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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Card issuance company Marqeta is launching a suite of banking products for its clients to offer their end customers.
Marqeta for Banking is comprised of seven banking products made available through Marqeta’s banking partners.
The new tools include Demand Deposit Accounts, Direct Deposit with Early Pay, ACH with Plaid Integration, Cash Loads, and Fee-Free ATMs, which are now available to Marqeta’s U.S. customers. Bill Pay and Instant Funding will be available in beta early next year.
Marqetaannounced today that it is expanding further into the banking world beyond card issuance. The California-based company unveiled a suite of seven banking products through what it’s calling Marqeta for Banking.
Marqeta for Banking offers the company’s businesses customers access to more than 40 banking APIs that enable them to create customized banking services. The capabilities are made available through Marqeta’s banking partners and include Demand Deposit Accounts, Direct Deposit with Early Pay, ACH with Plaid Integration, Cash Loads, Fee-Free ATMs, Bill Pay, and Instant Funding capabilities.
“Consumers increasingly expect their financial services to be digital-first and mobile friendly, delivered by a brand they trust,” said Marqeta Founder and CEO Jason Gardner. “This is especially true for a rising generation of consumers who are less likely to have visited a physical bank branch or use a plastic card, and will instead begin their banking relationship on a mobile phone, which is doubling as a payment tool. Marqeta for Banking is fully designed to help customers meet the needs of today’s changing behaviors while building products for tomorrow’s consumer.”
Marqeta for Banking includes:
Demand Deposit Accounts are tied to a debit card and are offered by an FDIC-insured institution. These accounts offer higher spend limits and no maximum balances.
Direct Deposit and Early Pay is an earned wage access tool that enables users to receive their paycheck up to two days early.
ACH with Plaid integration enables ACH payments between bank accounts.
Cash Loads allow end users to deposit cash into their account at more than 180,000 retail locations. The deposited funds are available immediately in the user’s account.
Fee-Free ATMs enable Marqeta customers to provide access to fee-free ATMs via the Allpoint and MoneyPass networks.
Bill Pay will enable end users to pay their bills from within the app.
Instant Funding will enable end users to instantly fund their accounts using an external debit or prepaid card.
All but the last two products in the Marqeta for Banking suite are available in the U.S. The beta versions of Bill Pay and Instant Funding will launch early next year. A handful of customers are already leveraging elements of Marqeta for Banking, including Coinbase, Branch, and Fold.
Marqeta’s card issuing platform enables its clients to manage their own card programs by creating configurable and flexible payment tools as well as customizing payment cards for their end customers. The company was founded in 2010 and is a publicly traded company listed on the NASDAQ under the ticker MQ. Marqeta has a market capitalization of $4.14 billion.
Uber is launching a new debit card with tandem checking account.
The Uber Pro debit card is made available via partnerships with Mastercard, Marqeta, and Branch.
Uber Pro cardholders can receive up to 7% cashback on fuel purchases.
Uber’s latest attempt to attract more drivers to its platform comes in the form of a debit card with a tandem checking account. Late last week, the rideshare company announced the Uber Pro debit card.
The new debit card comes courtesy of partnerships with Mastercard, Marqeta, and Branch, a workforce payments platform that caters to gig economy workers and contractors. The card offers Uber drivers up to 7% cash back on gas purchases when they achieve Diamond status as an Uber Pro driver.
The Uber Pro card comes with a checking account powered by Branch, which will automatically deposit cardholders’ earnings into their account after every trip. Branch offers a unique take on earned wage access by enabling workers to access their paycheck as they earn it. The card currently has a wait list and will launch in the coming weeks.
This latest announcement comes three years after Uber originally introducedUber Money, a debit card and mobile app powered by Green Dot, and five years after the company launched its Barclays-powered credit card.
The launch of the Uber Pro card comes alongside a handful of other driver-related announcements from the ridesharing company. The Uber app will now offer drivers a range of nearby trips to choose from, show drivers their exact earnings upfront before they accept a trip, and offer enhanced benefits to Uber Pro drivers.
These driver-focused benefits are in part an effort to smooth out the supply and demand issue that Uber is facing. The nationwide labor shortage, combined with high fuel prices, has historically made it difficult for Uber to attract drivers. In May, Uber CEO Dara Khosrowshahi said, “Our need to increase the number of drivers on the platform is nothing new nor is it a surprise … there’s a lot of work ahead of us, but this is a machine that is rolling.”
Western Union has tapped Marqeta to enable clients in Europe to send remittances to a physical or virtual Visa card.
Marqeta’s open API will allow Western Union to replicate its payments card program to other geographies.
Thanks to Marqeta’s expertise, Western Union can now gradually add new features to its digital money transfer app.
Card issuance platform Marqeta has been busy lately and is adding to its to-do list, as well as its client base, today. The California-based company is partnering with money transfer company Western Union, which will integrate Marqeta’s payment cards solution into its digital wallet and digital banking platform in Europe.
The new relationship will enable Western Union to offer its remittance service online with the ability to disburse funds to either a physical or virtual Visa card. Ultimately, the addition of payment cards means that Western Union can now offer clients a more holistic experience.
Leveraging Marqeta’s scalable open API, Western Union can easily replicate its payments card program across international markets and will have access to real-time insights into customer card activity. “The Marqeta platform delivers all the functionality needed to support the goals of our new digital banking program, alongside the flexibility to enter new markets with ease and design new features that meet the needs of our customers,” explained Western Union Chief Data and Innovation Officer Tom Mazzaferro.
Founded in 2010, Marqeta offers a range of payments-related services, including direct deposit, ACH transfers, ATM withdrawals, and more. With today’s partnership, Western Union now has the ability to leverage this expertise by gradually adding new features to its digital money transfer app.
“We are thrilled to be working together on this exciting new venture for their European business,” said Marqeta Europe’s European Strategy Director Anna Porra. “At a time when customer expectations are rising, creating a data-driven solution that leverages modern card issuing technology, as well as the expertise of an ecosystem of global partners, is critical to help gain a share of wallet.”
Marqeta announced a collaboration with fellow Finovate alum Klarna to power the company’s new payment card.
The new card will enable Klarna customers to use the company’s Pay in 4 payment option in physical stores.
This week’s partnership builds upon a relationship the two companies have enjoyed since 2018.
A pair of Finovate alums have teamed up to offer a new transparent alternative to traditional credit cards.
Modern card issuing platform Marqeta reported this week that it is working with banking, payments, and ecommerce platform Klarnato power Klarna’s new payment card. The card will bring Klarna’s Pay in 4 service to a physical Visa card, and builds on a payment card partnership between the two companies that extends back to 2018. Marqeta currently enables the creation of one-time cards on Klarna’s app. The new Klarna Card will give customers the same control, convenience, and flexibility when shopping in physical stores that they currently enjoy when using Klarna’s Pay in 4 at the point of sale or via the Klarna app.
“Our U.S. customer base is growing rapidly and we’ve seen tremendous demand for our new Klarna Card offering,” Klarna Chief Commercial Officer David Sykes said. “By expanding our partnership with Marqeta, we’re leveraging their payments expertise to provide our customers with an unmatched user experience that will ultimately help our business grow.”
This latest collaboration comes just months after the two companies expanded their partnership into 13 new European markets. Klarna will leverage Marqeta’s Just-in-Time Funding functionality to gain control over the full transaction flow, and use Marqeta’s technology and 300+ open APIs to deliver customizable experiences and support Klarna’s international expansion.
“Marqeta’s continued partnership with Klarna is a testament to all the payment experiences that our modern card issuing platform can enable,” said Marqeta CEO and founder Jason Gardner. “We’re proud to offer a flexible, scalable card platform that can meet the demands of such a rapidly-growing and innovative company like Klarna.
A Finovate alum since 2012, Klarna now has more than 147 total active customers – 25 million in the U.S. – is active in 45 countries and facilitates two million transactions a day. Headquartered in Stockholm, Sweden, the company began the year with the launch of a physical payment card in the U.K. and, in March, announced the completion of its acquisition of comparison shopping service company PriceRunner. Sebastian Siemiatkowski is CEO.
Based in Oakland, California, Marqeta made its Finovate debut at our developers conference, FinDEVr Silicon Valley, in 2016. In the years since, Marqeta has issued more than 500 million cards via its platform and processed more than $110 billion in volume in 2021. In addition to its partnership with Klarna, Marqeta also announced this week that it was joining Mastercard’s Network Enablement Partners Program in the Asia Pacific. The move will enhance Marqeta’s ability to offer its APAC customers a faster path to live issuance.
“As one of Mastercard’s first Network Enablement Partners to be onboarded in the Asia Pacific region, Marqeta is well-equipped to deliver card issuances in record time, and to help their fintech customers scale at speed across multiple geographies,” Mastercard SVP of Digital Customer Solutions APAC Ben Gilbey said.
Modern card issuing platform Marqeta has come a long way since its Finovate debut in 2016. Back then, Marqeta was a six-year-old company, presenting the world’s first fully-documented, open API issuer processor platform, and emphasizing the company’s commitment to producing payments solutions that were “developer-friendly.” In fact, it was at Finovate’s developer conference, FinDEVr Silicon Valley in 2016 that Marqeta led a presentation “Democratizing Issuer Payment Processing with Just-In-Time (JIT) Funding.”
In the years since then, the Oakland, California-based fintech has forged partnerships with fellow Finovate alum Token (2017); with CashFlows, Visa, and Mambu (2019), with Mastercard, Afterpay, and Uber (2020) and, last year, with companies including Bill.com, Coinbase, and Square. The company also has raised more than $530 million in funding, and launched as a public company a year ago, trading on the NASDAQ under the ticker MQ.
Most recently, Marqeta returned to the fintech headlines with news of its partnership with Alviere. An embedded finance platform, Alviere is currently in the process of expanding across Europe, where it plans to operate as an Electronic Money Institution and Principal Member Card Issuer in the region. By partnering with Marqeta, Alviere will be able to issue branded cards to customers in the European Economic Area (EEA) and the U.K.
“Access to financial services is continuing to evolve, and consumers are constantly opening up to new ways of moving, storing, spending and saving money,” Alviere co-founder and CEO Yuval Brisker said. “For brands in Europe, and around the world, providing financial services means uncovering vast untapped opportunities. Embedding financial products under their existing business, products, and to their existing customer base, has quickly emerged as an important strategy for growth and customer retention.”
Marqeta’s platform supports issuance of both physical and virtual payment cards, as well as tokenization, card management, and fulfillment. Processing and settlement are also included, along with authentication and 3DS (3-D secure authentication), just-in-time (JIT) funding, and dynamic spend controls. Marqeta’s reliance on open APIs and webhooks enables institutions to create customizable card experiences, and seamless interaction with other applications, while providing visibility and transparency via notifications and card monitoring.
Alviere hopes to take advantage of what Simon Torrance forecasts to be a $7.2 trillion global opportunity in embedded finance by 2030. To empower non-financial brands with the ability to offer financial products and solutions to their customers, Alviere offers a suite of solutions including branded bank accounts and cards, global payments, payment processing, as well as crypto wallets and exchanges. The New York-based company’s partnership news with Marqeta arrives in the wake of Alviere receiving an investment of $70 million and the appointment of its first Chief Financial Officer.
“Financial services open up a new avenue of consumer engagement for brands and allow them to deepen the consumer experience massively,” Marqeta Chief Operating Officer Vidya Peters said. “We’re excited that Alviere will be able to allow its brand customers to build in new payments experiences using our platform.”
Marqeta and Plaid have teamed up to simplify and streamline the ACH transfer process to enable faster funding of financial accounts.
The collaboration is designed to provide both seamless account funding as well as additional security during data transfer.
Both Marqeta and Plaid made their Finovate debuts as part of Finovate’s developer conference series, FinDEVr.
A partnership between a pair of Finovate alums – card-issuing platform Marqeta and financial data network Plaid – will simplify ACH transfers to make it easier for customers to authenticate and fund their accounts.
Per the agreement, Marqeta customer cardholders will be able to transfer money seamlessly between customers and external accounts, as well as verify and link to external accounts faster. The company’s customers also will be able to keep cardholders informed on the status of fund transfers via real-time notifications, and better manage issues ranging from initiations to cancellations to return. Enhanced security is another benefit of the partnership. Marqeta customers no longer will need to store sensitive information from cardholders’ external bank accounts – relying instead on tokens while Plaid and Marqeta exchange necessary bank account information in the background.
“We’re making it as simple as possible for consumers to access their bank information from one application, and reduce the time it takes to fund and begin using their account,” Marqeta Chief Operating Officer Vidya Peters explained. “Through our Plaid integration, developers building on Marqeta can authenticate users’ bank accounts without the complexity and extra time associated with traditional ACH processing, creating an overall more seamless experience.”
Founded in 2010 and headquartered in Oakland, California, Marqeta is an alum of our developers conference FinDEVr Silicon Valley. The company’s card issuing platform provides businesses with the infrastructure, technology, and tools to build and manage their own payment programs. Last month, Marqeta announced that it has secured certification to operate in three countries in Southeast Asia – Singapore, Thailand, and the Philippines – which means the company’s platform is now enabled in 39 countries around the world. Marqeta announced that, with its further expansion into the Asia Pacific (the company is also active in Australia and New Zealand), it will establish an Asia Pacific regional hub in Singapore later this year.
Also a veteran of our developers conference, Plaid began 2022 with the launch of its data privacy solution, Plaid Portal. The new privacy tool is designed for customers who have used Plaid to connect their financial accounts to apps and services in the U.S. Plaid Portal allows account holders to see which apps have accessed their financial data and to control where the data is shared. The company calls the new offering “one of many tools” under development to give customers both greater visibility into and control over how their data is shared. Ideally, this additional transparency will help allay data privacy concerns and provide users with greater confidence when it comes to taking advantage of increasingly open nature of the modern digital financial ecosystem.
The Buy Now Pay Later (BNPL) revolution shows no signs of abating any time soon. A combination of newcomers, Buy Now Pay Later pioneers, and even credit card companies like Visa and Mastercard are figuring out new ways to integrate themselves into the biggest consumer commerce phenomenon since shopping by smartphone.
According to CNBC, which bases its analysis on data from FIS Worldpay, the Buy Now Pay Later market has an estimated value of $60 billion globally as of 2019 – though there are even higher estimates. Excluding China, this sum represents 2.6% of all e-commerce. And while BNPL represents less than 2% of sales in North America, the overall BNPL market, CNBC believes, could reach $166 billion by 2023.
Here is just a smattering of this week’s headlines from the Buy Now Pay Later beat that only underscores the velocity of the flight from credit cards and traditional consumer financing.
Stripe teams up with Klarna as BNPL competition from Square, PayPal intensifies
Klarna, a company with a long pedigree in providing consumers with alternative payment options, announced this week that it was partnering with ecommerce innovator and payments platform Stripe. The deal will enable Stripe customers in 20 countries to offer Klarna as a payment option to their customers. As part of the partnership, Klarna will use Stripe to accept payments from consumers in both the U.S. and Canada.
“Over the past years, Klarna and Stripe redefined the e-commerce experience for millions of consumers and global retailers,” Klarna Chief Technology Officer Koen Köppen said. “Together with Stripe, we will be a true growth partner for retailers of all sizes, allowing them to maximize their entrepreneurial success through our joint services. By offering convenience, flexibility, and control to even more shoppers, we create a win-win situation for both retailers and consumers alike.”
The partnership is widely seen as a way for Stripe to compete with payments rivals PayPal and Square, which have deepened their commitment to BNPL in recent months. Square agreed to acquire Australia’s Afterpay for $29 million in August. A month later, PayPalannounced its $2.7 billion acquisition of Japanese Buy Now Pay Later company Paidy.
Affirm partners with American Airlines to ease cost of holiday travel
In a move well-timed to take advantage of end-of-year travel trends, American Airlines has announced a partnership with Buy Now Pay Later innovator Affirm. The collaboration will enable eligible travelers to pay for the costs of airfare over time on an installment basis, providing them with “flexibility, transparency, and control,” according to Affirm Chief Commercial Officer Silvija Martincevic. Using Affirm, travelers can pay for flights costing at least $50 with monthly installments without having to pay late fees or worry about hidden charges.
“While consumers are as eager as ever to get away,” Martincevic said, “they remain conscious of fitting travel into their budget.” Martincevic cited a survey conducted by the company that indicated that 74% of Americans queried said they would spend more on holiday travel this year “than ever before,” but that 60% were worried that they would not be able to “afford to travel as they would like to.”
The offering is currently available only to select customers, but will be expanded to include more U.S. consumers in the weeks to come. The collaboration marks the first time that American Airlines has integrated BNPL options into its website.
Marqeta and Amount announce collaboration to help banks offer BNPL
The partnership announced this week between card issuing platform Marqeta and bank technology provider Amount will make it easier for financial institutions to get into the Buy Now Pay Later business. Marqeta and Amount have forged a virtual card and loan origination partnership that will enable banks to go to market with their own BNPL/virtual card offering in months. This will help them boost revenues, grow market share, and promote loyalty.
Echoing the challenge that banks and other financial institutions face from Big Tech and fintech alike, Amount CEO Adam Hughes pointed to the partnership with Marqeta as a way for banks to close the consumer expectations gap between themselves and more tech-savvy, tech-native enterprises entering the financial services space. “Banks must compete or continue to lose market share to digital challengers who offer a more flexible way for their customers to pay,” Hughes said.
Part of what makes the Marqeta/Amount partnership interesting is how it takes advantage of research that suggests that a significant number of consumers who have used BNPL would prefer it if the service came from their bank or credit card provider. Amount’s modular approach to BNPL is configurable, easy to deploy, and integrates readily with banks’ legacy platforms, giving FIs the ability to introduce BNPL offerings over a variety of different channels and payment methods.
Berlin-based Billie banks $100 million in funding
The latest reminder of the international growth of Buy Now Pay Later comes from the $100 million investment secured by Berlin, Germany-based, B2B Buy Now Pay Later startup, Billie. The Series C round was led by U.K.-based Dawn Capital and featured participation from Tencent and, interestingly enough, Klarna. In fact, Klarna’s investment comes in the wake of a strategic partnership with Billie in which the two companies will integrate their service to better leverage their core competencies, with Billie serving business customers and Klarna handling retail consumers.
“BNPL for B2B is still in its infancy phase,” Klarna CEO and co-founder Sebastian Siemiatkowski explained, “even though the demand has never been higher. We are here to solve problems and by being able to offer this service to our merchant partners together with Billie, we are doing just that.”
The Series C round gives Billie a valuation of $640 million, and is believed to be the largest B2B Buy Now Pay Later funding round to-date. Co-founder and co-CEO of Billie, Dr. Matthias Knecht noted that those companies buying from larger businesses and individual retailers are increasingly embracing a “digital-first” approach that includes not just “modern user interfaces, high limits for shopping carts, as well as real-time decisions for B2B” but options like BNPL, as well. “There is nearly no provider of a BNPL product (for these companies) like what Klarna offers for B2C,” Knecht said. “We aim to close this gap.”
Visa expands BNPL offerings in Canada via partnership with Moneris
International card company and financial services provider Visa has been making inroads of its own into the Buy Now Pay Later market. This week, the company made headlines in the Canadian fintech news space via a new collaboration with unified commerce company Moneris.
“We’re happy to be working with a trusted brand like Visa Canada on providing a buy now pay later option to Canadians,” Moneris Chief Product and Partnership Officer Patrick Diab said. “Bringing flexible payment methods like buy now pay later to our merchants helps them offer their customers more options when it comes time to pay.”
Courtesy of the new collaboration, merchants partnered with Moneris will be able to leverage Visa’s BNPL solution – Visa Installments – to give eligible Canadian credit cardholders access to installment payments on qualifying purchases. Cardholders can use the existing credit on their cards to pay for purchases in smaller, equal payments over a defined time period, with no additional, new service sign ups or requirement to apply for a new line of credit.
Moneris is set to begin offering Visa Installments to its customers by the spring of 2022.
CNBC Disruptor and Finovate alum Marqetaraised $1.2 billion in an initial public offering on the Nasdaq Exchange on Wednesday. The Oakland, California-based payment processor ended its first day as a public company with a market capitalization of more than $16 billion.
“We’re just scratching the surface of what’s possible with modern card issuing,” Marqeta founder and CEO Jason Gardner said in the company’s blog reporting the news. “I feel fortunate to be in the position I’m in, leading a company of incredibly talented people as we take the next step in enabling modern money movement for many of the world’s leading innovators.”
What does Marqeta’s IPO mean for the company going forward? And does the company’s public debut say anything about investors’ attitudes toward fintech and financial services companies more generally? Here are a handful of ideas.
The Coast is Clear!
A strong public debut for Marqeta could hint at an even more impressive performance by better-known fintechs like SoFi and Robinhood that are reportedly looking to go public later this year. Compared to payment processing, with all due respect, it is easy to imagine investors being enticed by an online lender transitioning to a broad-based comprehensive personal finance platform. And even if the meme stock mania of 2020 has cooled off a bit, I suspect that investors will be willing to line up around the proverbial block to get a piece of the fintech’s most notorious, no-fee online stock broker.
Public Investment = Public Scrutiny
Now a public company, Marqeta may face criticism over its business model, which relies heavily on interchange fees generated via transactions on its platform. Having issued 320+ million cards through its platform as of the end of March, and processing $60 billion in volume last year, the company itself noted in its prospectus that interchange fees are “subject to intense legal and regulatory scrutiny.” And while there are no clear changes to the regulatory environment in sight with regard to interchange fees, the fact that the now-public company will be more vulnerable to the appearance of “scrutiny” will be something for Marqeta to deal with – ideally by adding to and diversifying its revenue sources.
Playing the E-commerce Gold Rush
Marqeta was one of a number of fintechs that saw its business boom during the COVID-19 pandemic. The company reported that its revenue soared 2x to more than $290 million in 2020 as millions of locked down, quarantined, sheltered-in-place consumers flocked to digital channels to purchase a growing range of products and services online. The question for many companies, including Marqeta, is whether or not these trends will endure. Gardner points to the increase in ordering via on-demand services apps and the rise of buy-now-pay-later offerings as developments that could keep the pace of online commerce at a high level. If he is correct then Marqeta could have the time it needs to add more key customers (according to Financial Times, most of Marqeta’s business arrives via small business payments processor Square) and broaden out its network to better compete with rivals like PayPal.
For many, at least in fintech, the conversation on innovation has begun to shift from an emphasis on disruption to a focus on the possibilities of collaboration.
But the title of “Technology Disruptor” is still a coveted one, especially in the popular media where talking heads talk about technology trends like celebrities mincing down the red carpet on awards night.
CNBC has been culling the ranks of Technology Disruptors for nearly a decade and, this week, introduced its ninth CNBC Disruptor 50 list. The collection of technology companies is designed to highlight private firms that have helped lead the way out of the COVID-19 era “with business models and growth rates aligned with a rapid pace of technological change.”
See the full list at CNBC.com. For now, here’s a look at the four Finovate alums who made this year’s roster.
#7 Marqeta
Like most of the Finovate alums that made this year’s CNBC Disruptor 50 list, Marqeta was first introduced to our audiences via its participation in our developer’s conference FinDEVr SiliconValley 2016.
The company leverages its open API platform to enable its clients and partners to instantly issue and process card payments. With more than $528 million in funding, the Oakland, California-based firm is reportedly readying for a $100 million initial public offering later this year.
#38 Ripple
Does anyone remember OpenCoin? That was the company that Chris Larsen brought to FinovateSpring in 2013 to introduce a new virtual currency and distributed open source protocol called Ripple.
In the years since then, Ripple has grown into enterprise blockchain company with hundreds of customers in more than 55 countries who are using its solutions. The company’s XRP Ledger and digital asset XRP, running on Ripple’s global network, improve and enhance payment services for businesses around the world.
#39 Plaid
An alum of our developers conference FinDEVr, Plaid became a household word in the fintech community when Visa tried to acquire the company in January 2020. That plan was nixed by the U.S. Justice Department, but Plaid has continued on its innovative path to promote open finance via API.
Dedicated to helping connect people’s financial accounts to their apps, Plaid has added key insights to the data access it facilitates via a suite of analytics solutions such as its new income verification product, Plaid Income.
#40 Nubank
International fintech has always been part of the Finovate/FinDEVr beat. Back in 2016, a Brazilian financial services startup with the backing of an impressive array of venture capitalists demonstrated its unique approach to fintech development at FinDEVr New York 2016.
Today, that company, Nubank, is the biggest fintech in Latin America. The company operates as a challenger bank with more than 34 million customers and offices in Berlin and Mexico City, in addition to its São Paulo, Brazil headquarters.
Other fintechs that made this year’s CNBC Disruptor 50 are:
Global card issuing platform Marqetaunveiled today that it has been tapped by Goldman Sachs to power checking accounts for its Marcus brand.
The new digital checking accounts will launch for Goldman’s Marcus clients later this year, though there is no word on the exact timing.
Goldman selected Marqeta for its open APIs and webhooks and its developer experience, which was designed to power future-proofed banking experiences. The two also have a prior relationship, as Goldman Sachs is one of Marqeta’s previous investors.
“We’re incredibly proud to work with Marcus by Goldman Sachs to help power this work, which we think is a true validation of the power of our technology,” said Marqeta Founder and CEO Jason Gardner. “Our modern card issuing platform helps digital innovators build the sorts of customer experiences that can be industry game changers, and we’re looking forward to working alongside Marcus to bring a powerful new digital banking experience to life.”
Marcus currently offers limited consumer banking tools, including savings, certificates of deposits, and loans. The bank also partnered with Apple in 2019 to serve as the banking partner behind the Apple credit card. Expanding into checking accounts will help Goldman Sachs diversify from its traditional investment banking offerings and move further into the everyday financial lives of consumers.
Goldman’s expansion into checking accounts comes as no surprise. The bank announced its intentions in February of last year. And the partnership with Marqeta is a logical one. The California-based company offers a tech-forward approach and counts fintechs such as Square and Klarna among its clients.
Should other banks– challenger banks and traditional banks alike– be worried? Jim Marous answers that question in his piece Marcus: A Digital Bank That Should Keep Rivals Up At Night. “In the future, the Marcus brand will only grow,” said Marous. “With the addition of wealth management and eventually checking accounts that are 100% supported by a mobile app, financial institutions of all sizes should take note of the potential for Goldman Sachs to be a major player in the marketplace. If banks and credit unions are not paying attention today (when there is time to react), there is a good chance Marcus will be the source of nightmares going forward.”
A new study from McKinsey & Company suggests that European fintechs are experiencing an “existential crisis” as venture capital funding plunges “from surplus to scarcity.” The report compares the 11% drop in funding for fintech worldwide in the first half of the year with Europe’s far steeper decline in fintech funding of 30% over the same time period, and puts the blame squarely on the economic and social impact of the coronavirus.
But while the report anticipates a significant contraction in European economies – 11% this year with pre-crisis levels remaining elusive until 2023 – and that fintech is “already feeling the squeeze”, the authors note that there are a variety of advantages fintech has that could enable the industry’s most innovative players to emerge successfully if not stronger on the other side of the crisis. Among the main factors are:
The fintech sector has grown over the past six years by more than 25%.
Fintechs are native to the digital realm.
Fintechs are more efficient than many other businesses: with more efficient cost structures, “organizational agility,” and significant customer loyalty.
“As more incumbents struggle to adapt, the winners will be those that quickly recognize the changed context and that are most capable of responding with clear decisions and bold actions,” the report authors note. “Many organizations, both incumbents and startups, have adapted with surprising quickness and rapid decision making through the COVID-19 crisis. This new sense of possibility and potential should inform future action.”
Speaking of Europe – and on the heels of the big news of Yandex‘s agreement to buy Russian digital bank Tinkoff for $5.5 billion earlier this week – we took a look at our favorite Russian fintechs. Check out our Baker’s Dozen of fintechs from Moscow, St. Petersburg, and more.
To learn more about fintech in Russia, here’s an overview from last December that cites an Ernst & Young study that calls the country’s fintech industry “the third most developed market in the world.” This is based on the relatively high, 80% adoption rate of fintech services in Russia, and occurs despite a relatively low participation in fintech areas like securities investment, as well as savings and financial wellness.
“Basically we went from savings books to payments over mobile phone almost overnight,” said Roman Prokhorov, the head of the association Financial Innovations, who was quoted in the study. “Therefore, our consumers are more receptive to fintech innovations, and this explains the popularity of these services.”
Here is our look at fintech around the world.
Latin America and the Caribbean
JPMorgan Chase-based Brazilian fintech FitBank Pagamentos Electronicos plans expansion to the U.S. in the first half of 2021.
TechCrunch profiles Jefa, a challenger bank that caters to women in Latin America.
IFLR looks at the role regulators in Costa Rica will play in the development of the country’s fintech industry.
Asia-Pacific
Vietnamese credit scoring technology provider for micro, small, and medium-sized businesses Kim An Group secures Series A funding.
Could Malaysia be the “world pioneer” in Islamic fintech? Malaysia Digital Economy Corporation chairman Datuk Wira Rais Hussin makes the case.
The Business Times of Singapore highlights an S&P Global Ratings report on Thai consumers pushing Thai banks to embrace fintech.
Sub-Saharan Africa
Mono, a Nigerian API fintech startup that seeks to be the “Plaid of Africa,” raises $500,000 in pre-seed funding.
Lexology reviews the current state of fintech regulation in Kenya.
Innovation consultancy Beta-I partners with Angola National Bank to build the nation’s first regulatory sandbox.
Central and Eastern Europe
German fintech Vanta teams up with Marqeta to launch its credit card for startups.
Open banking platform Raisin partners with German financial solutions broker Procheck24.
Samsung, Visa, and Solarisbank AG work together to bring Samsung Pay to Germany.
Middle East and Northern Africa
Commercial Bank of Kuwait teams up with Thales Digital Solutions to drive mobile payments.
Could Saudi Arabia top Dubai in terms of fintech funding? Arabian Business looks at the growth of fintech in the Kingdom.
PYMNTS profiles Imad Aloyoun, CEO of Jordan-based payments platform Dinarak.
Central and Southern Asia
A joint project between U.K.-based Checkout.com and Pakistan’s National Institutional Facilitation Technologies (Nift) will bring new international payment options to the Pakistan.
Pakistan’s Silk Bank announces a partnership with MasterCard to boost credit card issuance in the country.
Times of India profiles Indian fintech MoneyTap, founded by Anuj Kacker.
Six companies that have demonstrated their fintech innovations on the Finovate stage have been recognized this year by CNBC as part of their Disruptor 50 roster for 2020.
This year’s list, the eighth in the series, is marked by the high number of billion-dollar companies, or “unicorns.” Fully 36 of the firms in the 2020 CNBC Disruptor 50 have reached or surpassed the $1 billion valuation mark. Combined, the 50 companies have raised more than $74 billion in VC funding and achieved an implied market valuation of almost $277 billion.
The companies making the cut range in industry from cybersecurity and healthcare IT to education and, of course, fintech. In fact, the top-ranked company in the 2020 Disruptor 50 is none other than Stripe, the $36 billion payments platform founded in 2010. Stripe earned a #13 ranking in last year’s Disruptor 50 roster, and likely owes its first place appearance this year to a major $600 million funding raising – the company’s largest to date – and the economic and social consequences of the global health crisis.
“With many people throughout the world under lockdown to prevent the spread of Covid-19,” CNBC’s capsule on the company noted, “the move to shopping online has never been greater. That’s good news for digital payments platform Stripe.”
Stripe was not the only fintech to earn high marks from the 2020 Disruptor 50’s methodology. In addition to the half dozen Finovate alums below, some of the other fintechs on this year’s roster include:
Virtual bank WeLab (Hong Kong)
Digital mortgage company Better.com (New York City)
“Buy now pay later” e-commerce company Affirm (San Francisco, California)
Challenger bank Chime (San Francisco, California)
Banking app Dave (Los Angeles, California)
Microfinancier TALA (Santa Monica, California)
Trading and investing platform Robinhood (Menlo Park, California)
Also earning spots in this year’s list were a pair of insurtech companies, Lemonade and Root Insurance, as well as cybersecurity and biometric authentication firms SentinelOne and CLEAR, respectively.
Here’s a look at the Finovate alums that made this year’s list.
