Member Exclusive, Payments

What Marqeta’s entry into the credit card industry means for Marqeta the brand

  • Marqeta announced a new partnership with the First National Bank of Omaha to expand its partner ecosystem as it prepares for a credit launch.
  • Marqeta wants to become a one-stop shop for brands looking to launch card services.

Email a Friend

What Marqeta’s entry into the credit card industry means for Marqeta the brand

As 2021 rounds up, card issuing platform Marqeta is heading into 2022 at full throttle. In February this year, having already established itself in the debit card market, the firm announced its expansion into the consumer credit card market. Last week, the firm revealed a key development in that program: a partnership with the First National Bank of Omaha (FNBO). The collaboration is intended to expand Marqeta’s ecosystem of partners, enabling its customers to launch modern credit cards.

As the American economy continues to recover from the pandemic, consumers’ appetite for credit has notably increased. On the other hand, banks’ appetite to lend has also increased. 34.1 million new bank cards were originated in the US this year, up almost 42% from the previous year, according to a report by Equifax. The report also found the average credit limit for all bank cards issued in June 2021 to be $4,517, up almost 16% from June 2020. This overview helps explain why firms originating in the debit sphere are now looking to expand into credit offerings.

“With 52% of card spending happening on credit in the US, this is a massive market opportunity that is underserved by current technology options that have done little to modernize the card experience,” Vidya Peters, Marqeta’s COO, said in a conversation with Tearsheet. “Our credit card issuing platform is a critical strategic priority for Marqeta to ensure we’re properly attacking our total addressable market and continuing to deepen our competitive moat in Modern Card Issuing.”

Marqeta’s credit offering will allow its clients to launch credit cards. Using the firm’s open API technology, partner brands will be able to embed the card experience directly into their app ecosystem. In addition, the API enables partners to extend credit applications, onboard accounts, and evolve cards to meet changing customer needs. Marqeta’s platform also includes a self-service dashboard, which clients can use to configure and update credit products. 

Under the new partnership with FNBO, Marqeta will rely on the bank for premier underwriting services, along with enhanced program management capabilities, including compliance and risk management. While Peters was hesitant to share exact launch dates at this stage, she did reveal this: “Expect our joint offering to be available in the first half of 2022, and we already have significant interest from customers.”

Previously, Marqeta’s payment infrastructure had been limited to debit, where it established itself with big clients such as DoorDash, Uber, and Affirm. Entering the credit sphere raises a key question about the firm’s branding, as we see its value proposition evolve.

The buzzword ‘one-stop shop’ is now on the table for Marqeta, too, as it looks to facilitate the increasing number of brands today looking to launch cards -- be it credit, debit, or prepaid. “This expansion of our credit offering cements our brand as the go-to platform for modern card issuing, and we’re proud to power mission-critical payments solutions for our customers,” said Peters.

In June 2021, Marqeta went public, raising $1.23 billion through an initial public offering. Calling the IPO a ‘watershed moment’ for the firm, Peters said it was the firm’s biggest marketing campaign of the year. And with the release of credit card offerings, the company will continue to focus on marketing how its customers can use modern card issuing to drive businesses, with credit use cases featuring prominently. “As a public company we see even more opportunities for creative campaigns and storytelling about how modern card issuing can tackle the $74 trillion market for global money movement,” Peters said.

Marqeta has also brought in a new vice president of marketing, Jeff Otto. Prior to joining the company in November 2021, he spent 7 years at Salesforce, and previously also led the technology and data division at Morgan Stanley.

In September, Marqeta came up with a global survey intended to map consumer attitudes towards credit during the pandemic. It found that 63% of the respondents relied on credit cards to make ends meet during COVID-19, and 72% became more conscious of their credit post-COVID. 

While credit cards continued their dominance in the credit sphere, the report found that new credit products like BNPL also had a key role to play. 47% of the US respondents said they had used a BNPL service, as compared to 60% of the respondents from Australia, the global leader in the BNPL industry. 

Against this backdrop, Marqeta believes its technology can help develop creative virtual credit card use cases. With reward programs among the latest trends in the space, the firm aims to provide its clients with real-time data to power them. “Our platform makes it simple for our customers to change reward programs and modify offers and controls based on real-time data from users. We’re confident that these benefits will result in a more personalized experience for consumers and drive higher adoption,” Peters said.

Last month, Marqeta posted its Q3 results, showing a strong 56% year-on-year growth in revenue, which rose to $131.5 million. However, a key takeaway was the firm’s rising net loss, owing to increasing expenses. Management attributed these expenses to a rising headcount and an increase in employee compensation and benefits following the firm’s push for expansion.

0 comments on “What Marqeta’s entry into the credit card industry means for Marqeta the brand”

Lending, Payments

Can lenders improve the financial health of consumers through design?

  • Design can play a critical role in improving consumers' financial health when it comes to lending.
  • Research by the Financial Health Network shows that areas like defaults, making payments, and borrowing the right amount can be significantly improved through behavioral design principles, to ensure customers make decisions that improve their financial well-being.
Rabab Ahsan | May 26, 2023

5 questions with Zip CEO Larry Diamond

  • Payment act as a beachhead for financial services firms to more deeply serve customers, according to Zip's Larry Diamond.
  • We spoke to the payment firm's CEO about his new focus on the US and the future of the company.
Zachary Miller | May 15, 2023

Microsoft brings payments for businesses on Teams

  • Microsoft has collaborated with Stripe and PayPal to enable in-app payments for small businesses on Teams.
  • Connecting or signing up for one service – Stripe or PayPal – is required to set up the Teams Payments app, with support for GoDaddy in the cards.
Sara Khairi | May 11, 2023

Tokenization, programmable payments, inclusion: Unpacking near-term trends in the payments ecosystem

  • Very little appears to be staying the same where the payments industry stands in 2023 compared to where it’s headed in the next few years.
  • Tokenization beyond cards, borderless rails, credit for the underbanked, and the proliferation of payment acceptance options are some of the near-term trends in the payments ecosystem, suggests a new Mastercard report.
Sara Khairi | May 10, 2023

As Amazon Pay now offers Citi Flex Pay, will it help Amazon close the gap with PayPal?

  • Amazon has partnered with Citi Flex Pay to offer eligible card members the ability to pay over time at merchants who accept Amazon Pay.
  • Will gaining access to Citi's card network enable Amazon Pay to gain an edge over competitors like PayPal?
Rabab Ahsan | May 05, 2023
More Articles