Facebook is working with Payments technology provider Marqeta Inc. to add features to its stored-value Facebook Card.
San Francisco-based Marqeta announced May 16 that its multi-merchant technology will become a feature of the social media giant's new plastic card. The agreement builds on Marqeta's prepaid card, which rewards consumers who commit to paying in advance for goods or services at a participating merchant.
"It has always been an ambition for us to power other cards on the market," says Jason Gardner, CEO of Marqeta. "Facebook approached us because they were looking to create a multi-merchant gift card."
Facebook introduced its closed-loop gift card in February.
"We are under the hood on this one for Facebook," Gardner says. "It is purely a white-label association."
When Marqeta first entered the payments landscape with its multiple merchant prepaid card technology, the company wanted to establish scale as quickly as possible, Gardner says. "We are seeing that ambition realized with Facebook," he says.
The technology arrangement with Facebook won't utilize the same merchant reward program as the Marqeta card. Instead, it allows gift-givers using Facebook Gifts to send initial and future gifts from multiple merchants on a reusable card that can hold multiple retailer balances.
Facebook notifies the friend receiving the gift and sends the Facebook Card in the mail a few days later.
Marqeta may have been a natural fit for the Facebook-branded Discover card, considering Marqeta has worked with Discover as its payments network since launching its prepaid card last year.
Facebook users are among the first to use Marqeta's multiple-account +M Platform, which allows purchasing multiple gifts, managing balances and adding funds via mobile devices, tablets or computers, Gardner says.
"This, unequivocally, is big news for Marqeta," says industry analyst Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group, LLC.
"To have an association with a company with the scale and capabilities of Facebook, it is like the dance floor is laid out for you, and now it's up to you to perform," Ablowitz says.
Startups like Marqeta need business partners to help get plastic cards in consumers' hands and establish access to merchants, Ablowitz says. "With Facebook, they have that locked down," he says.
Establishing a business relationship with Facebook is just the beginning for Marqeta, the way Gardner describes it.
"We have cracked a nut with the multiple stored-value card, and will continue to serve clients every way we can by creating new business models and markets in the future," Gardner says.
Marqeta received a boost for that vision by securing $14 million from investors in a Series B funding round.
Investors have supported the original mission of Marqeta to develop technology for others to use to grow their businesses, Gardner says.
"With extra funds, we can improve technology and create a path to bring on more talent and meet all of the opportunities coming at us," he adds.
Jamba Juice also uses Marqeta's technology, which powers its Sip to Support charitable donation program. Jamba Juice patrons can donate to local charities by swiping a prepaid card.