The Marqeta platform, which carries out card issuance activities, last Monday, November 4, as part of the earnings call for the third quarter of 2024, announced information about its plans, including those related to upcoming cooperation and the launch with VisaFlex Credential this week.
It is worth noting that the financial performance of the mentioned company’s business for July-September of the current year turned out to be below analysts’ preliminary expectations. Against this background, the value of shares of the firm fell by almost 32% during the day’s trading. At the same time, company officials, despite financial indicators that did not meet expectations, informed analysts that they expected to see growth. This optimistic outlook is related to the implementation of the development process of the connected economy and the fact that consumer demand for digital payment transactions is on an upward trajectory.
Marqeta chief executive officer Simon Khalaf said during the earnings call for the quarter ended September 30 that the days of maintaining the status quo are numbered as consumers and businesses want modern financial products. According to him, the process of modernizing payment transactions began more than ten years ago on the acquiring side. At the same time, he noted that over the past five years, the corresponding tendency has accelerated on the side of the issuer’s more complex processing issuer. According to him, this transformation continues to be at an early stage, despite the significant progress already made in the context of the appropriate dynamic. Simon Khalaf stated that Marqeta currently accounts for only about 2% of the issuer’s operations in the markets where the company is present.
Answering questions during the earnings call, the head of the firm announced that the brand is preparing to launch a functional solution using flexible Visa credentials this week. Also, according to him, next week the company will begin the expansion stage of this new functional solution.
It is worth mentioning that in May Visa announced its Flexible Credentials offering. The relevant data allows users to access multiple accounts and toggle between payment methods, including credit, debit, and Buy Now, Pay Later (BNPL).
Last week, Marqeta presented the new Marqeta Flex solution. The corresponding solution is designed to increase the availability of BNPL options for consumers. In this case, customers can view personalized BNPL options in their payment apps. The new solution also provides expanded access to providers of the mentioned category services for card issuers and digital wallets.
The total processing volume (TPV) of Marqeta for the third quarter of 2024 was fixed at $74 billion. This indicator increased by 30% compared to the result for the same period last year. The company’s net revenue for the quarter ended September 30 was fixed at $128 million. This indicator showed an increase of 18% year-on-year. The company’s gross profit for the third quarter of 2024 was fixed at $90 million. This indicator increased by 24% year-on-year.
Simon Khalaf stated that the mentioned positive results are related to the operational discipline and the launch of new innovative products. It is worth noting separately that the increase in indicators does not negate their negative discrepancy with preliminary expectations.
Simon Khalaf also stated that Marqeta’s true growth trajectory was back after the company lapped the Block contract renewal, which was combined with the announcements of several new products that further enhance the firm’s platform by providing large-scale payment solutions that transform it.
It is worth noting that the company characterizes new products as examples of its dynamic and ongoing growth. In the context of the firm’s new solutions, it is worth mentioning the portfolio migration service, which simplifies the process of moving existing card programs to its platform. The effectiveness of this product has been proven by the successful migration of millions of Klarna cards.
As for other solutions, Marqeta Flex offers a new way to integrate BNPL options into payment apps and wallets. In this case, accessibility and personalization for consumers increases. Affirm and Klarna are the first BNPL service providers to use the mentioned solution.
The UX Toolkit provides customizable components for building modern payment interfaces. As part of this solution, Marqeta customers can create a more user-friendly user interface with less development effort.
As we have reported earlier, Marqeta Buys Power Finance for $275 Million.
