Betterfly, a Chile-headquartered startup that provides a wellbeing and insurance platform in Latin America and Spain, shared some insights into their card program in the Spanish market: Over 70% of employees activate benefits after onboarding, and more than 80% use cards regularly (Betterfly Product Page, Swan).
How does the card work? Spanish tax law lets employees allocate up to 30% of gross salary to tax-advantaged benefits: meals (€11/day tax-free), transport (€1,500/year), childcare and training. Employees who can make use of these tax advantages can boost their take-home pay by 15% without any salary increase. Since it’s so beneficial, more than 70% of Spanish companies already offer it.
Why not 100%? Without a tailored software product, the process can be pretty tedious: tracking daily limits, filing receipts and audits from the tax authority. Companies like Betterfly fix this: they build the compliance layer directly into the card itself. The card only works when it’s within the requirements, such as daily limits for the appropriate merchant.
Betterfly is not alone in this space. I looked at the Spanish market some years ago and remember Cobee and Payflow with a similar solution (but probably many more). The incredibly strong tax benefits are obviously a huge driver, and the cards become a daily routine: metro rides, lunch, wellness activities.
Similar employee benefit card providers exist across Europe, but adoption varies significantly. The biggest factor? The size of the tax benefits. In Germany, for example, employers can provide €50 per month in non-cash benefits as well as meal vouchers, transport subsidies, and childcare support. The limits are reasonable but nowhere near Spain's 30% threshold.
German providers also faced another challenge: regulatory uncertainty around whether cards would be allowed for tax benefits at all. Back in 2020/2021, when I was trying to sell card solutions to tax benefit providers, this was a major concern. This changed soon after, and cards became an accepted delivery method. That said, stories like this regulatory uncertainty help explain why card adoption for employee benefits developed so differently across European markets.
