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.

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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.

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