How Does Marqeta Make Money? The Marqueta Business Model In A Nutshell

Marqeta is the world’s first modern card issuing platform and was founded in 2009 by Jason Gardner. Marqeta derives most of its revenue from interchange fees. The company works exclusively with banks not subject to regulation to maximize the interchange fee it collects.

History of Marqeta

Gardner created the company because he wanted to disrupt the outdated payment card issuing and processing industry with new technologies. Specifically, he envisioned an industry where an open API would allow card issuers to design and build their own products. This they could do more simply without having to follow the rules and regulations of larger, more established card and transaction processors. 

Marqeta was officially introduced to the market in 2010 and was the first new payment processing platform for over twenty years. The platform allows businesses to create physical, virtual, or tokenized single or multi-use debit and credit cards. Some of the company’s major clients include Instacart, DoorDash, Uber, Square, and Kabbage.

Today, the Marqeta platform enables developers to launch new card programs with speed and flexibility. Importantly, the technology gives companies the opportunity to track real-time data and analytics as their needs evolve. It also allows them to detect potentially fraudulent transactions.

A recent IPO saw the company achieve a $16 billion market cap on the NASDAQ. Marqeta currently employs more than 350 people in locations across the US, UK, Canada, and Europe, with a new headquarters opened in Melbourne for the Asia-Pacific region in April 2021.

Marqeta mission, vision and core values

Marqeta’s vision is “to be the global standard for modern card issuing.”

And its vision is “to empower builders to bring the most innovative products to the world.”

Marqeta addresses its vision and mission through seven core values above.

A glance at Marqeta business model

As the company explains in its prospectus:

When you order food using DoorDash or groceries using Instacart, modern card issuing works in the background as money moves from the app to the delivery driver’s payment card, allowing the driver to pay for exactly what you ordered, and nothing else.

The digital enterprise ecosystem that Marqeta sustains through its financial platform (Image Source: Marqeta prospectus).

Therefore, Marqeta is the intermediary layer, which enables players like Klarna, DoorDash, Square, and many others and it “provides a single, global, cloud-based, open API Platform for modern card issuing and transaction processing.”

How Marqeta integrates in the current payment infrastructure workflow to enable more complex payment options for consumers (Image Source: Marqeta prospectus).

More precisely the Marqeta Platform offers three primary capabilities:

  • Marqeta Issuing: enabling customers to issue physical, virtual, and tokenized cards.
  • Marqeta Processing: enabling customers to process transactions with control and speed.
  • and Marqeta Applications: offering a set of appications covering the entire payments lifecycle, including development tools; program administration; and fraud, cases, and chargebacks.

These features are used to launch, scale, and manage card programs.

Since Marqeta’s business model is cloud-based, with an open API Platform that delivers cards, its main customers are developers, technical product managers, and entrepreneurs at innovative companies.

Marqeta revenue generation


Perhaps somewhat ironically, the Marqeta revenue generation strategy is similar to the strategies of the companies it is trying to disrupt. These include payment processors such as Visa and Mastercard. 

As such, the company generates most of its revenue from interchange fees. These are fees a merchant bank pays a card-issuing bank whenever a customer purchases with an eligible debit or credit card.

Where Marqeta differs from its peers lies in the total share of the interchange fee it collects. In the company prospectus, it notes that “Our agreements with issuing banks provide that we receive 100% of the interchange fees for processing our customer’s card transactions.” 

This gives the company a competitive edge in the debit card market. Here, Marqeta has partnered with banks with less than $10 billion in deposits who are exempt from regulation on how much they can charge as an interchange fee. By partnering with banks that are not subject to regulation, the company can earn higher interchange fee rates. 

Interchange fees are likely to represent a lucrative source of income for the company. The company captured 1% of the $6.7 trillion transaction volume in the United States alone last year, representing about $60 billion.

Other fees

Though most income is derived from interchange fees, the company also generates revenue from processing services. 

Revenue is earned by charging fees for services such as monthly platform access and ATM withdrawals. The company also charges for its Tokenization as a Service (TaaS) functionality, enabling consumers to protect sensitive card data by replacing it with surrogate data in the form of a token.

Key takeaways:

  • Marqeta is the world’s first modern card issuing platform founded by Jason Gardner in 2009. The platform was created to revolutionize the outdated card payment and issuing industry
  • Marqeta derives most of its revenue from interchange fees. The company works exclusively with banks not subject to regulation to maximize the interchange fee it collects.
  • Marqeta also collects fees on a variety of ancillary services, including tokenization and fraud monitoring. The company also charges a monthly fee for access to its API platform.

Connected FinTech Business Models

Affirm Business Model

Started as a pay-later solution integrated to merchants’ checkouts, Affirm makes money from merchants’ fees as consumers pick up the pay-later solution. Affirm also makes money through interests earned from the consumer loans, when those are repurchased from the originating bank. In 2020 Affirm made 50% of its revenues from merchants’ fees, about 37% from interests, and the remaining from virtual cards and servicing fees.

Afterpay Business Model

Afterpay is a FinTech company providing as a core service the “buy now pay later” solution. When a consumer purchases a product, Afterpay pays the seller and asks the consumer to pay 25%. The remaining 75% is paid in three, fortnightly installments that are also interest-free. Afterpay, in turn, makes money via merchant and late fees.

Quadpay Business Model

Quadpay was an American fintech company founded by Adam Ezra and Brad Lindenberg in 2017. Ezra and Lindenberg witnessed the rising popularity of buy-now-pay-later service Afterpay in Australia and similar service Klarna in Europe. Quadpay collects a range of fees from both the merchant and the consumer via merchandise fees, convenience fees, late payment, and interchange fees.

Klarna Business Model

Klarna is a financial technology company allowing consumers to shop with a temporary Visa card. Thus it then performs a soft credit check and pays the merchant. Klarna makes money by charging merchants. Klarna also earns a percentage of interchange fees as a commission and for interests earned on customers’ accounts.

SoFi Business Model

SoFi is an online lending platform that provides affordable education loans to students, and it expanded into financial services, including loans, credit cards, investment services, and insurance. It makes money primarily via payment processing fees and loan securitization.

Chime Business Model

Chime is an American neobank (internet-only bank) company, providing fee-free financial services through its mobile banking app, thus providing personal finance services free of charge while making the majority of its money via interchange fees (paid by merchants when consumers use their debit cards) and ATM fees.

How Does Venmo Make Money

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FinTech Business Models

Fintech business models leverage tech and digital to enhance the financial service industry. Fintech business models, therefore, apply tech to various financial service use cases. Fintech business model examples comprise Affirm, Chime, Coinbase, Klarna, Paypal, Stripe, Robinhood, and many others whose mission is to digitize the financial services industry.
Splitit is a fintech company founded by Israeli entrepreneurs Gil Don and Alon Feit in 2009. The platform was initially created to allow consumers to use existing credit to make BNPL purchases. Splitit relies on transaction fees to make money, with the exact fee depending on how and when the merchant chooses to be paid.  Splitit does not charge consumers for late or missed payments. Nor does it charge interest on purchases. Instead, the company relies on transaction value and mass consumer uptake to make money.

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