Open-loop card: why the logo on your card matters
-
Key takeaways
An open-loop card works on a major payment network, meaning it can be used almost anywhere that network is accepted.
Most prepaid, payroll, and general-purpose reloadable cards are open-loop.
An open-loop card can typically be used at ATMs, for online purchases, and for in-person transactions broadly.
For recipients, an open-loop card offers meaningfully more flexibility than a closed-loop card tied to one merchant.
Open-loop cards issued by a financial institution generally carry stronger federal consumer protections than closed-loop alternatives.
An open-loop card works on a major payment network, like Visa or Mastercard, which means it can be used almost anywhere those cards are accepted. Here’s why that matters for receiving money internationally.
What is an open-loop card?
An open-loop card is a card that carries a major payment network logo and can be used broadly, wherever that network is accepted, rather than being limited to a single merchant. According to the CFPB’s prepaid card definitions(opens in new window), most prepaid cards, including general-purpose reloadable cards, payroll cards(opens in new window), and many government benefit cards, are open-loop.
Why open-loop cards matter for international transfers
For recipients, an open-loop card means genuinely wider access compared to a closed-loop(opens in new window) alternative:
It can typically be used at ATMs. This gives recipients a way to withdraw cash, not just make purchases.
It’s accepted broadly for online and in-person purchases. Since it carries a recognized network logo, merchants everywhere that accept the network can process a payment made with it.
It’s generally the receivable card type for international transfers. A money transfer delivered to a card needs an open-loop card, since a closed-loop card tied to a single merchant can’t receive funds this way.
Open-loop cards and international money transfers
Understanding this distinction helps senders choose the right delivery method, since a money transfer needs to land on an open-loop card, a bank account, or another compatible delivery method, never a closed-loop card tied to a single retailer. For recipients, this flexibility matters directly: an open-loop card can withdraw cash, make purchases, and in many cases receive an international transfer directly, making it one of the more versatile delivery options available depending on the corridor and provider.
How open-loop cards are issued and backed
An open-loop card is issued by a bank or financial institution in partnership with a payment network like Visa or Mastercard, which is what allows it to be accepted broadly at any merchant or ATM that accepts that network’s cards, unlike a closed-loop card tied to a single retailer. The issuing bank is responsible for the underlying account, handling deposits, balances, and any fees, while the network handles the actual transaction processing and merchant acceptance behind the scenes. This partnership structure is also why an open-loop prepaid card typically comes with certain federal consumer protections, since it’s regulated similarly to other bank-issued financial products, offering more recourse than an unregulated, closed-loop alternative would.
Choosing between an open-loop card and a bank account as a receive method
For a recipient without an existing bank account, an open-loop card can serve as a practical, more accessible entry point into a broader financial ecosystem than cash alone provides, allowing purchases, online bill payment, and cash withdrawal from a wide network of ATMs. That said, an open-loop card is generally not a full substitute for a bank account long-term, since it typically doesn’t offer the same interest-earning potential, broader loan or credit access, or account-building history that a traditional bank account can provide over time. Understanding an open-loop card as a useful bridge, rather than a permanent solution, helps set realistic expectations for both the sender arranging a transfer and the recipient using the card to access it.
Common questions about open-loop cards
-
How can I tell if a card is open-loop?
Look for a payment network logo, such as Visa, Mastercard, American Express, or Discover, printed on the card. If that logo is present, the card is generally open-loop and usable wherever that network is accepted.
-
Are all prepaid cards open-loop?
No, though most are. Some prepaid cards, particularly certain gift cards, are closed-loop, meaning usable only at a specific merchant. Checking for a network logo is the quickest way to distinguish between the two.
-
Can I receive an international transfer on an open-loop card?
In many corridors, yes, an open-loop card is a viable delivery option, alongside bank deposit and cash pickup. Checking availability for a specific destination and provider confirms whether this option applies.
In Summary
The logo on a prepaid card determines far more than its appearance; it determines where and how it can actually be used, including whether it can receive an international transfer at all. Understanding the open-loop versus closed-loop distinction helps both senders and recipients choose delivery options that will genuinely work.
This publication is provided for general information purposes only and is not intended to cover all aspects of the topics discussed herein. This publication is not a substitute for seeking advice from an applicable specialist or professional. The content in this publication does not constitute legal, tax, or other professional advice from Remitly or any of its affiliates and should not be relied upon as such. While we strive to keep our posts up to date and accurate, we cannot represent, warrant, or otherwise guarantee that the content is accurate, complete, or up to date.