One theme underpins all the major trends in prepaid payments for 2025: security. Many of the industry’s developments stem from the desire to provide more secure payment options and enhanced protection for consumers.
“You need those cards to be secure both on the front end, with the actual card itself, and on the back end, with the technology that drives it and where the accounts are,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research and author of Javelin’s 2025 Prepaid Payments Trends report. Hirschfield identified three key trends to keep an eye out for: security for prepaid cards, the growth of B2B opportunities, and the maturation of the HSA market.
Keeping the Customer Safe
Faced with pressure from consumers and regulators, prepaid payment vehicles have increasingly focused on promoting their security features. By staying ahead of the curve, prepaid programs and their affiliates can use a variety of options in technology, packaging, messaging, and consumer engagement to reassure users of a safe and reliable product.
A law passed in Maryland this year to fight gift card draining reflects growing concerns about these vulnerabilities and underscores the risks posed by inconsistent state-by-state regulations. The legislation requires tamper-proof packaging for gift cards and mandates employee training to spot altered cards.
In the coming months, Hirschfield said that we should expect a wave of similar legislation in other states. However, he also noted that the industry recognizes the importance of proactively adopting these measures. For example, Target’s recent safety-minded redesign of its gift cards was already in the works before the Maryland law passed.
“Maryland is a drop in the bucket,” said Hirschfield. “The program managers, card producers, and retailers all are working in concert to create a better system than even what some of these one-off laws are doing. It’s going to show that the industry is ahead of things and prevent more regulatory oversight.”
While the legislation primarily addresses packaging, it also impacts back-end technology. Most importantly, it delivers a clear message from organizations to consumers: ensuring safety and security is their number one priority.
Opportunities in B2B
Prepaid and gift cards have become powerful tools for both commercial and business-to-business applications, offering various applications such as consumer rewards and employee incentives. While the current commercial market is smaller than the consumer-facing segment, it holds significant upside for both revenue and profitability.
Only 17% of employees report receiving an incentive from their employer in the form of a gift card. However, more than 80% of employees say they feel greater satisfaction with their employer when incentives are given.
“Trends around returning to office are really stressing out employees, making it a less positive environment,” said Hirschfield. “From that perspective, these are very inexpensive tools that make your employees feel better about their job.”
Incentive management companies can be a big help. They help defray the cost for sponsoring organizations offering incentives and have the advantage of selling large volumes of cards in bulk, as opposed to the typical one-off gift card transactions. While consumer gift card sales often involve small-dollar promotions that add to large-scale redemptions, programs like employee incentives, remittance, and travel and expense cards deliver long-lasting and high-load card activity.
“When someone buys a gift card at a retail outlet, you don’t know who they are,” said Hirschfield. “You might find out later, or you might find out who the recipient is, but you don’t know who that buyer is. In the B2B world, you know exactly who you are dealing with. You are developing long-term relationships that are beneficial to everyone involved.”
Security is a key component to this trend as well. By replacing corporate credit cards with prepaid cards, companies can gain better control over spending, setting limits and tracking transactions in real time.
The Beauty of the HSA
Prepaid cards in healthcare have become critical tools for managing out-of-pocket expenses through prescription benefits, health savings accounts (HSAs), and flexible spending accounts (FSAs). One reason for their growing popularity is the minimal downsides these products offer. Consumers benefit from greater efficiency, while many plans include employer matches or deposits directly into their accounts. The healthcare industry benefits from the efficiency and breadth of the accounts, and taxing agencies help control the process with their product-eligibility tables and through the administration of tax benefits.
“More organizations are moving to high-deductible healthcare plans to put more of the financial responsibility onto the employee,” said Hirschfield. “But while also reducing the amount per paycheck that the employees are paying, they’re potentially saving money if the users aren’t going to the doctor as much.”
People can use HSA plans to augment services not covered by their primary insurance plan. They can also use it to buy over-the-counter medication, in addition to prescriptions. Even without an eye-care plan, consumers can use a prepaid HSA card to purchase glasses.
In addition, the federal government continues to increase the amount consumers can contribute to their HSA. The money invested in these accounts remains with the employee, even if they leave their job. Since there’s no requirement to spend down the balance, many people use their HSA as a savings vehicle.
“As we’re getting closer to retirement, healthcare costs are going to go up,” Hirschfield said. “You are not necessarily going to have corporate insurance anymore, and I don’t know what Medicare is going to provide. It helps to have a little bit of a nest egg for healthcare spending. It’s an area where if you do it smartly, both can win.”
Peace of Mind for the User
Healthcare-related transactions involve a significant amount of personal information, making the security of HSA cards vitally important. With each of these trends, consumers need to know that the service—and their money—will be safe and reliable.
“I can’t stress enough how much security has become an overriding trend,” said Hirschfield. “Security in and of itself may not be one of the trends we write about at this time next year—but I guarantee it will be in the background of all of them.”
