Choosing a card format is one of the first decisions you make when launching a prepaid card program. It's also one of the easiest to get wrong if you focus on unit cost alone.
Virtual cards avoid physical production and shipping. Magstripe cards can cost less to produce than chip cards. EMV chip cards offer stronger protection against counterfeit card fraud and support broader acceptance in markets where chip payments are standard.
But the cheapest option on paper isn't always the most cost-effective choice for your program.
Card format affects how recipients access their funds, where they can spend them, the security controls available and how much you'll spend over the life of the program.
Here's how to evaluate the options and choose the right combination for your needs.
Start by separating the decisions
Magstripe, EMV, virtual and mobile wallet are often presented as four competing card formats. In practice, they represent two core decisions and an additional capability.
Physical or virtual? This determines how recipients receive and access their card credentials. You can also offer both.
Magstripe or EMV? If you issue a physical card, you need to determine which payment technologies it will support. Depending on the program, a physical card may support a magnetic stripe, an EMV chip or both.
Mobile wallet or no mobile wallet? Supported physical and virtual cards may be provisioned to Apple Pay, Google Pay or another compatible wallet, allowing recipients to pay with a supported mobile device.
These choices are related, but they're not interchangeable. A virtual card can be used online and, if supported, added to a mobile wallet for in-person contactless payments. A physical card can also support mobile wallet payments.
With those distinctions clear, you can evaluate the options against your program's requirements.
1. Look beyond the price per card
Card production is an obvious cost, but it's only one part of the total.
Physical cards involve manufacturing, personalization and fulfillment. Virtual cards avoid those physical costs, although digital issuance, delivery, activation and ongoing program services may still carry fees.
EMV chip cards may cost more to manufacture than magstripe cards, but the difference depends on your supplier, order volume, card specifications and personalization requirements. Ask providers for actual pricing rather than relying on a generic industry benchmark.
Other costs to consider include:
- Shipping and fulfillment: Sending cards in bulk to one location is different from mailing individual cards to hundreds or thousands of recipients.
- Replacement and reissuance: Lost cards, damaged cards, expiration and reorders can add to the lifetime cost.
- Branded packaging: Card carriers, envelopes and accompanying letters may involve separate design and production costs.
- Mobile wallet provisioning: Wallet enablement may involve setup or transaction-related fees, depending on the issuing and processing arrangement.
- Program setup and ongoing fees: Platform, implementation and support costs can matter more than the difference in unit price, particularly for smaller programs.
Volume matters, too. A small per-card difference can become significant when you're issuing tens or hundreds of thousands of cards. At lower volumes, fixed program costs may account for a larger share of your total spend.
The goal isn't simply to find the cheapest format. It's to understand the full cost of delivering a usable payment experience.
2. Understand what EMV security actually protects
EMV stands for Europay, Mastercard and Visa. EMV chip technology uses cryptographic processes and transaction-specific data to help authenticate a genuine card and prevent counterfeit card fraud.
A traditional magnetic stripe stores payment data that can be copied and reproduced on a counterfeit card. EMV chip transactions use dynamic security data that makes this type of cloning much harder.
That distinction matters, but it's important to understand what the chip does and doesn't protect against.
Scenario
What EMV contributes
A counterfeit card is created using copied magnetic-stripe data
Helps prevent counterfeit card use in chip transactions
A card number is used for an online purchase
The chip isn't directly involved in a typical online transaction
A physical card is lost or stolen
Doesn't, by itself, prevent unauthorized use
A virtual card's details are exposed
Doesn't, by itself, prevent misuse of those credentials
EMV is an important security measure, but it isn't a complete fraud-prevention strategy.
For prepaid programs, other controls may be equally important to the risks you're managing:
- Balance and transaction limits: Limit the amount available to spend and the size or frequency of transactions.
- ATM access controls: Disable cash withdrawals when they aren't required.
- Merchant category restrictions: Limit where funds can be spent when the program supports this capability.
- Cardholder self-service: Allow recipients to freeze a card or report it missing.
- Rapid replacement: Make it straightforward to block a lost card and transfer eligible remaining funds to a replacement.
These controls depend on your issuing and processing arrangements and the capabilities configured for your program.
Consider a $200 incentive card issued to a channel partner. If the program has a limited balance, no ATM access and effective controls for reporting lost cards, its risk profile differs from that of a long-term, reloadable card used for everyday spending.
That doesn't make EMV unnecessary. It means the security decision should reflect the actual use case, acceptance requirements and issuing partner's rules, rather than treating the chip as a substitute for broader program controls.
3. Choose a format recipients can actually use
A card can be inexpensive to issue and still be a poor choice if recipients struggle to access or spend the funds.
Consider how recipients will receive their cards, what devices they have and how comfortable they are with digital payment tools.
Physical cards can be a practical choice for broad or mixed audiences. They don't require a compatible smartphone or mobile wallet, although activation, PIN setup or other steps may still be necessary.
Virtual cards can be issued and delivered quickly, making them useful for remote employees, digital incentives, online purchases and distributed recipient populations. They can eliminate physical fulfillment delays, but the redemption experience matters.
For example, a virtual card might require a recipient to:
- Receive and open an email.
- Follow a link to access the card.
- Complete any required activation or verification.
- View the card credentials or add the card to a supported wallet.
Every additional step creates an opportunity for confusion or abandonment. The exact process varies by program, so evaluate the experience recipients will actually encounter.
Mobile wallets can make in-person spending more convenient by allowing recipients to tap a compatible device at supported contactless terminals. They can be particularly useful when recipients need access to funds quickly or are unlikely to carry a physical card.
Wallet support isn't automatic, however. It depends on the card product, issuer, processor and program configuration. Recipients also need compatible devices and a supported provisioning process.
For mixed audiences, offering both physical cards and a mobile wallet option may provide the most flexibility. For digitally native recipients, virtual cards with wallet support may be sufficient.
The right answer depends on the people you're serving, not assumptions about how they prefer to pay.
4. Consider acceptance over the life of the program
A card format that works today may not be the best choice for a program expected to operate for several years.
EMV chip technology is widely used for in-person payments, particularly in markets where chip-and-PIN has become standard. Magstripe-only cards may encounter acceptance limitations at terminals that require chip or contactless transactions, especially outside North America.
Mastercard has also announced plans to phase out magnetic stripes on newly issued credit and debit cards, with changes beginning in certain markets before 2029. Mastercard's announced timeline exempts prepaid cards issued in the United States and Canada, so the dates shouldn't be interpreted as a universal deadline for prepaid programs.
Nevertheless, network requirements and market practices can evolve over a program's lifetime.
Before choosing a physical card format, consider:
- Where recipients are likely to use the card.
- Whether they'll transact internationally.
- Whether the program is short-term or intended to support ongoing spending.
- How card renewals and replacements will work.
- Any requirements imposed by your issuing partner or payment network.
For a short-term incentive program with a defined spending period, the priorities may differ from those of a reloadable employee card expected to remain active for years.
EMV may be worth the additional production cost for broader acceptance, stronger counterfeit-fraud protection and long-term flexibility. The decision should be based on the program's requirements, not on the retirement timeline alone.
5. Bring the decisions together
Once you've considered cost, security, recipient needs and acceptance, you can narrow down the options.
Start with these questions:
Do recipients need to spend in person?
If spending is exclusively online, a virtual card may be sufficient. If recipients need to pay in stores, consider a physical card, a virtual card provisioned to a supported mobile wallet, or both.
Do recipients have compatible devices and a straightforward way to access their cards?
If the population is mixed or unknown, a physical card can offer a more accessible alternative. If recipients are comfortable with digital tools, virtual cards and mobile wallets may offer a faster experience.
Where and how long will the cards be used?
International spending, long-term usage and future renewals may strengthen the case for EMV. Check merchant acceptance and program requirements before selecting magstripe.
How does each option affect the total program cost?
Compare manufacturing, fulfillment, provisioning, replacement, setup and ongoing fees at your expected volume. Consider whether the recipient experience justifies any additional cost.
Example: A holiday incentive program
Imagine a company distributing prepaid cards to 500 employees as a holiday gift.
The employees are comfortable using digital tools, the cards are ordered well in advance, and the program is expected to run for a limited period. Recipients may want to shop both online and in stores.
A virtual card with mobile wallet support could offer quick delivery and convenient in-person spending, provided the card product supports the intended purchases and recipients can access the wallet.
Alternatively, a physical card with mobile wallet support could provide a familiar option for recipients who prefer plastic, while still allowing compatible devices to be used for contactless payments.
If the company chooses physical cards, it should evaluate EMV and magstripe against merchant acceptance, security, issuer requirements and actual production quotes.
There isn't enough information to declare one format universally best. The right choice is the one that meets the program's requirements at an appropriate total cost.
Make the right choice for your program
Card format is more than a line item on a production quote. It affects how recipients access their funds, where they can spend them and what it takes to operate the program over time.
The cheapest card isn't necessarily the cheapest program to run, especially if the delivery experience creates friction or the format limits acceptance.
Berkeley helps organizations design and operate card programs around their business requirements, recipient populations and operating models.
Talk through your card program to evaluate the right format, delivery experience and cost structure for your needs.
