January 28, 2023

Mastercard (MA) Invests in Marqeta for Global Expansion

Mastercard Inc. MA made an undisclosed investment in the fintech company named Marqeta, which instantly issues cards and processes card payments with its open Application Programming Interface (API) platform.

The financial technology startup helps young companies including digital-only issue payment cards. These cards can be both virtual and physical debit or credit cards. Apart from issuing its own cards, the company enables businesses to process credit and debit card payments.

Since 2010, Marqeta quietly established itself as the underlying tech provider for businesses and digital-only banks in issuing them payment cards. As the entity looks to expand internationally and sign up customers around the globe, it received a strategic investment from Mastercard. The infusion of cash will streamline the company’s global network certification process, which is crucial since it determines the providers who can process payments through Mastercard’s network. The two companies have been working together since 2014 in Europe and North America.,

In 2017, Marqeta also received $25 million of funding from Visa Inc. (V), another industry leader.

Growth of the Internet and the use of smartphones for e-commerce left a big impact on financial transactions. Fewer people and businesses are paying and getting paid in cash, and card usage — both physical and virtual — is rising by the day. Evidently, the expanded partnership with Marqeta will lead to increased transaction processing for Mastercard, thus driving its revenues.
The company is poised to benefit from the shift in the payments space toward the digital mode, given its global payment network,  technologically advanced products and services, secure payment solutions and a strong brand name that is well-acknowledged by its customers.

Expansion of its click-to-pay service, payment via installment facilities, real-time payments and open-banking operations poise the company to increase its market share in the digital payments domain. The company’s digital and multi-rail solutions are helping it exploit the key opportunities by providing customers with choices aplenty and the abilities required to manage a wide range of payment flows in this fast-changing remittance industry.

Mastercard ranks second in the payments industry with Visa Inc. V holding the top spot, followed by American Express Co. AXP and Discover Financial Services DFS.

Mastercard carries a Zacks #3 (Hold), currently. In the past six months, the stock has gained 27% compared with its industry’s growth of 18.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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