Major retailers use third-party program managers for their gift cards. When a customer is scammed, the retailer deflects responsibility, stating they don't issue the cards. This structure, combined with weak regulation, leaves fraud victims with little recourse, creating an "accountability sink."

Companies profit not just from the initial sale (cash up front) and unredeemed balances. A third, often overlooked, profit source is consumer overspending. Shoppers typically spend 30-40% more than the card's value to use the remaining balance, a phenomenon called "top-off tension."

The payment card market has a stable, recurring revenue base. Of the 4 billion new cards issued annually, most are replacements for expired or lost/stolen cards, not net new accounts. This provides a durable, predictable demand floor for manufacturers like Composecure, independent of new customer growth.

Advocates often incorrectly label all gift card payment requests as scams. This reflects a class-based blind spot, as they misunderstand the legitimate use of "alternative financial services" like gift cards by unbanked or underbanked populations for whom they are a necessary payment rail.

Unlike other tech verticals, fintech platforms cannot claim neutrality and abdicate responsibility for risk. Providing robust consumer protections, like the chargeback process for credit cards, is essential for building the user trust required for mass adoption. Without that trust, there is no incentive for consumers to use the product.

To enable agentic e-commerce while mitigating risk, major card networks are exploring how to issue credit cards directly to AI agents. These cards would have built-in limitations, such as spending caps (e.g., $200), allowing agents to execute purchases autonomously within safe financial guardrails.

Kalshi’s key strategic move was getting its prediction markets regulated by the federal CFTC, similar to commodities. This established federal preemption, meaning state-level laws don't apply. This allowed them to operate nationwide with a single regulator instead of seeking approval in 50 different states.

To serve its largest customers, Square's open platform is crucial. It allows enterprises to integrate their preferred third-party tools with Square's core services. This flexibility prevents churn by allowing customers to customize their tech stack instead of being locked into a closed ecosystem.

Unlike debit cards protected by Regulation E, gift cards are intentionally exempted from strong consumer protection laws. This carve-out, lobbied for by retailers to ease commerce, removes the legal requirement for financial institutions to investigate fraud and reimburse victims, shifting the entire loss to the consumer.