Visa's recent leading of a $25 million investment round in Marqeta is an unusual move for the card network, which has most recently focused its investments in merchant acquiring technology companies.
While a lot of the attention for open development has gone to direct merchant acquiring, Marqeta sees other links in the payment chain that can benefit from fast and minimalist deployment. Marqeta instead has its eyes on e-commerce, alternative lending and 'gig economy' companies.
"The success of a modern company lives and dies on the user experience, whether it's a commercial space or the consumer space," said Jason Gardner, CEO of Marqeta, an Oakland, Calif.-based company that sells technology to power card issuance and technology development via a sandbox, or open space for external developers.
Visa didn't return a request for comment by deadline. It has recently invested in Stripe, which makes it easier for retailers to build payment acceptance pages into their websites. The card network has also made a recent investment in Klarna, which just received a banking license in Sweden, and has opened its own technology to third party developers.
Marqeta is an issuer processor, providing an API that powers the development and deployment of payment cards, virtual cards and mobile authorization products.
The company contends it is democratizing access to payments technology for new issuers and fintech companies. Its "Just-In-Time' (JIT) funding feature enables companies to authorize their own card transactions by accessing a sandbox to build authorization in a few minutes, then use Marqeta's card controls and configurations to build a funded card program in a few days.
Marqeta splits its technology into five sections: Delivery, lend, disburse, expense and virtual; with each having tools for emerging companies to power payouts for 1099 contract or freelance workers, expense management and scalable virtual card payments.
The model is designed to shave time and steps from more traditional processing and issuance given the pace the emerging electronic payments market requires for payables, alternative lending, disbursements, e-commerce, on-demand services and P-to-P payments. "If they don't have an open platform to build on, a company has to make changes more often," Gardner said.
The Visa investment will go toward distribution. "Visa is a railroad that connects every merchant in the world," Gardner said.
Marqeta also hopes to expand internationally, and work with Visa on a new generation of digital issuance technology to lure companies that found legacy core processing systems to be too expensive or complex. "85% of transactions are cash, there's a lot of opportunity," Gardner said.
Marqeta recently put its technology to work to extend third party mobile payments, offering instantly issued tokenized cards that support Apple Pay on the Visa network. The technology has since been extended to Android Pay.
"Marqeta is positioning itself as a card platform that can be used to satisfy a range of payment needs, all available via APIs," said Tim Sloane, vice president of payments innovation at Mercator Advisory Group.
The company supports a range of payment needs for merchants, corporations and financial institutions, Sloane said. "So the Marqeta APIs are also equal opportunity providers delivering payments to anyone that has a need for programmatic access to a payments platform."