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."
