How Benefits Tech is Using Card Issuance to Power Smarter, More Flexible Experiences

The benefits industry runs on technology. Yet, compliance constraints, legacy systems, and manual oversight often slow progress. Rigid architectures and one-size-fits-none solutions have historically slowed innovation. But that’s changing.

A new wave of benefits platforms is challenging the status quo—designing dynamic, embedded experiences with the consumer at the center. These platforms aren’t just administering benefits. They manage real-time eligibility, spend logic, and engagement.

And at the heart of this shift? Card issuance.

What Is Card Issuance for Benefits Tech?

To understand this shift, it’s important to define the role of card issuance in benefits tech. In the world of benefits technology, card issuance is a foundational tool for enabling convenient, compliant access to benefit dollars. From Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) to newer models like Lifestyle Spending Accounts (LSAs) and Individual Coverage Health Reimbursement Accounts (ICHRAs), card issuance allows users to transact directly with their benefits—without waiting for manual reimbursements or navigating complex claims processes.

For years, a handful of legacy processors controlled card issuance for benefits. The rigid infrastructure and limited flexibility at times stifled innovation and created barriers for benefits platforms looking to deliver more personalized, embedded experiences.

But that’s changing.  Now, a new wave of benefits platforms is challenging the status quo. Card processors who embrace embedded finance are enabling these benefits platforms to:

• Instantly issue physical or virtual cards
• Apply real-time spend controls based on plan rules
• Support multi-wallet configurations across benefit types
• Seamlessly integrate with digital platforms and mobile apps

Today, card issuance acts not as a barrier, but as a strategic enabler that powers smarter, more flexible benefits delivery.

Key Use Cases in Benefits Platforms

The use cases and complexity required for benefits card issuance is not theoretical. It is deeply rooted in regulatory and compliance requirements. Benefits tech must ensure their desire for modern integration doesn’t ignore the unique needs of benefits card issuance.

Real-Time Eligibility Filtering. Typically, each benefit has a unique and designated purpose. Card processors must enforce rules at the point-of-sale to restrict or limit the spending of benefit dollars. Typically, this consist of merchant category controls (MCC), merchant rules, and even inventory-level controls such as IIAS. While most processors must verify availability of funds, a card processor focused on benefits must ensure real-time eligibility for the specific purchase.

Multi-Purse Architecture. Benefits platforms should simplify access to funds across a variety of benefits. The ability to offer a single card with multi-purse capabilities across these benefits with dynamic spend logic can be a differentiating factor.

Virtual Card Deployment. Virtual cards enable consumers to quickly and easily add their benefits card to their preferred digital wallet such as ApplePay and GooglePay. This enables a more seamless interaction and reduce delays that can occur when waiting for a physical card to be received by mail.

Taken together, these use cases illustrate how card issuance supports a broader movement: embedded finance.

Embedded Finance: The Future of Benefits Delivery