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The following is the first in a series by Berkeley Payments’ Founder & Executive Vice Chairman Jonathon Hamburg exploring how prepaid has evolved from simple cards to programmable financial infrastructure, and what that means for the future of payments.
Prepaid systems now underpin everything from real-time payroll and insurance disbursements to embedded finance in wealth management and retail. They’ve matured into a programmable, compliance-ready foundation for how money moves in a digital economy.
Welcome to the world of Prepaid 3.0 - the age in which prepaid functions as core infrastructure.
From Plastic to Platform: the Evolution of Prepaid
Prepaid cards had a simple beginning that developed over the last few decades:
- Prepaid 1.0: In the early 2000s, prepaid entered the scene with single-use and reloadable cards that were primarily used for gifts or the unbanked. These programs were functional but rigid, often weighed down by high fees and limited usability.
- Prepaid 2.0: In the mid 2000s-2010s, General Purpose Reloadable (GPR) cards were introduced. These cards enabled direct deposit, bill pay, and modest integration with payroll and benefits systems. This is when the prepaid market
began serving mainstream needs.
- Prepaid 3.0: Today, prepaid is digital-first, app-controlled, and API-driven. Programs integrate directly with mobile wallets, support real-time push payments, and connect to broader financial ecosystems. In short, prepaid now behaves more like a modern bank account, minus the overhead of becoming a bank.
The evolution of prepaid mirrors the broader fintech story with traditional financial rails meeting tech-led innovation.
The Building Blocks of Prepaid 3.0
What began as a simple stored-value product has developed into a modular financial operating system. Instead of just moving money, the latest generation of prepaid technology builds ecosystems, enabling companies to embed financial functionality into products, platforms, and customer experiences with minimal friction.
Prepaid 3.0 is defined by programmability, compliance, and connectivity. It combines the regulatory foundation of banking with the flexibility of APIs and digital-first design. The result is a payment layer that’s as secure and regulated as a bank, but as agile and configurable as software.
At its core, Prepaid 3.0 is built on a few foundational capabilities:
- Seamless Digital Integration: Rather than just a piece of plastic, cards are now digital credentials that are instantly provisioned to Apple Pay or Google Pay. Whether for payroll, insurance claims, or incentives, recipients can access funds the moment they are issued.
- Full App-Level Control: Prepaid platforms today give enterprises and end users alike total visibility and flexibility. Through branded mobile apps, users can view balances, block or unblock cards, set spending limits, or receive instant transaction notifications - all in real time.
- Enterprise-Grade Security and Compliance: Behind the user experiences lies a compliance and risk engine that rivals that of major banks. PCI DSS, and SOC 2 certifications, combined with AML/KYC/KYB screening and two-factor authentication ensure every transaction is secure and traceable.
- Financial Tools and Ecosystem Connectivity: The prepaid layer integrates with credit-building programs, savings features, and earned wage access. APIs link prepaid accounts with other fintech services, turning what was once a payment tool into a gateway to financial inclusion and loyalty.
- Transparency and Cost Efficiency: With regulatory pressure driving clearer fee structures and more efficient settlements, prepaid programs have become cheaper to operate, easier to audit, and able to scale efficiently.
Taken together, these capabilities redefine prepaid as infrastructure, not product. It’s a programmable foundation that enterprises can configure to power any form of money movement, from instant wage access to cross-border relief programs.
Why Enterprises Are Making the Shift
While startups were the first to exploit the flexibility of prepaid, the most significant growth today is happening at the enterprise level. Established companies - from insurers to wealth managers - are using prepaid as the foundation for scalable, compliant, branded financial experiences.
For companies that need to issue payments but don’t want to build or maintain banking infrastructure, prepaid provides a ready-made framework that’s fast and secure.
EQ Bank, for example, recently used Berkeley’s prepaid APIs to extend daily spend functionality to its savings customers, reaching 35,000 cardholders in the first month and surpassing $1 billion in deposits by mid-2025.
Dayforce (formerly Ceridian), one of North America’s largest payroll providers, leveraged prepaid technology to launch its Dayforce Wallet, giving workers instant access to earned wages in real time. What once required 12 months of development was delivered in 12 weeks.
And in the non-profit sector, The Canadian Red Cross uses instant issuance prepaid cards to distribute emergency funds within hours of a crisis, maintaining complete oversight and traceability through a compliant, bank-integrated platform.
None of these are “prepaid card programs” in the traditional sense. Rather, they’re enterprise-grade payment infrastructures that are fully branded, compliant, and embedded directly into each organization’s ecosystem.
The Infrastructure Advantage
The case for prepaid is as much operational as it is strategic.
Building an internal payment product complete with network integrations, compliance layers, and ledgering can take 2-3 years and cost millions of dollars annually to operate. Prepaid platforms abstract that complexity, offering a fully integrated environment where card issuance, KYC, compliance, and real-time money movement all coexist in one place.
The result is faster deployment, lower overhead, and a dramatically reduced compliance burden. This means enterprises can launch, test, and scale new financial offerings in a matter of months instead of years, without the risks of handling funds directly or maintaining bank partnerships themselves.
Expanding Use Cases
Prepaid 3.0 is not tied to one specific industry. It’s an adaptable infrastructure that can support a spectrum of real-world applications, including:
- Payroll and Earned Wage Access: Real-time payouts for employees, gig workers, and contractors.
- Insurance and Claims Disbursement: Instant, compliant access to funds after a claim is approved.
- Wealth and Financial Services: Account-linked “spend cards” that extend brand presence and stickiness.
- Sales Incentives and Loyalty Programs: Flexible reward systems that reinforce engagement and brand visibility.
- Relief and Non-Profit Programs: Rapid, trackable distribution of funds for disaster recovery and field operations.
Each use case underscores a shift in how enterprises now view prepaid as an embedded layer of financial infrastructure that strengthens customers relationships and accelerates innovation.
From Product to Platform
The future of prepaid lies in programmable money movement, meaning real-time, API-driven systems that connect directly into enterprise workflows and customer experiences.
Prepaid’s evolution from simple cards to scalable, regulated infrastructure represents its path to becoming the bridge between traditional finance and embedded finance - the connective tissue that lets enterprises act like a fintech without becoming one.
Stay tuned for future installments of this Prepaid 3.0 series in which we’ll explore:
- Scaling Prepaid
- Banking for Non-Bank Institutions
- The Compliance Layer
