and many more. This makes your brand the obvious choice for customers.
The exclusive nature of a closed-loop mobile payment system enables business brands to monopolize customers’ smartphone devices concerning services and products within their niche.
The aforementioned advantages help businesses gain a competitive edge over peers.
Higher Profits
When users add money to fund their mobile wallet apps or e-gift cards, it implies that they have technically spent money within your store. Furthermore, if customers fail to use up their remaining balance, you gain extra profit.

Why should Business Brands Adopt the Closed-Loop Mobile Payment Approach?

It’s high time businesses should adopt the closed-loop mobile payment strategy. Take a look at the reasons!
  • Billions of individuals across the globe own smartphones. As such, your targeted audience is more likely to possess a smartphone device than your firm’s gift/loyalty card. Besides, modern tech-savvy consumers are on the lookout for ways and means that will allow them to link their payment wallets with mobile devices. And, the closed-loop approach perfectly befits this requirement.
  • Consumers express interest in this system due to the bar code scanning abilities of modern mobile devices.
  • Such systems promise improved security. This is because they are not tied into carrier networks, users’ credit cards, or bank accounts, thereby adding an extra security layer between the merchant and the bank account.
  • Closed-loop mobile payments are less complicated and easy to execute.
  • This approach proves profitable for vendors as it involves lower purchase fees in comparison to direct credit card transactions.


Concluding Thoughts:

A closed-loop mobile payment system proves profitable for the merchant as well as their consumers. Therefore, if you possess the necessary resources, commence the mobile app development process by partnering with reliable developers and a merchant service provider for architecting an impeccable closed-loop payment system.
Are you on the lookout for a dependable software firm for building a closed-loop mobile payment system for your business? Contact Biz4Solutions, a renowned Offshore Software Development Company in India, with 10+ years of experience in serving global clientele!

Wondering whether to Outsource Business Operations? Watch out for these signs!

Posted by Parija Rangnekar On Filed under Mobile App Development No Comments
Wondering whether to Outsource Business Operations? Watch out for these signs!
Offshore Software Development Company
Running a business enterprise is rewarding but overwhelming at the same time. This is the reason several business owners choose to outsource app development and other administrative functions.
Take a look at these interesting 2021 stats concerning outsourcing published by the online portal capitalcounselor.com.
  • The U.S. outsources approximately, 300,000 jobs every year
  • 70% of entrepreneurs outsource for reducing costs.
Outsourcing business operations have become a current trend and it has been observed that the offshore software development model is the most preferred option. However, the most intriguing question that baffles entrepreneurs is; “When is the right time to start outsourcing?” Well, this post answers it all.
Check out the obvious signs that indicate your business needs to adopt the outsourcing strategy.

Obvious Signs that indicate your Business needs Outsourcing

outsourcing company in India
Your Business is Expanding
When your market grows, your sales shoot up as well. This results in a rising demand curve and more work to be accomplished within a short period. But, catering to the larger volume of orders and delivering them on time, becomes a challenge if you are inadequately staffed. So, it’s high time you seek assistance from an outsourcing firm so that you are able to efficiently meet the rising demand while adhering to strict deadlines. Moreover, when you have a team of experts executing your voluminous tasks, you can invest more time and effort in promotional marketing and advertising your business.
Managing every function proving counterproductive
Several start-up business owners prefer managing every small operations starting from administrative and organizational tasks to customer service, all by themselves. And, since such companies possess a limited number of in-house employees, they end up spending a huge chunk of their time handling repetitive, time-consuming, and monotonous back-office tasks like HR administration, accounting, etc. These essential yet non-priority tasks, keep them from paying attention to core competencies and also suppress innovation. Nevertheless, such counterproductive chores can be easily delegated to outsourcing companies, while enterprises can focus on core business objectives that will facilitate growth and expedite revenue generation.
You are incurring huge expenses due to in-house team
Entrepreneurs hiring and maintaining an in-house team need to incur huge expenses and encounter loads of hassles like as below:
  • In-house workforce needs to be paid monthly remuneration and provided with other benefits like insurance, paid leaves, etc.
  • E-Commerce businesses without a physical store find it challenging to spend on office spaces and purchasing work equipment.
  • Small-scale businesses are likely to commit costly mistakes such as hiring incompetent/inexperienced employees or buying technologies and equipment that do not deliver a high ROI.
  • Large-scale firms end up spending a considerable amount of time and money in recruitment, training staff, and managing administrative/HR responsibilities and other back-office operations.
All these aforesaid challenges can be addressed by sharing your workload with an experienced outsourcing vendor. This is because you only need to pay the vendor for the specific services needed by your business, while all other expenses and hassle-prone activities are taken care of by the outsourcing partner. Moreover, outsourcing companies routinely train their employees so that their skills remain relevant and their services are up-to-date with the latest industry trends. So, the strategy to outsource tasks/projects undoubtedly saves time, effort, and expenses; regardless of the size and nature of your enterprise. Hence, consider outsourcing, if you need to reduce costs and speed up the time-to-market.
You are not equipped to fulfill a Specialized Task
During situations when your company is lacking in specialized skill sets needed for a particular project; there are three possible solutions. You can either train your employees to acquire that skill, or hire full-time professional/s well versed in that skill, or outsource your project to third-party vendors who can provide the specialized services you need.
Training in-house staff may sound productive, but at the same time, turns out to be time-consuming, and yet there’s no assurance that the work quality will be good enough to meet clients’ expectations. The second option – hiring staff – would be worth the investment, only if you are certain that your business will require that specialized skill on a long-term basis.
Outsourcing, on the other hand, sounds like a profitable option in terms of quality as well as delivery speed. Therefore, outsourcing is the most viable option when you have to execute short-term or unexpected tasks requiring specialized skills.
You are unable to adhere to Deadlines
How many of you have encountered situations as given below?
  • Your projects are running behind schedule and fail to get delivered on time.
  • Timely execution of tasks like accounting, regular website updations, etc. becomes difficult and cramming everything during the final moments becomes the norm.
  • You’re stressed that you hardly find adequate time in a day to realistically complete the necessary tasks.
The aforementioned scenarios are detrimental to your company’s goodwill. Furthermore, the pressure to meet deadlines is often nerve-racking and adversely affects the quality of your output. And, hiring an additional workforce may take you several weeks, which is not feasible if you have tight deadlines to meet. However, adopting the outsourcing strategy can be a huge relief as you can obtain adept professionals to whom you can assign responsibilities with immediate effect.
Your Sales are Plateauing
If your sales are plateauing and the root cause happens to be insufficient workforce and improper time management; outsourcing minor tasks or production functions will resolve your issue. This is because most outsourcing agencies specialize in specific industry verticals and domains, and so deliver premium-quality output.
It’s not possible to add New Services without Discontinuing the Existing Ones
There are times when you intend to offer a new service as per the latest trends that would prove advantageous to your clients. But, to your dismay, this plan wouldn’t work out due to the lack of enough time or workforce and you are on the verge of losing clients. And, if you add those services, you will have to make the tough decision to discontinue some existing services for accommodating the additional workload. Nevertheless, outsourcing can be the savior of such situations.
Your Customer Service is worsening
Customer service is a vital aspect that decides the success of a business enterprise. Whether it’s just sending periodic updates via emails to clients or more detailed interaction, it shouldn’t be ignored at any cost. This is because if you are too tied up with other responsibilities and unable to provide adequate attention to customers, they are likely to tail off to your competitors. Furthermore, your capacity to onboard new clients will sharply decline as well. The modern age customer behavior is such that if they are kept on hold for more than thirty seconds, or your instant messaging service is slow; they’ll desert your brand.
Outsourcing, on the other hand, will enable you to provide your customers with an enjoyable UX, and hence will help you in customer retention as well as attracting new ones.
Your Products/Services are vulnerable to Security Threats
Several modern-day businesses are vulnerable to cybersecurity threats such as ransomware, zero-day attacks, etc. Such attacks can cause monumental damage to the affected firms. To protect themselves from such a predicament, companies need to continually update their security systems. In many instances, firms are not adequately equipped to prevent and handle cyber-attacks. Well, in such cases outsourcing software operations to a prominent outsourcing agency are the most viable solution. The reason is specialized IT companies leverage the latest technologies like AI that will allow your security system to create protection layers autonomously. Besides, these agencies are well versed in the methodologies of adhering to security protocols. Thus, outsourcing can be the ideal solution for minimizing security threats.
You have to Fulfill Compliance Mandates
Businesses across certain domains like healthcare need to comply with national as well as international regulatory compliances concerning the protection and security of electronic data. And, the organizations that fail to comply with such mandates end up paying huge fines and tainting their reputation altogether.
Adhering to regulatory compliance like HIPAA Compliance involves certain complex requirements such as the ability to audit your security system and software infrastructure, generate accurate reports of the audits conducted, and many more. The simplest way to satisfy these essential requirements is to hire a proficient IT firm that possesses the necessary resources for securing your network, adhering to the cybersecurity measures as mandated, conducting audits promptly, and generating relevant reports.

Concluding Thoughts:

Isn’t it wise to trade your weakness for rewards by reaping the benefits of outsourcing app development services? So, whenever you find any of these alarm bells ringing, it’s high time you should consider outsourcing. The myriad benefits of this strategy ensure high ROI for your business.
Are you on the lookout for a reliable outsourcing agency? Contact Biz4Solutions, a prominent Offshore Software Development company serving global clients for the last 10 years!