As embedded finance providers race to move beyond standalone debit cards, Marqeta’s latest earnings on May 5 showed how card issuing platforms are being asked to support a broader mix of lending, buy now, pay later (BNPL) and credit-building products on a global scale.
CEO Mike Milotich said on the company’s earnings call that “multinational card issuers are becoming more and more common as card growth shifts from local banks to FinTechs and enterprises looking to support their customers in many geographies.”
Milotich added that embedded finance providers are looking for “an integrated continuum of products that span debit and credit,” allowing them to serve consumers and small businesses through different stages of their financial lives.
The comments came as Marqeta reported first-quarter total processing volume (TPV) growth of 33% year over year to $112 billion, with lending and BNPL activity remaining among the company’s fastest-growing categories.
Milotich repeatedly emphasized during the call that the market for card issuing is changing from a world centered on either debit or revolving credit into one where issuers want programmable combinations of debit, BNPL, secured credit and installments tied together under a single credential.
“There’s really this continuum where you could start with someone in debit, and then you could start to give them some transaction-based lending,” Milotich said during the analyst Q&A. “With the Flexible Credential, now you could do that on the same card.”
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Card Programs Expand
Executives pointed to multinational expansion as another major driver of growth for card issuing programs.
Milotich said 12 of Marqeta’s top 15 customers now use its platform in more than one country, while six customers operate across at least five countries.
Analysts pressed management on whether demand for secured credit and flexible credential programs is broadening across the industry.
“We’re seeing more and more demand,” Milotich said. “If you’re a FinTech or you’re an embedded finance company, you want to be able to serve the entire spectrum of your customer base.”
The company also discussed emerging stablecoin-linked card programs, which management said could allow consumers to spend local fiat currencies from stablecoin balances through traditional card credentials. Larger financial institutions are beginning to explore modernization efforts using virtual card and embedded lending capabilities without fully replacing existing infrastructure.
Profitability Milestone
CFO Patti Kangwankij said the company’s financial results reflected both continued growth in lending programs and tighter operational discipline.
“Most notably, we achieved GAAP profitability in the quarter with net income of $8 million,” she said.
Kangwankij said lending, including BNPL, continued growing at “nearly 60%” year over year, while expense management volumes remained above 40% growth.
Executives also said non-Block processing volumes continue to grow more than twice as fast as Block-related volumes, helping diversify Marqeta’s customer concentration.
Despite concerns about consumer spending and macroeconomic conditions, management said it has not yet seen major changes.
“We are not currently seeing any notable shift in spend or consumer behavior,” Kangwankij said while reiterating the company’s full-year revenue and gross profit guidance. Shares were down 3% in after hours trading on Tuesday.
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