In what remains a challenging environment for many employees, prepaid card programs continue to play a vital role. As associates return to the office or look for new ways to drive sales, employers can leverage a variety of commercial prepaid products to boost morale and reward performance.
In the 2025 State of the Industry: Prepaid Commercial Cards report, Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, explores the potential of prepaid cards for businesses, employees, and consumers. Hirschfield outlines the ways that prepaid cards have sustained a strong presence in the commercial market—largely due to their flexibility and diverse range of use cases.
Flexible Ways to Keep Employees Happy
Continuing calls to return to the office have led to growing frustration among employees who have grown accustomed to more freedom and flexibility while working from home. Additionally, the costs associated with commuting and in-office work create an extra burden, prompting employers to find ways to make the transition worth their while.
“There are so many ways to use prepaid cards to recognize employees,” said Hirschfield. “If they’re returning to the office, you could offer them an incentive to say, ‘Hey, we know that you haven’t had to pay for gas or transit to come into the office, so here’s a gift card to help ease that pain.’”
The sales environment can also be difficult amid ongoing economic uncertainty and concerns over inflation. To help motivate employees, employers can utilize prepaid cards as a tool for rewarding sales performance through contests or incentive programs. These cards can be reloadable, allowing employers to continuously add funds whenever a representative hits a sales target. Payments can also be made instantly, eliminating the need to wait for the next payroll cycle or HR approvals.
Little Side Benefits
There are also benefits in terms of reporting. Any type of incentive may be subject to tax, and a prepaid program can offer clear reporting if the employer needs to address income tax implications.
Additionally, the shift of many incentive programs to digital platforms is an advantage in today’s modern working environment.
“Even when you have a geographically diverse workforce, you’re able to do these things instantly, to everyone, in an equal manner,” said Hirschfield. “It really simplifies things from that perspective.”
Traditional opportunities also remain for celebrating occasions like holidays, birthdays, and work anniversaries. “These little things can show that you’re in touch with the employees as an employer,” said Hirschfield. “Things can look frustrating to the employee side, and you want to make sure they are recognized.”
Advantages in the Commercial Sector
Prepaid commercial credit programs for midsize to large corporations represent a steady slice of the commercial market. In 2024, prepaid cards maintained a significant 22% market share within the commercial sector.
There are many use cases where prepaid cards make more sense than issuing credit cards. While corporate credit card programs are generally the right option for employees who frequently use their corporate accounts, they can be costly.
On the other hand, many employees only occasionally incur expenses for travel or purchases. Prepaid cards offer a flexible solution, allowing organizations to cover costs without the added administrative burden of enrolling employees in a corporate credit program.
“You really should have both a corporate credit program and a corporate prepaid program,” Hirschfield said. “You can give access to people who need to charge expenses to a card based on their frequency of usage or how much they’re spending. Obviously, if someone’s spending high amounts of money, a credit card makes sense. But when it’s for occasional travel—such as being sent to a training class that might be the employee’s only travel opportunity for the year—a prepaid card can be a lot more efficient in the long run. Combining the two can bring down the expense of running a card program.”
Prepaid is also an effective solution for organizations with contractors who need to make purchases on the company’s behalf. Providing such individuals with a company credit card can be problematic. Instead, granting them access to a prepaid program offers the employer greater control and protection.
“You’re not giving them long term access to a purchasing opportunity,” said Hirschfield. “You’re protecting how much that person can spend, as well as even what they can spend it on.”
A Strong Way to Promote Loyalty
The consumer incentives segment of the prepaid industry has proven to be a real boon for entities seeking to improve customer loyalty. Javelin’s research found that nearly 40% of \U.S. consumers surveyed received an incentive in the past 12 months. Nearly half of respondents who received a prepaid card as a gift ended up joining that retailer’s loyalty program.
The research also shows that when a consumer tries a prepaid gift card for the first time, they are much more likely to become a repeat visitor to a store or website. They are also more likely to join the loyalty program, download the app, and engage in behaviors that increase their long-term engagement as a consumer.
“As a brand, you are reducing the acquisition costs for that customer by participating in incentive programs,” said Hirschfield. “You’re creating a new marketing opportunity to find potential new customers as a brand or program manager by putting these cards in the right places to get exposure to new or lapsed customers.”
If there is a concern about the future of this market, it’s that the federal government—having played a significant role in fueling the distribution of prepaid cards—may be scaling back its efforts. However, the loyalty example highlights another way in which a prepaid program can serve distinct segments that a postpaid environment can’t replicate. Even as some programs recede, new opportunities and use cases continue to emerge.
