Hey, I’m Jason Gardner, Founder and CEO of modern card issuing platform Marqeta ($MQ), which enables payment solutions for the world’s most innovative companies (like DoorDash and Square). Leave your questions for me here around on-demand delivery, BNPL, crypto, or our journey to become publicly traded — I’ll be back on Thursday, December 9 to answer them live.
20 questions answered
What advantages does Marqeta have over products like Stripe Issuing and Expensify?
Expensify is a customer of Marqeta, they use our modern card issuing platform to power the Expensify Card. As for Stripe, they do have an issuing product, but have only been in the market for a few years. The value and experience Marqeta provides our customers is unparalleled in the industry, given our 11 years of experience. We also focus just on issuer processing, whereas issuing is one of many products Stripe offers. Customers choose us because we have proven we can get to market fast and operate at massive scale. We will continue to innovate on our products and build out our ecosystem to deepen our competitive moat and win customers with a superior product.
The company has grown incredibly quickly, as its partners like Square, Affirm, and DoorDash have scaled. How does Marqeta think about diversifying revenue and reaching the next, emerging companies that could benefit from its issuing or processing APIs?
Companies like Square, Affirm and DoorDash are shining examples of how Modern Card Issuing delivers and we are proud to play a role in their phenomenal success. We continue to add major disruptors to our platform, like Afterpay in 2019, or Coinbase in 2020. Modern card issuing is a huge potential market and there are going to be a lot of winners. Companies come to us so they have the tools, skills and expertise to follow in the footsteps of others who have seen huge success on our platform. A lot of our largest customers have been working for us for many years and seen tremendous growth on our platform. But We’re not just looking for the next generation of disruptors, we’re targeting companies (for example, large financial institutions) with large amounts of cardable volume.
How secure is the payment process?
Payments is a highly regulated space to help protect consumers. Marqeta, our vendors, and partners are subject to state, federal and international laws, regulations and standards. We meet the highest standards of Payment Card Industry (PCI) compliance, and provide a trusted and secure environment for our customers.
Is Marqeta in the process of creating there own crypto and blockchain technology? From Stephen Rivera
We have found though that our Just-in-Time Funding technology can provide a crucial gateway between a cryptocurrency wallet and the point of sale. We work with a number of cryptocurrency companies, like Shakepay, Coinbase, and Bakkt, to build card products. This allows our customers’ cardholders to make purchases at the point of sale in fiat currency based on their real-time crypto wallet balance. Marqeta’s platform eliminates the need to constantly sell crypto for fiat ahead of time to maintain a separate card balance. This creates a more seamless experience for the user as they don’t need to worry about a separate card balance, just their balance with their crypto provider.
BNPL is a hot sector that many investors are talking about, self included. How do you see evolving and Marqeta involvement within that evolution?
Marqeta powers many of the leading companies in the Buy Now, Pay Later (BNPL) space – like Affirm, Afterpay, Klarna, Sezzle and Zip – and have witnessed the incredible product market fit and momentum they’ve experienced firsthand. When Marqeta surveyed more than 3,000 consumers globally earlier in 2021, 71% of BNPL users said their use of BNPL platforms had increased in the last 12 months, and 52% said they’d be excited to use other financial services through their BNPL provider. We aim to be a single, global platform for our BNPL customers to be able to launch new products and expand globally, and look forward to powering this growth for years to come.
What is the overall history of your company (white papers)
In late 2009, I was eating sushi with my friend Sukhi Singh in San Francisco. It was the golden age of Groupons and he challenged me as a payments nerd to see if I could figure out how to load a bunch of Groupons onto a single card. I became fascinated with issuing. It’s really bow of the ship, engine room stuff and I love complex systems. I founded Marqeta and we became the first company to build a card issuing platform from scratch in some time. We began working with companies like Facebook and DoorDash to help them launch cards, and became the first card issuing platform to open up our APIs at the end of 2014.
Where does your company want to be in 2025?
Our vision is to democratize money movement globally. We are at the forefront of a big secular shift towards Modern Card Issuing and Global Modern Money Movement. We think this will happen over the next decade and that we’re still in the early innings here. Over the next years we will look to continue to add commerce disruptors, large tech giants and financial institutions, and set ourselves up as the go-to-platform winners default to. Over time, we also intend to broaden our platform by introducing additional capabilities and functionality to meet the evolving money movement needs of our customer base.
It seems like finance tech companies are trying to do more than just one item. PayPal added buying crypto, marketing data via Honey, and so on. Many seem to be becoming online banks and maybe a real estate sales platform. Do you believe this rapid expansion will bring unwanted attention from various government leaders around the world? Would this attention possiblly bring more creditability to fintech as a whole or do you believe it will stunt the growth?
What you’re seeing is that across a range of industries, user experience is emerging as a primary battleground where businesses compete. Consumers now expect elegant digital experiences in nearly every aspect of their lives, and companies have more insight than ever about the services their customers are looking for. Payments are incredibly sticky, and if executed well, help create a close relationship with your user base. That said, payments globally is a very regulated and complex landscape. Every country has its own rules and requirements that govern how money is moved. So I think the fintech landscape already has a lot of attention on it. Crypto is one area that has yet to be extensively regulated, and likely will be. But to your point, this can be a good thing for the market. Regulation in crypto can bring a greater sense of security to the industry. It can help track illegal transactions, protect consumers from bad actors, build trust and create frameworks to build in more utility for cryptocurrencies at the point of sale. The end result ultimately being bringing many more people to the table and mainstream usage, not just mainstream awareness. All this being said, best user interface and experience wins.
Hi , please explain like I'm five what your business is and does . Please also , forecast your growth ? Thanks
Marqeta is a modern card issuing platform. When you use your card to pay for something, there’s an ecosystem of companies that support the transaction. There’s where you input your details or swipe a card – the payment acquirer – which calls out to card networks, such as Visa, Mastercard and American Express, or one of many other payment rails globally. The card network reads the 16 digits of a card and calls the issuer processor – which is us. We work with a network of issuing banks, and we check if there’s enough money to complete a transaction and tell them to move money (from the consumer to the merchant bank) to settle the transaction. We’ve disrupted the card issuing space by making card issuing technology more accessible with an open API platform, and allowing our customers to issue a greater range of card products and get to market faster than they ever could. We won’t get into growth forecasts here but you can refer to our SEC filings and earnings release for the third quarter of 2021 available on our IR website, investors.marqeta.com, or the SEC website, sec.gov.
Do you offer payment solutions to start ups?
We are a horizontal and global platform: we can serve both innovative disruptors looking to scale and those at scale looking to innovate. As we grow as a company, we also need to go where the largest amount of carded volume is, so we have broadened our approach to work with banks like JP Morgan Chase and Goldman Sachs (through our work with Marcus). We see that the attributes of our platform: modern, extensible are applicable to customers of all sizes and we will continue to innovate on products that work across our horizontal platform. We will leverage partners like Treasury Prime to help onboard smaller companies looking to provide Banking-as-a-Service, and we will rely more on partnerships in the future as it is an efficient allocation of resources.
Hey Jason! What has been your biggest challenge as the founder/CEO of a public company?
You have to have intellectual curiosity in an entirely new process and different system of governance behind your company. It’s stressful, but I’ve found a lot of joy in it. You have a whole new constituency, your public investors, to serve. A lot of your job is the same though, I love our customers and I love building beautiful products. When you’ve finished the journey of going public, you also get to take a deep breath and refocus yourself on the core business, which is great.
When you first started Marqeta did ever imagine how widespread it would become?
No. I knew what we were doing hadn’t been done before and could make a real impact, but you can’t start a company thinking it needs to get a certain size to be successful. I had a lot of conviction around the idea. Being an entrepreneur is like being struck by lightning. It’s not “you find an idea.” It’s “an idea finds you,” and once that idea finds you, you really know what you want to do. It needs to come from the heart, not the head. You need to feel very strongly and have conviction because you know what it's going to do to you. It's tough starting businesses.
Hey Jason… awesome platform! How detailed pos data are you able to delineate at the consumer level and what card networks do you use? Thanks much and looking forward to the details! John Zy
When you swipe your card, or input your card details, at the point of sale, what is generated is an ISO 8583 message. We worked out how to take that and convert it into a computer-generated message. There are well over 100 points of data that can be in an ISO 8583 message, from the specific terminal and its location, to the merchant category code, the time of transaction, amount, and so on. As for card networks, our card products are primarily built on Visa or Mastercard card rails.
How did you get to becoming the modern card issuing company for DoorDash and square?
At the end of 2014 we opened up our APIs and we believe we were the first card issuing platform to do that. It meant that engineers at developer-led companies, like DoorDash and Square, could use our platform to build incredibly specialized card products. Square wanted to attach a virtual card to a Cash App account that could be instantly issued into a mobile wallet and allow its users to spend straight from their account. That would have been a lot more difficult through legacy card issuers, and you definitely couldn’t do it with the same speed, flexibility and control over the user experience. Likewise, DoorDash wanted to be able to put a card in their driver’s hands that allowed them to pay for only what had been ordered by a customer, to cut down on fraud. Using our Just-in-Time Funding technology, they can issue their drivers cards that carry $0 balances, and are only funded when the order is checked in real time against the DoorDash system. Our platform was built by developers, for developers. We opened up new use cases for disruptive companies and quickly found product market fit after opening our APIs in 2014. This has allowed us to attract great customers to our platform.
What was it like to build a company from the ground up
It was an amazing experience, which required a lot of persistence, perseverance, grit, and determination. You have to learn to hear the word no a lot. I like the word no, it allows you to build knowledge through inquiry to get to yes. People telling me I couldn’t build an issuing processing system from scratch was incredibly motivating for me. It’s too complex, nobody builds these anymore, you don’t have the experience, etc. It was a big driver for me to solve these big complex problems. And then when you’re raising money, you are going to hear no pretty much all the time. You have to learn that a lot about raising money is psychological. You have to convince people that your vision is going to make them successful. You have to truly believe from your heart, and talk about it in the context of where it’s headed, what it’s accomplished, the signs in the market, and why the market is going to come to you versus some other model. As a new company, you also have to convince people to leave better paying jobs and more security to join you on a journey. When you just have a spark of the idea, you almost have to have fire coming out from your eyeballs and have such conviction, that you know that it’s just a fait accompli and that the train has left the station. That your little company is going to change the world in some way.
I’m seeing a-lot of crypto cards coming out recently, will that be big part of growth for Marqeta
I can’t speak to the growth that crypto cards might bring, but we think the cards that we’ve helped bring to market, from companies like Coinbase, Shakepay, Bakkt and Fold, are super exciting applications of our technology. When I think of users of a crypto wallet being able to swipe a Marqeta-powered card at the point of sale and have a transaction funded in fiat currency in real-time through our gateway, based on their cryptocurrency balance, it is an exciting application of our technology. Similar to how we’ve seen our Just-In-Time, or JIT, funding technology enable on-demand delivery and Buy Now, Pay Later services, we’re now seeing JIT play a key role in enabling a new wave of innovative cryptocurrency card products. Just-in-Time Funding, used in tandem with our open APIs, creates a gateway between the crypto wallet and the point of sale. This allows fiat currency to be spent at the point-of-sale from a crypto wallet, and for consumers to earn cryptocurrency rewards.
There’s a lot of talk around Web 3.0 and now that companies are building in the cloud and open APIs, how will Marqeta enable the next wave of fintech companies, now that block chain removes many of the middlemen and costs associated when money is transferred?
Obviously there’s a lot of excitement around Web 3.0 and the innovation it will enable. I’ve long believed that blockchain had huge potential, especially as a decentralized ledger or system of record in payments. Today, we help our customers largely build Visa and Mastercard card products. Visa and Mastercard are unique; they’re the only networks in the world that have interconnected every merchant in the world, whether online or offline, who accept payment cards. I’m not saying that will never get disrupted, but it’s an incredibly valuable thing which has helped support a lot of innovation. We think we’ve had a lot of impact already helping bring new innovations to market with cloud native technologies and open APIs. This has opened up innovation at every level of the market: from the large financial institutions like JP Morgan Chase using our tokenization-as-a-service product to be able to instantly issue commercial cards into a mobile wallet, to Daylight, the first and only digital banking platform designed specifically for and by the LGBT+ community.
How is Marqeta changing the game for the industry?
Marqeta invented Modern Card Issuing. This has democratized access to card issuing technology, and allowed a new generation of innovators to build card products that they wouldn’t have been able to realize before Marqeta. Legacy card issuers were built for banks. That was their DNA, and everything was oriented around that, to issue standard cards. There was a long time to deploy and limited configurability. This wasn’t built for developers, or for innovation. Marqeta turned the entire card issuing and processing industry on its head and launched an entirely new way for companies to build payment card products.
There are so many payment stocks. Why should we invest in you?
We’re not pitching our stock or encouraging anyone to invest in Marqeta. Instead, I can comment on Marqeta’s business. Where I think Marqeta stands out in the market, is that we’re the first Modern Card Issuing platform built by developers for developers. Our highly configurable platform is able to serve use cases previously unaddressed by legacy systems. We translate the complex into intuitive and developer-friendly user experiences and help customers launch card products in days and months, rather than years. Our platform either supports the core business, or a function in support of the core business, of companies like Square, DoorDash, Affirm, Klarna and Instacart. What’s more, we’re attacking a huge opportunity and we’re just scratching the surface. We process less than 1% of the $6 trillion card-based payments market in the United States, which ladders up into a $74 trillion market for global money movement.
What makes you different then square
Square is a Marqeta customer. They use our modern card issuing platform to support their Square seller card, which allows small businesses to access their incoming earnings immediately and without additional fees, and to support their Cash Card, which is connected to Cash App. We think Square is a shining example of the power of modern card issuing and we’re proud to have been their partner on the unbelievable journey they’ve been on.