Bringing modern payment options to traditional 529 plans

Starting point

529 college savings plans are tax-advantaged accounts that must be funded in cash, but federal rules allow that cash to be accepted via checks, credit cards, electronic transfers, and similar methods. In practice, most contributions still flow through checks or bank transfers, which can feel slow and inconvenient for friends and family who want to give.

A global payments provider and a leading 529 prepaid gift card platform aligned on a partnership concept: enable 529 gifts through credit cards and, over time, digital wallets, while keeping contributions compliant and whole for the beneficiary. Externally, the story was simple. Internally, it was not. Legal, compliance, product, engineering, and sales each had open issues across regulation, chargebacks, merchant-of-record status, fees, settlement, and responsibilities. Without a single connective lead, the partnership risked staying a slide and webinar topic instead of becoming a usable capability for 529 programs.

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Approach

At the time, Bhuvan Maingi, now Managing Partner of Strathen Group, was part of the internal team leading vertical growth strategy and served as project lead for the 529 work.

The first step was to make the end-to-end flow unambiguous. A simple “before and after” view showed how gifts moved from givers to 529 accounts (checks or ACH) and how they would move once card and wallet options were introduced. Payment would be accepted on the gifting partner platform, processed by the payments provider, and settled as cash into the 529 plan before the account was credited. This shared picture helped teams anchor their questions in a concrete model rather than debating the concept in the abstract.

With the flow clear, the team established a small set of cross-functional workstreams with named owners and a short list of decisions. Legal and compliance focused on how 529 cash-contribution rules and card guidance applied to the model. Product and engineering defined integration patterns across the payments provider, gifting platform, and 529 program administrators, including a card-first launch and a wallet-ready path. Sales and account teams shaped how to position the value to state plans and program managers without promising beyond what the flows and contracts could support.

Weekly check-ins ran off a single action and decision log. Open items were framed as decision statements with options and implications, such as how to handle chargebacks so 529 programs stayed protected while givers had a fair experience, or which entity should be merchant of record and what that meant for risk, reporting, and economics. Issues that could not be resolved at working level were escalated through short decision notes, not long decks. External inputs, including US payment preference data and feedback from the 529 ecosystem on clunky gifting experiences, helped shift the discussion from “nice to have” to a clear customer expectation.

One accountable project lead, a visible decision log, and a clear future-state flow turned scattered 529 questions into an executable plan.

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Outcome

The partnership moved from concept to a defined, launch-ready pattern for funding 529 gifts by card and, over time, digital wallet. Legal, compliance, product, engineering, and sales aligned on roles, decision gates, and operating responsibilities, including how to keep contributions compliant, route payments, and manage chargeback and fraud risk.

For 529 programs, the result was a practical path to offer a modern gifting experience without building their own card-acceptance model. The gifting platform and the payments provider would manage the payment layer and integrations so plans could stay focused on growing assets and awareness.

In regulated payments, the hard part is aligning risk, compliance, and delivery around one path to launch.

This work shapes how Strathen supports fintech partnerships: we design the decision path and operating ownership so promising collaborations reach customers.