Fintech

Marqeta is building tools for finance's old guard — and their disruptors

CEO Jason Gardner says the fintech startup is "in the right place at the right time."

Marqeta is building tools for finance's old guard — and their disruptors

Marqeta provides the infrastructure for issuing debit and prepaid cards and processing payments.

Image: Marqeta

Jason Gardner, founder and CEO of Marqeta, was 11 years old when he first visited Silicon Valley in 1981. It wasn't as he had imagined it.

"I thought there were these mountains of silicon everywhere," he told Protocol, recalling the day his dad, who was in the Bay Area for work, gave him a tour of the place that had long fascinated him as a boy growing up in New Jersey.

Before the drive, Gardner told his father: "You need to show me this place, Silicon Valley. I want to see HP. I want to see Apple. I want to see Intel." He liked what he saw. "I was blown away," he recalled. "I fell in love with the Bay Area and the balance between nature and technology. There's this balance between the beauty of the Bay Area and the technology that's being built. I never forgot it as a little kid."

Fast forward 40 years, and striking a balance is something he's had to become increasingly familiar with.

Gardner now calls the Bay Area home and is considered a pioneer in a key segment of fintech: the infrastructure for issuing debit and prepaid cards and processing payments. That means he treads a careful line between competing and collaborating with corporate giants including JPMorgan Chase, Goldman Sachs, Visa and Mastercard, as well as fending off rivals such as Galileo and Fiserv.

On Thursday, the Oakland-based fintech took another step along that tightrope, announcing a new credit card-issuing platform geared to businesses looking to launch their own credit card programs. It's a bold move in a space dominated by legacy providers such as Fiserv. It's also a potentially lucrative push at a time when fintech infrastructure has become a growing and increasingly competitive market, as more businesses look to incorporate financing services on their platforms.

"We're now tackling the credit card issuing space which is very very complex," he said. "This represents for us a major product extension because we know that this area of the card market is ripe for disruption."

From debit to credit

The disruption Gardner speaks of features a significant trend: Financial tools and services are becoming ubiquitous. "Every company is becoming a fintech company of a sort," he said.

Marqeta's client list underscores this. It includes fast-growing fintechs including Affirm, Expensify and Square as well as Wall Street giants like JPMorgan Chase and Goldman Sachs. But Marqeta also serves clients outside of financial services that are now incorporating payment and finance tools into their platforms, such as Uber, DoorDash and Instacart.

"A lot of companies are becoming financial services companies," Gardner said. "You saw this with Apple creating the Apple card and then the Apple prepaid card. And you see Uber getting into the space." Big, established companies, such as major retailers, typically have a good understanding of their customers and see the value of offering them financial services on their own platforms.

Thanks to a legion of fintechs, companies can now build those financial tools and services on their platforms. "In the past, when you wanted to go build a card product you had to call a bank," he said. "But these open platforms and the ability to deliver open API's allow a company to create very specific experiences for their constituency."

Marqeta CEO and founder Jason GardnerImage: Marqeta

Marqeta's credit card platform rollout follows recent, other big news. Last July, JPMorgan Chase announced it was using Marqeta's technology to instantly tokenize commercial credit cards into mobile wallets. With Thursday's announcement, Marqeta is expanding its platform capabilities to allow customers to build and issue new credit card products.

In September, Marqeta introduced tokenization-as-a-service, which gives card issuers, including those not on the Marqeta platform, access to its tokenization technology which seeks to secure a digital card's identification data. Last month, Goldman Sachs said Marqeta will be its partner in developing a checking account for Marcus, the Wall Street firm's digital bank.

Logan Allin, managing partner at Fin Venture Capital, said Marqeta's new offering is "definitely an early mover" and a "differentiated" initiative. "Marqeta continues to be the leader in the fintech space for B2B card issuance, whether those are debit, virtual, tokenized and now bank-sponsored credit cards," he told Protocol.

But Marqeta is also competing with other fintech infrastructure companies in an arena dominated by corporate giants, including major banks and financial institutions, including JPMorgan Chase, Goldman Sachs, Visa and Mastercard. In most cases, the infrastructure players have forged partnerships with these giants, which Marqeta has also done, with tools for better payment systems. But there have been signs of consolidation as some of the big players move to acquire these technologies: Last year, Marqeta rival Galileo was acquired by SoFi, Visa tried (but ultimately failed) in its bid to buy Plaid, and rival Mastercard just acquired Finicity.

"We're a utility," he said. "We think of ourselves as a hardware store. If you need to solve a problem, you buy specific tools for the job." Marqeta, he said, is creating tools "to help [not] only large issuers, but [also] these large tech companies, new entrants in the digital banking space and commerce disruptors."

Show the developers some love

The old guard of the financial service industry faces its own challenges, of course. "The big banks and the big financial institutions need to create much better experiences," Gardner said. "They can't just expect to create the same model, the same experience, the same functionality they've been doing for years, and continue to be relevant."

The rise of digital banks and other fintech companies has "really disrupted" the industry. He said: "It woke up the sleeping giants to figure out how to begin to compete in managing financial services."

It's a market in which Gardner has been a trailblazer, said Allin, who called the Marqeta founder "an incredible entrepreneur and CEO," adding: "He was prescient and very early to the 'embedded payments' and 'payments-as-a-service' themes and now is in a position to dominate this space."

Gardner came up with the idea for Marqeta while having dinner with a friend in San Francisco in 2010. His friend wanted to "put a bunch of coupons on a card," he said. "I found that kind of a cool idea, to see if we could solve that problem," he said. "And the only way to solve that was build an issuing processing system from scratch."

Gardner said he set out to build a platform that would deliver its services via open APIs. That in turn helped define Marqeta's strategy, which is focused on developers.

Kevin Doerr, Marqeta's chief product officer, described the company's focus on developers as essentially a battle for "hearts and minds." "Developers are a unique cohort of the population at a technical level and if you can win [their] hearts and minds because you're doing the things that appeal to them, then ultimately you can win the business," he told Protocol.

He cited Twilio as a company he watches closely, noting that the cloud communications platform has "done an outstanding job with their developer platform." "They interest me from that perspective," Doerr said. "Understanding developers, building what they need, having that focus is really key for Marqeta."

In fact, Allin said Marqeta "exemplifies the Twilio-ization of fintech," citing the company's "developer-first sales approach, using open APIs and sandbox technology to provide self-serve options to fintechs at all stages for card issuance."

"It's a true bar-belled approach to growth which creates sustainable moats, less customer concentration and diversified revenue streams and margin profiles," Allin said

Marqeta is unveiling its new product at a moment when the getting is still good on the markets and many when major fintech names are understandably looking to go public. On Tuesday, the company reportedly confidentially filed papers to go public. The company has no comment, a spokesman told Protocol.

Gardner said he preferred not to discuss a possible sale or an IPO. "We're focused on building a business," he said. "I wouldn't comment on these types of outcomes. There is a lot of work to do. The world is changing rapidly, especially around financial services. We see this great opportunity. And we're in the right place at the right time with our platform."

LA is a growing tech hub. But not everyone may fit.

LA has a housing crisis similar to Silicon Valley’s. And single-family-zoning laws are mostly to blame.

As the number of tech companies in the region grows, so does the number of tech workers, whose high salaries put them at an advantage in both LA's renting and buying markets.

Photo: Nat Rubio-Licht/Protocol

LA’s tech scene is on the rise. The number of unicorn companies in Los Angeles is growing, and the city has become the third-largest startup ecosystem nationally behind the Bay Area and New York with more than 4,000 VC-backed startups in industries ranging from aerospace to creators. As the number of tech companies in the region grows, so does the number of tech workers. The city is quickly becoming more and more like Silicon Valley — a new startup and a dozen tech workers on every corner and companies like Google, Netflix, and Twitter setting up offices there.

But with growth comes growing pains. Los Angeles, especially the burgeoning Silicon Beach area — which includes Santa Monica, Venice, and Marina del Rey — shares something in common with its namesake Silicon Valley: a severe lack of housing.

Keep Reading Show less
Nat Rubio-Licht

Nat Rubio-Licht is a Los Angeles-based news writer at Protocol. They graduated from Syracuse University with a degree in newspaper and online journalism in May 2020. Prior to joining the team, they worked at the Los Angeles Business Journal as a technology and aerospace reporter.

While there remains debate among economists about whether we are officially in a full-blown recession, the signs are certainly there. Like most executives right now, the outlook concerns me.

In any case, businesses aren’t waiting for the official pronouncement. They’re already bracing for impact as U.S. inflation and interest rates soar. Inflation peaked at 9.1% in June 2022 — the highest increase since November 1981 — and the Federal Reserve is targeting an interest rate of 3% by the end of this year.

Keep Reading Show less
Nancy Sansom

Nancy Sansom is the Chief Marketing Officer for Versapay, the leader in Collaborative AR. In this role, she leads marketing, demand generation, product marketing, partner marketing, events, brand, content marketing and communications. She has more than 20 years of experience running successful product and marketing organizations in high-growth software companies focused on HCM and financial technology. Prior to joining Versapay, Nancy served on the senior leadership teams at PlanSource, Benefitfocus and PeopleMatter.

Policy

SFPD can now surveil a private camera network funded by Ripple chair

The San Francisco Board of Supervisors approved a policy that the ACLU and EFF argue will further criminalize marginalized groups.

SFPD will be able to temporarily tap into private surveillance networks in certain circumstances.

Photo: Justin Sullivan/Getty Images

Ripple chairman and co-founder Chris Larsen has been funding a network of security cameras throughout San Francisco for a decade. Now, the city has given its police department the green light to monitor the feeds from those cameras — and any other private surveillance devices in the city — in real time, whether or not a crime has been committed.

This week, San Francisco’s Board of Supervisors approved a controversial plan to allow SFPD to temporarily tap into private surveillance networks during life-threatening emergencies, large events, and in the course of criminal investigations, including investigations of misdemeanors. The decision came despite fervent opposition from groups, including the ACLU of Northern California and the Electronic Frontier Foundation, which say the police department’s new authority will be misused against protesters and marginalized groups in a city that has been a bastion for both.

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Enterprise

These two AWS vets think they can finally solve enterprise blockchain

Vendia, founded by Tim Wagner and Shruthi Rao, wants to help companies build real-time, decentralized data applications. Its product allows enterprises to more easily share code and data across clouds, regions, companies, accounts, and technology stacks.

“We have this thesis here: Cloud was always the missing ingredient in blockchain, and Vendia added it in,” Wagner (right) told Protocol of his and Shruthi Rao's company.

Photo: Vendia

The promise of an enterprise blockchain was not lost on CIOs — the idea that a database or an API could keep corporate data consistent with their business partners, be it their upstream supply chains, downstream logistics, or financial partners.

But while it was one of the most anticipated and hyped technologies in recent memory, blockchain also has been one of the most failed technologies in terms of enterprise pilots and implementations, according to Vendia CEO Tim Wagner.

Keep Reading Show less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Fintech

Kraken's CEO got tired of being in finance

Jesse Powell tells Protocol the bureaucratic obligations of running a financial services business contributed to his decision to step back from his role as CEO of one of the world’s largest crypto exchanges.

Photo: David Paul Morris/Bloomberg via Getty Images

Kraken is going through a major leadership change after what has been a tough year for the crypto powerhouse, and for departing CEO Jesse Powell.

The crypto market is still struggling to recover from a major crash, although Kraken appears to have navigated the crisis better than other rivals. Despite his exchange’s apparent success, Powell found himself in the hot seat over allegations published in The New York Times that he made insensitive comments on gender and race that sparked heated conversations within the company.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Latest Stories
Bulletins