Proceed With Caution: Instability in Government Programs Shakes Up the Prepaid Sector

Government prepaid payments, for so long a steady and consistent business for the entities contracted to manage them, have lapsed into uncertainty and turmoil. The rapid action of the so-named Department of Government Efficiency, combined with budgetary priorities that could sap aid programs propelled by prepaid cards, highlights a potentially tumultuous time for the programs that interact with the federal government. 

As the current administration backs away from enforcement, additional liabilities could emerge if future administrations choose to reinstate more regulatory control. The entirety of the prepaid infrastructure, regardless of their connections to government programs, would be wise to carefully evaluate its exposure to the federal government and establish strict internal controls to protect against adverse outcomes. This Javelin Strategy & Research impact note looks at the unfolding situation, highlights areas of concern, and provides actionable advice for those businesses riding out the current uncertainty.