What is a Meal Card?

A Meal Card is a prepaid payment instrument provided by employers to employees as part of salary benefits. It is primarily used for food and meal-related expenses such as restaurants, cafeterias, and food delivery platforms.

Meal cards are usually governed by tax and payroll regulations and are designed to restrict usage only to eligible merchant categories.

Meal Card Positioning

• Card Type: Semi-Closed Prepaid Card
• Funding Source: Employer-funded allowance
• Usage Scope: Food & dining merchants only
• Risk Model: Very Low (Prepaid + Restricted)

Entities Involved in Meal Card Ecosystem

• Employee (Cardholder): End user
• Employer: Funds meal allowance
• Issuing Bank: Licensed prepaid issuer
• Program Manager: Card & rule management
• Merchant: Food & beverage outlets
• MCC Engine: Merchant category filtering

Types of Meal Cards

• Physical Meal Card
• Virtual Meal Card
• Mobile Wallet–Linked Meal Card
• Cafeteria-only Corporate Meal Card

Meal Card Issuance Flow

1. Employer partners with meal card provider
2. Employee enrollment & KYC (light KYC)
3. Meal wallet created for employee
4. Monthly allowance credited
5. Card issued and activated

POS Transaction Flow (Restricted Use)

1. Employee pays at food merchant
2. POS sends transaction to acquirer
3. Network routes to issuer
4. MCC validation performed
5. Meal wallet balance checked
6. Amount debited from meal wallet
7. Approval sent to merchant

Merchant Category Code (MCC) Control

• Only food & beverage MCCs allowed
• Non-eligible merchants automatically declined
• Ensures regulatory and tax compliance

Reload & Expiry Model

• Employer credits monthly allowance
• Unused balance may carry forward
• Expiry rules defined by employer/provider

Security & Controls

• PIN-based transactions
• Merchant restriction via MCC
• Daily spend limits
• Instant card block on loss

Clearing & Settlement

Meal card transactions are cleared via card networks and settled between issuer and acquirer. Wallet balance updates immediately, while employer funding is handled separately.

Advantages

• Tax-efficient employee benefit
• Controlled spending on meals
• No misuse at non-food merchants
• Convenient alternative to cash vouchers

Limitations

• Restricted usage
• Not usable for groceries in some regions
• Dependent on merchant acceptance

Summary

Meal Cards are structured prepaid instruments that bridge payroll, taxation, and digital payments, offering employers control and employees convenience for daily food expenses.