Open-loop versus closed-loop

Card processors can be either classified as open or closed-loop processors. We define a processor as being open-loop when it allows us to process a subsequent transaction that had its initial transaction with a different processor. Additionally, open-loop processors generally support network tokens as well.

A closed-loop processor on the other can only be used to make subsequent transactions that were originally started with the same processor. For these processors, subsequent transactions can only ever be created using the same proprietary PSP token, limiting its re-use.

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Merchant-initiated transactions

As a consequence of the above, in the subsequent merchant-initiated transaction (MIT) scenario we are limited as to what connection we can use to process the transaction, regardless of what the flow routing rules may define.

Our logic for filtering subsequent MIT transactions is as follows.

• If the original initial transaction went through an open-loop connection, only connections from open-loop processes will be used for a subsequent MIT.
• If the original initial transaction went through a closed-loop connection, only that specific connection can be used for a subsequent MIT.

From our current connections, the main closed-loop processor is Stripe. Stripe does support open-loop processing for some select merchants. If this has been enabled for you then Stripe can be toggled to behave as an open-loop processor from the dashboard.