Marqeta Becomes First Issuer Processor in the US Certified to Enable Visa Flexible Credential

Rhea-AI Summary

Marqeta (NASDAQ: MQ) has become the first issuer processor in the US certified to enable Visa Flexible Credential, working with Visa and Affirm. This innovation allows a single card product to toggle between payment methods, including debit, credit, 'pay-in-four' with Buy Now, Pay Later (BNPL), and rewards points. Marqeta achieved certification in May 2024, with Affirm set to launch the service later this year.

The move responds to consumer demand for greater payment flexibility and personalization. Marqeta's 2023 State of Credit Report found that 46% of consumers cite convenience as the biggest benefit of credit cards, while 71% of US BNPL users expressed interest in accessing additional financial services through their BNPL provider.

Positive

• First US issuer processor certified for Visa Flexible Credential
• Partnership with major players Visa and Affirm
• Enables multiple payment options on a single card
• Aligns with consumer demand for payment flexibility and personalization
• Potential to improve consumer purchase experience and increase merchant acceptance

Negative

• None.

Insights

Financial Analyst

Marqeta's certification as the first U.S. issuer processor for Visa Flexible Credential marks a significant milestone in the payments industry. This innovation allows for multiple payment methods on a single card, potentially increasing transaction volumes and revenue streams for Marqeta (NASDAQ: MQ).

The partnership with Visa and Affirm positions Marqeta at the forefront of consumer payment flexibility, which could drive customer acquisition and retention. The ability to toggle between payment methods addresses the growing consumer demand for personalized financial solutions, as evidenced by Marqeta's own research showing 46% of consumers citing convenience as a primary benefit of credit cards.

From an investor's perspective, this development could enhance Marqeta's competitive edge in the card issuing platform market. The potential for increased transaction volumes and deeper integration with major financial players like Visa and Affirm may lead to improved financial performance in the medium to long term.

However, it's important to note that the impact on Marqeta's financials will depend on the adoption rate of this new technology and its ability to monetize the service effectively. Investors should monitor upcoming quarterly reports for signs of revenue growth and margin improvements directly attributable to this innovation.

Market Research Analyst

The introduction of Visa Flexible Credential through Marqeta's platform aligns perfectly with current consumer trends in the payments sector. Our research indicates a growing demand for payment flexibility and personalization, which this technology directly addresses.

The statistic that 71% of U.S. BNPL users would be interested in accessing additional financial services through their BNPL provider is particularly telling. This suggests a significant market opportunity for Marqeta and its partners to capture a larger share of consumer spending across various payment methods.

Moreover, the collaboration between Marqeta, Visa and Affirm creates a powerful ecosystem that could potentially disrupt traditional payment models. By offering a seamless experience across debit, credit, BNPL and rewards points, this solution caters to the evolving preferences of modern consumers who seek convenience and optionality in their financial transactions.

From a market perspective, this innovation could accelerate the shift away from traditional single-function payment cards, potentially reshaping the competitive landscape in the payments industry. Companies that fail to offer similar flexibility may find themselves at a disadvantage in attracting and retaining customers.

Tech Expert

The technological achievement of Marqeta in becoming the first U.S. issuer processor certified for Visa Flexible Credential is noteworthy from an innovation standpoint. This development represents a significant leap in payment processing technology, enabling a level of flexibility previously unseen in the industry.

The ability to toggle between different payment methods on a single card requires sophisticated backend systems and real-time decision-making capabilities. Marqeta's success in implementing this technology demonstrates their advanced technical prowess and ability to integrate complex financial services into a seamless user experience.

From a technical perspective, this innovation likely involves:

• Advanced API integrations between Marqeta, Visa and financial service providers like Affirm
• Real-time payment method switching algorithms
• Enhanced security measures to protect multi-modal financial transactions
• Sophisticated user interfaces for consumers to manage their payment preferences

The successful implementation of this technology could position Marqeta as a leader in next-generation payment processing. It also opens up possibilities for further innovations, such as AI-driven payment method optimization based on user spending patterns and financial goals.

However, with great technological advancement comes great responsibility. Marqeta will need to ensure robust security measures and seamless performance to maintain trust and adoption among consumers and financial institutions alike.

Working with Visa and Affirm, Marqeta will enable the ultimate flexible payment experience for consumers by providing access to different funding sources on one payment card for the first time

OAKLAND, Calif.--(BUSINESS WIRE)-- Marqeta (NASDAQ: MQ), the global modern card issuing platform that enables embedded finance solutions for the world’s innovators, today announced it is working with Visa and Affirm to offer the Visa Flexible Credential, a single card product that can toggle between payment methods, putting the power of choice in the hands of the consumer. Marqeta achieved certification with Visa Flexible Credential in May 2024, which will enable cardholders of Marqeta’s participating customers to easily set parameters or choose whether they use debit, credit, “pay-in-four” with Buy Now, Pay Later or even pay using rewards points.

As previously announced, Visa Flexible Credential will be first launching in the U.S. with Affirm later this year. This will provide consumers with the potential opportunity to benefit from Visa’s acceptance, the simplicity and ease of Marqeta’s platform, and Affirm’s technology and underwriting capabilities in Buy Now, Pay Later. Affirm's decision to have its industry-leading technology and underwriting capabilities, beginning with Affirm Card, run on Visa’s Flexible Credential demonstrates the opportunities that can arise when issuer processors innovate like Marqeta.

Consumers are increasingly seeking greater flexibility and more options around ways to pay. The Marqeta State of Credit Report in 2023 found that when searching for their next credit card, consumers surveyed reported being most influenced by the level of flexibility and personalization available, with 46% citing convenience as the biggest benefit of using credit cards. Additionally, 71% of U.S. BNPL users surveyed would be interested in accessing other financial services through their BNPL provider, demonstrating the willingness for consumers to seek out additional payment options that are the best fit for their current financial situation and lifestyle.

Marqeta is the first issuer processor in the U.S. certified for Visa Flexible Credential, enabling participating Marqeta customers to offer multiple types of payment options on a single card, creating a streamlined and frictionless payment experience regardless of what payment method they choose. This also helps Marqeta customers improve the consumer purchase experience and increase merchant acceptance.

“Marqeta is at the forefront of what’s possible in payments. We’re proud to be the first issuer processor in the U.S. certified for Visa Flexible Credential,” said Simon Khalaf, CEO, Marqeta. “Combining the ubiquity and acceptance of Visa, with Affirm’s technology, underwriting and consumer experience with the simplicity and seamlessness of Marqeta’s platform is a win-win-win for consumers, merchants, and issuers. We look forward to continuing to work with our partners to enable new technologies that make payments simpler and more flexible for consumers, helping them get the most out of their payment cards.”

About Marqeta (NASDAQ: MQ)

Marqeta’s modern card issuing platform empowers its customers to create customized and innovative payment cards and embedded finance offerings. Marqeta’s platform, powered by open APIs, gives its customers the ability to build more configurable and flexible payment experiences, accelerating product development and democratizing access to card issuing technology. Its modern architecture provides instant access to highly scalable, cloud-based payment infrastructure that enables customers to launch and manage their own card programs, issue cards and authorize and settle transactions. Marqeta is headquartered in Oakland, California and is certified to operate in more than 40 countries globally. For more information, visit www.marqeta.com, Twitter and LinkedIn.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements expressed or implied in this press release include, but are not limited to, quotations and statements relating to changing consumer preferences; increasing consumer adoption of certain digital payment methods, products, and solutions; which payment, banking, and financial services products and solutions may succeed; technological and market trends; Marqeta’s business and growth; Marqeta’s products and services; and statements made by Marqeta’s senior leadership. Actual results may differ materially from the expectations contained in these statements due to risks and uncertainties, including, but not limited to, the following: any factors creating issues with changes in domestic and international business, market, financial, political and legal conditions; and those risks and uncertainties included in the “Risk Factors” disclosed in Marqeta's Annual Report on Form 10-K, as may be updated from time to time in Marqeta’s periodic filings with the SEC, available at www.sec.gov and Marqeta’s website at http://investors.marqeta.com. The forward-looking statements in this press release are based on information available to Marqeta as of the date hereof. Marqeta disclaims any obligation to update any forward-looking statements, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725208527/en/

James Robinson

530-913-0844

jrobinson@marqeta.com

Source: Marqeta

FAQ

What is Marqeta's (MQ) role in the Visa Flexible Credential program?

Marqeta (MQ) is the first issuer processor in the US certified to enable Visa Flexible Credential, working with Visa and Affirm to offer a single card product that can toggle between multiple payment methods.

When did Marqeta (MQ) achieve certification for Visa Flexible Credential?

Marqeta (MQ) achieved certification with Visa Flexible Credential in May 2024.

What payment options will be available through Marqeta's (MQ) Visa Flexible Credential?

Marqeta's (MQ) Visa Flexible Credential will enable cardholders to choose between debit, credit, 'pay-in-four' with Buy Now, Pay Later, and even paying using rewards points.

When is Affirm planning to launch the Visa Flexible Credential with Marqeta (MQ)?

Affirm is planning to launch the Visa Flexible Credential with Marqeta (MQ) later in 2024, as the first implementation of this technology in the US.