2024 Prepaid Regulatory Update: Playing by the Rules

Regulatory changes affecting the prepaid industry slowed domestically and globally in 2024. Major efforts to tamp down prepaid card fraud and scams took a backseat, with a major exception in Maryland that could be a precursor of future actions. Positive regulatory growth did lead additional states to add legal mobile sports betting and lotteries, opening up new markets in the prepaid and stored-value ecosystem. Those states without legalized gambling, a minority, continue to get outside pressure to consider enacting legislation and thus reap the tax benefits of gaming. Policy changes continued in the ongoing battle to fight inflation, avoid a recession, and address other macroeconomic conditions that have a great impact on the prepaid market. 

Secondary drivers in prepaid actions include annual cost-of-living adjustments to regulated programs such as nutrition assistance and health savings accounts (HSAs). In addition, confusion remains on the regulatory status of earned wage access, as the Consumer Financial Protection Bureau’s guidance conflicts with the guidance from several states. 

Global changes reflected similar themes. Various regulatory bodies offered new options to clarify the value and rules around taxing and redeeming vouchers, gift cards, and coupons, and attempts to add reward programs to social media site TikTok were shot down in Europe.

Key questions discussed in this report: 

• Is Maryland’s law aimed at fighting card draining the start of a widespread trend? 
• When will mobile and online gaming and gambling reach all 50 states? 
• How do international regulatory changes show similarities and differences with domestic changes?

Companies Mentioned: 

PLI, Starbucks, TikTok