Simon Khalaf, Chief Product Officer at Marqeta.
Marqeta makes Gen Z push with BaaS products for its customers
Crypto exchange Coinbase is among the first to have signed up for the fintech’s BaaS offering.
Fintech company Marqeta, looking to cement its position in the banking industry’s transformation to BaaS, has rolled out Marqeta for Banking, a new banking-as-a-service (BaaS) platform for customers.
The platform boasts over three-dozen APIs and a number of banking-related products across ACH, instant funding, and direct deposits offered through Marqeta's bank partners. The move comes in the midst of an executive shuffle in which Marqeta founder Jason Gardner is stepping down from the helm as CEO.
Simon Khalaf, Chief Product Officer at Marqeta, told AltFi that the banking industry is in the early innings of a shift in consumer behavior—one fueled by younger generations—that will fundamentally change how account holders interact with their financial services providers.
“What will the idea of a bank mean to Gen Z? This is going to be the next generation of financial services customers. They prefer mobile-first experiences, expect instant payment capabilities, and will likely choose financial services provided through a brand they have an affinity with vs. a traditional banking branch location.”
To that end, Marqeta is positioning itself right in the middle of this banking transformation to capitalize on the growing trend. Marqeta's BaaS products include:
Demand Deposit Accounts
Direct Deposit with Early Pay
ACH with Plaid Integration
Cash Loads and Fee-Free ATMs
Instant Funding capabilities
All the products are available in the US, while Bill Pay and Instant Funding are in the pipeline in beta for early 2023.
So far, they’ve signed up cryptocurrency exchange Coinbase, payments company Branch, and bitcoin rewards debit card Fold. Target customers include “brands embedding financial services for the first time, fintechs expanding from point-solutions into broader banking products, and existing challenger banks,” Khalaf told AltFi.
It is not surprising to see crypto firms flocking to Marqeta’s BaaS platform considering the challenges consumers have faced relying on traditional payment rails to facilitate crypto transactions at the till, such as lengthy transaction times or security risks.
“In partnering with leaders in the crypto space, like Coinbase, for example, we’re working to provide a seamless user experience in which consumers can earn and spend crypto by converting to fiat with less friction. Marqeta for Banking provides an expanded toolset for increasing consumer access to using crypto — whether that’s earning crypto rewards through a customer like Fold or leveraging banking services as a Coinbase user,” Khalaf added.
Marqeta is harnessing its card issuing prowess to differentiate its products, giving customers the ability to tailor their own banking and card programs instead of being locked into what Khalaf described as a ‘product in a box’ approach.
"Marqeta’s earliest customers were developer-led companies that expected flexible, open API technologies, like Instacart, Google, Uber, and Doordash. As these innovators started to build their own payments solutions, the range of customers who needed to build financial services into their products quickly expanded. We empowered these groundbreaking companies with a platform that delivered the control and flexibility needed to build innovative payments experiences," he said.
BaaS has already taken the financial services industry by storm, and now it’s about the next phase of growth.
“Scale and customization are the frontiers right now — how can banking products be brought to market quickly, customized for unique user experiences, and delivered at scale?” Khalaf posed, pointing to the foundation of Marqeta’s modern card-issuing platform as the solution to these challenges.
Incidentally, legacy bank JPMorgan recently announced early direct deposit for its customers in a bid to contend with nimbler fintechs.