Why major Fintech players choose Marqeta

In this clip from “3-Minute Stock Updates” on Motley Fool Live, recorded July 29Motley Fool contributors Ryan Henderson and Toby Bordelon take a look at card issuers Market (MQ -3.07%) and discuss what differentiates it from other companies in payment solutions.

Ryan Henderson: As it says, very scalable. You build it once and then it’s the building blocks for everyone else. It is a very small additional cost to have another customer come in and pick it up. I like the model. I think that translates well to a bunch of different industries.

Toby Bordelon: There are still many out there. So many payment things. So many payment systems. What’s their advantage here versus others that aren’t that everyone wants to do this kind of thing.

Henderson: Yes, it is in a niche position. Just to be clear, they build application programming interfaces, APIs — I think that’s what it stands for — that the other companies can implement for card issuance. The other problem is that people always think they have like a printer in the basement where they just print cards, and that’s not really what it is. There’s a lot of programming that goes beyond, let’s say it’s a mobile card, either as a digital card, not necessarily physical. There is a lot of programming that is in the back end designed to process payments. They can provide businesses with very simple features that they can use.

Let’s say you run as DoorDash, such as all of their DoorDash drivers. DoorDash will say, fine, they can use our card to buy the items when they get to the restaurant, but it has to be the exact amount the item was purchased for, has to be the exact item. It is able to program and customize all these solutions. It lends itself really well to these new fintech providers and is easy to implement. You just plug that API into your codebase. It’s free to use, costs to scale because you pay for it every time you use it.

It is difficult to get rid of. The only company I’ve ever seen get rid of something like this was Uber with Twilio. Once it’s part of your code base and you’ve really scaled the business, it can be a pain to go in and change everything and build the product in-house, especially when it only takes, say, 1% of revenue. It’s probably not worth it, the return on spend is probably not worth it there. I don’t know if there are that many competitors. I know Adyen has provided a small competitor, but the major fintech players choose to choose Marqeta instead.