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Protocol | 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."

Protocol | Workplace

In Silicon Valley, it’s February 2020 all over again

"We'll reopen when it's right, but right now the world is changing too much."

Tech companies are handling the delta variant in differing ways.

Photo: alvarez/Getty Images

It's still 2021, right? Because frankly, it's starting to feel like March 2020 all over again.

Google, Apple, Uber and Lyft have now all told employees they won't have to come back to the office before October as COVID-19 case counts continue to tick back up. Facebook, Google and Uber are now requiring workers to get vaccinated before coming to the office, and Twitter — also requiring vaccines — went so far as to shut down its reopened offices on Wednesday, and put future office reopenings on hold.

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Allison Levitsky
Allison Levitsky is a reporter at Protocol covering workplace issues in tech. She previously covered big tech companies and the tech workforce for the Silicon Valley Business Journal. Allison grew up in the Bay Area and graduated from UC Berkeley.

After a year and a half of living and working through a pandemic, it's no surprise that employees are sending out stress signals at record rates. According to a 2021 study by Indeed, 52% of employees today say they feel burnt out. Over half of employees report working longer hours, and a quarter say they're unable to unplug from work.

The continued swell of reported burnout is a concerning trend for employers everywhere. Not only does it harm mental health and well-being, but it can also impact absenteeism, employee retention and — between the drain on morale and high turnover — your company culture.

Crisis management is one thing, but how do you permanently lower the temperature so your teams can recover sustainably? Companies around the world are now taking larger steps to curb burnout, with industry leaders like LinkedIn, Hootsuite and Bumble shutting down their offices for a full week to allow all employees extra time off. The CEO of Okta, worried about burnout, asked all employees to email him their vacation plans in 2021.

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Stella Garber
Stella Garber is Trello's Head of Marketing. Stella has led Marketing at Trello for the last seven years from early stage startup all the way through its acquisition by Atlassian in 2017 and beyond. Stella was an early champion of remote work, having led remote teams for the last decade plus.
Protocol | China

Livestreaming ecommerce next battleground for China’s nationalists

Vendors for Nike and even Chinese brands were harassed for not donating enough to Henan.

Nationalists were trolling in the comment sections of livestream sessions selling products by Li-Ning, Adidas and other brands.

Collage: Weibo, Bilibili

The No. 1 rule of sales: Don't praise your competitor's product. Rule No. 2: When you are put to a loyalty test by nationalist trolls, forget the first rule.

While China continues to respond to the catastrophic flooding that has killed 99 and displaced 1.4 million people in the central province of Henan, a large group of trolls was busy doing something else: harassing ordinary sportswear sellers on China's livestream ecommerce platforms. Why? Because they determined that the brands being sold had donated too little, or too late, to the people impacted by floods.

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Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.
Power

The video game industry is bracing for its Netflix and Spotify moment

Subscription gaming promises to upend gaming. The jury's out on whether that's a good thing.

It's not clear what might fall through the cracks if most of the biggest game studios transition away from selling individual games and instead embrace a mix of free-to-play and subscription bundling.

Image: Christopher T. Fong/Protocol

Subscription services are coming for the game industry, and the shift could shake up the largest and most lucrative entertainment sector in the world. These services started as small, closed offerings typically available on only a handful of hardware platforms. Now, they're expanding to mobile phones and smart TVs, and promising to radically change the economics of how games are funded, developed and distributed.

Of the biggest companies in gaming today, Amazon, Apple, Electronic Arts, Google, Microsoft, Nintendo, Nvidia, Sony and Ubisoft all operate some form of game subscription. Far and away the most ambitious of them is Microsoft's Xbox Game Pass, featuring more than 100 games for $9.99 a month and including even brand-new titles the day they release. As of January, Game Pass had more than 18 million subscribers, and Microsoft's aggressive investment in a subscription future has become a catalyst for an industrywide reckoning on the likelihood and viability of such a model becoming standard.

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Nick Statt
Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.
Protocol | Policy

Lina Khan wants to hear from you

The new FTC chair is trying to get herself, and the sometimes timid tech-regulating agency she oversees, up to speed while she still can.

Lina Khan is trying to push the FTC to corral tech companies

Photo: Graeme Jennings/AFP via Getty Images

"When you're in D.C., it's very easy to lose connection with the very real issues that people are facing," said Lina Khan, the FTC's new chair.

Khan made her debut as chair before the press on Wednesday, showing up to a media event carrying an old maroon book from the agency's library and calling herself a "huge nerd" on FTC history. She launched into explaining how much she enjoys the open commission meetings she's pioneered since taking over in June. That's especially true of the marathon public comment sessions that have wrapped up each of the two meetings so far.

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Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

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