Hey Fintechers and Fintech newbies 👋🏽

Jas Shah here, reformed engineer and now fintech product consultant, advisor, and occasional writer. You'll be familiar with my product insights and writing if you caught my Plaid deep dive in November or the PayPal overview before that. 

I'm back with another deep dive, this time on a fintech that I feel is particularly underrated in terms of its impact on the industry, in a domain that few truly understand, and– in a time where speed to market and building robust solutions matters most– its valuable role in facilitating sustained innovation in the fintech ecosystem. 

I am of course talking about Marqeta.  

It's known as a global modern card issuing platform but they are much more than just card issuer-processors. That's what I'll outline in this deep dive, touching on the early days and some of their evolution. 

This one will be slightly different though. 

Instead of doing a deep dive into Marqeta's product stack, new features, and some of the usual company specific insights, I'm outlining the value of issuer-processors more broadly, looking at what fintech innovators expect from providers, where the industry is heading, and what the successful industry players will have to do to keep up with rapidly evolving tech environment.

Here’s what to expect:

• Marqeta’s cool origins and parallels with first ever payment card
• A brief timeline from founding in 2010 to today
• What does an issuer-processor actually do?
• Parallels between great issuer-processors and wedding planners
• The Speculative Now, Next and Later of issuer-processing
• Why API-Driven platforms, Payment Nerds, and AI will be key to the future of fintech innovation

println("Hello, Card World!") 👋🏼

The origins of Marqeta are super interesting and have fun parallels with the inception of the very first payment card.

Marqeta traces its origins back to a restaurant table when Marqeta founder Jason Gardner was out for dinner with his friend Sukhy Singh,

In 2009, fresh off the sale of his previous startup PropertyBridge, Jason Gardner was searching for his next big idea in payments. In late 2009, inspiration struck in an unlikely place: a casual sushi dinner with his friend Sukhy in San Francisco

Much like the famous 1950 business dinner where Frank McNamara realised he’d forgotten his wallet – sparking the invention of the Diners Club card​– Gardner’s dinner would prove pivotal for the world of cards.

Inspiration struck after discussing ideas for next ventures when Sukhy pulled out a pile of physical Groupon coupons and said:

“You’re a payment nerd. Try to put these on a card.”

The challenge stuck with Gardner. Later that night he began sketching out a system where users could store multiple deals or offers on a single prepaid card, eliminating the hassle of paper coupons.

By 2010, Gardner launched Marqeta, initially building a consumer-facing Marqeta Card that allowed users to preload discounts and rewards for specific merchants. 

The idea had promise, but scaling a consumer payments product required massive capital, as well as a lot of time. 

More critically, Gardner realised his true passion wasn’t in running a loyalty-driven consumer-facing business—it was in the technology behind card issuing itself. 

He’s a payments nerd after all.

He also saw that the real bottleneck wasn’t just getting consumers to use a new kind of payment card—it was the complexity of issuing and processing cards in the first place.

By shifting his focus from consumer-facing innovation to developer-friendly infrastructure, Gardner pivoted Marqeta into something much more powerful: an API-driven issuer-processor that could enable the next generation of fintechs.

The Marqeta known and used by many prominent fintechs and retailers today was born and the rest is history.

Growth of the Engine Powering Modern Payments 📈

Founded in 2010 by Jason Gardner, Marqeta set out to modernise card issuing and processing, enabling businesses to create custom payment experiences. While the payments industry was dominated by legacy processors, Marqeta built an API-driven platform that gave fintechs, banks, and enterprises the tools to launch and manage virtual, physical, and tokenized cards at scale.

2010 - 2012: The Foundations of Payments Innovation

• Marqeta is founded in Oakland, California, by Jason Gardner.
• Raises Series A funding to develop its initial product.

2013 - 2015: The API-Driven Breakthrough

• Series B & Series C funding rounds to fuel growth.
• Launches public API, making it easier for developers to build card programs.
• Introduces Just-in-Time (JIT) Funding, enabling real-time transaction approvals.

2016 - 2018: Scaling Up and Expanding Internationally

• Launches Apple tokenized product, expanding digital wallet capabilities.
• Raises Series D funding to accelerate expansion.
• Reaches 200 employees, marking a significant growth milestone.
• Opens London office, expanding into the UK and European markets.

2019 - 2021: Hypergrowth, IPO, and Global Reach

• Raises Series E funding, securing capital for further expansion.
• Goes live with transactions in the EU, strengthening its global footprint.
• Launches live transactions in Australia, tapping into another key market.
• IPO in June 2021, officially becoming a public company.
• Surpasses 500M cards issued, demonstrating its scale and industry impact.

2022 - 2024: Becoming a Global Payments Infrastructure Leader

• International expansion, supporting over 40 countries.
• $200B in annual transaction volume, showcasing its role in global payments.
• Launches Banking-as-a-Service (BaaS) platform, extending its fintech offerings.
• Acquires Power Finance to provide end-to-end consumer and commercial credit capabilities.
• Expands into Brazil, tapping into a high-growth fintech market.
• Surpasses $1B in daily transaction volume, reinforcing its scale and reliability.

Today, Marqeta has an annual TPV of over $200B, passed the milestone of $1 billion TPV in a single day last year and does this by serving fintech giants and global enterprises. As the fintech environment evolves with payments, identity, loyalty and embedded finance all converging, Marqeta continues to position itself as the infrastructure/glue layer for the next generation of payments innovation.

Pressing the Issue: The Role of Issuer-Processors 💳

As I mentioned, this deep dive is slightly different. 

Rather than dive into the specifics of Marqeta and how they do things, similarly to Jason in those early days–pivoting from a consolidated gift card to an infrastructure layer for innovation– I'm zooming out and looking at the broader issuer-processor challenge I can solve here. 

To me, that's the lack of understanding of what they do. 

The role of issuer-processors, like Marqeta and others, is often misunderstood. 

I've seen that confusion first-hand.

I've heard conversations where Marqeta and other issuer-processors are directly compared to Stripe and Square, for example. 

They are fundamentally different. 

An issuer-processor is not the same as a Payment Facilitator (although I have outlined that Stripe is more than a PayFac in a previous edition) or the same as a Core Banking provider.  

Those who are deep in it or have used them to build out a card program, as I've done in years gone by, have a direct understanding of their specific value to the broader ecosystem and know the differences. But the rise of the term BaaS to describe the plethora of banking and payments tech service providers that enable fintech innovation has meant that providers that serve very different functions have been lumped together, and their differing value, homogenised. 

That does a massive disservice to the role they play at the heart of cards and payments innovation.

So, to shed light on some of that value, let's take a quick look at the various aspects required to stand up a card programme and some of the key areas IPs provide valuable products and expert services through a Jobs to Be Done style view.

The Card 💳

Creating and managing payment cards, crucial for letting fintechs quickly give customers secure cards to use.

• Card Issuance: Issuer-processors enable businesses to create, manage, and distribute virtual, physical, and tokenized cards. Whether it’s corporate expense cards, BNPL cards, gig worker payouts, SME finance spending or digital banking cards—issuer-processors make them possible.
• Card Printing: Direct connections with key card providers and an understanding of formats, timelines, and what is possible. Technically part of Card Issuance but important to call out as a programme with straight-through issuance, printing and distribution is often overlooked.
• Customisation: Unlike traditional banks, issuer-processors let fintechs customise card features, such as spend limits, merchant category controls, expiration logic, and Just-in-Time (JIT) funding, ensuring money only moves when it’s needed.
• Tokenization: Instant card provisioning to Apple Pay®, Google Pay™, and digital wallets without needing a plastic card.

🧠 A fundamental part of a card programme is the card itself. As well as issuing, printing, customising and tokenizing the card ready for use, IPs provide APIs for card lifecycle management, leverage partners to launch multi-currency cards, and guide innovators through the sometimes complex card options.

The Processing ⚡

Handles real-time transaction approvals and routing, critical for ensuring each card swipe gets an instant decision and reaches the right place without delay.

• Transaction Processing: Every time you tap, swipe, or enter a card online, an issuer-processor handles the real-time communication between the merchant, the payment network (Visa®/Mastercard®), and the issuing bank.
• Authorisation & Decisioning: When a user makes a purchase, the issuer-processor decides whether to approve or decline it based on real-time account balances, fraud detection, and business-specific rules.
• Settlement & Clearing: Ensures money actually moves from the cardholder’s funding source (bank account, digital wallet, employer balance) to the merchant.

🧠 Processing is where speed, security, and reliability meet. A great issuer-processor supports  real-time approvals, helps to prevent fraud, automates settlements, and enables a smooth user experience—all while keeping transaction flows efficient and scalable.

The Strategy 💡

Helps fintechs build unique card programs that can grow with them, giving them a way to stand out with custom features and expand smoothly as they gain users based on their overarching objective and strategy.

• Go-to-Market Advisory: Issuer-processors don’t just provide tech; they guide fintechs on product-market fit, helping them structure their card programs for success.
• Card Program Optimisation: Need a cashback program, spend-based rewards, or dynamic credit limits? Issuer-processors help companies design unique offerings that fit their target audience.
• Monetisation Strategy: Assists fintechs in maximising interchange, premium card tiers, and additional revenue streams.
• Embedded Finance Enablement: Facilitates non-fintech companies (e.g., retail, travel, marketplaces) in launching financial services seamlessly.

🧠 A card program isn’t just about transactions—it’s about how it fits into a business model. A strong issuer-processor helps fintechs (and non-fintechs) design, optimise, and scale their offerings to drive customer loyalty and profitability. Without a solid strategy, you don’t have an effective card programme.

The Design 🎨

Lets companies customise their card experience based on the overarching strategy and in line with their objectives and customer base. This matters because a tailored experience delights customers and reinforces the brand.

• Programmatic Control: Issuer-processors let businesses control card functions via API, determining where, when, and how a card can be used.
• Spend Management Tools: Some fintechs offer corporate cards with dynamic spending rules which wouldn’t be possible without issuer-processors.
• Decline Reasons & Messaging: Unlike traditional banks, issuer-processors let fintechs control the user experience when a card is declined, reducing friction for customers.
• Customer Journey (e.g. UX Toolkit): Some issuer-processors offer tools that help prototype and design user-friendly payment experiences before launch, speeding up the design of the customer facing app.
• Backend Workflows: Streamlines how transactions are categorised, approved, and processed.

🧠 Cardholder experience matters. A well-designed program gives users clear controls, intuitive interactions, and frictionless payments—all enabled by issuer-processors.

The Regulations 📜

Guides innovators through compliance and risk requirements and connects them with key providers, which is crucial because understanding and adhering to the rules keeps them out of trouble and earns customer trust.

• License Requirements: Depending on geography, fintechs may need licensing or regulatory approvals—issuer-processors help navigate these hurdles.
• Regulatory Adherence: Payments are heavily regulated (PCI-DSS, PSD2, AML, KYC). Issuer-processors help fintechs stay compliant with local and global regulations.
• BIN Sponsorship & Banking Partnerships: Many early innovators and retailers don’t have their own banking license, so they need an issuer-processor to connect them with a licensed sponsor bank to legally issue cards, and access to a BIN to route payments. Some IPs have their own direct access to e-money institutes and BINs.

🧠 Compliance isn’t optional—it’s essential. A good issuer-processor helps fintechs meet regulatory requirements efficiently, so they can focus on growth without unnecessary risks.

The Risk 🔐

Guards against fraud and unauthorised transactions, vital for keeping customers’ money safe and the company’s reputation intact.

• Real-Time Fraud Detection: AI-powered risk assessment tools can help spot and block suspicious transactions before they occur.
• Card Security Controls: Issuer-processors allow fintechs to set up transaction monitoring, geolocation restrictions, and card-freezing/unfreezing options via API.
• Chargeback Prevention: Some issuer-processors offer dispute management tools that help reduce the number of chargebacks by identifying risky transactions upfront.

🧠 Fraud is evolving, and so are the defences. Issuer-processors provide cutting-edge risk tools to protect businesses while maintaining a smooth customer experience.

The Reporting & Settlement Layer 📑

Ensures that transactions are properly accounted for, providing visibility into who owes what and when at the end of each day.

• Network Reporting: Issuer-processors report to Visa®, Mastercard®, and Amex® to track spending, chargebacks, and settlement flows.
• Settlement Reporting: At the end of each day, issuer-processors can help reconcile transactions, ensuring merchants receive funds and banks settle balances correctly.
• Compliance & Audit Logs: Some issuer-processors offer automated reporting tools that simplify regulatory audits and internal compliance tracking.

🧠 Payments don’t stop at the transaction—they need accurate tracking, settlement, and reporting. issuer-processors ensure fintechs can see where every dollar moves, reducing reconciliation headaches.

Modern issuer-processors don’t just provide an API that connects to a core banking platform and enables card issuing and payment processing capabilities. They have a deep understanding of what makes a successful card programme and help with all aspects of the card building process. 

From selecting the right card for your objective, tailoring the processing to customers behaviour and geography, helping select the right tools for fraud and risk management, integrating with existing providers or suggesting best of breed partners for core banking, KYC etc, navigating the complexities of regional regulatory requirements and even advising on the strategy and design of the programme and product itself. 

The good ones have robust API first strategies but the value of a great issuer-processor goes beyond the technology…

The Value of Issuer-Processors to Innovation 💍

Indulge me in an analogy very relevant to my current situation and one that many reading this have likely thought about. 👰‍♀️🤵‍♂️

It's what I'm calling "The Wedding Planning Fallacy".

You may think that planning a wedding is pretty straightforward. 

After all, you have the idea in your head of what you want, the ideal outcome, theme, the location etc.

And how hard is it really to get people in a room for a celebration?  

You can take it from me; it's tougher than you think.

It's only when you start to get into the weeds of planning that you realise the planning, preparation and execution of a wedding is far more complicated than you realised. 

Finding a venue, figuring out catering, booking the registry, meeting with a bunch of vendors for catering, photography, lighting, flowers, selecting the various vendors, coordinating the often disparate vendors, and understanding costs. Then there's the venue regs and restrictions, sending invites to guests, the contractuals with vendors and coordination on the day. 

That's where a wedding planner comes in. 

They have connections with suppliers and can point you to the best ones based on your specific requirements. Often have knowledge of lead times and ideal planning schedule, can help tailor the event based on budgets, guide you through contracts, and manage coordination on the day.

And on top of this, they actually have experience in planning, coordinating and executing multiple weddings, which means many learnings, the ability to spot pitfalls and more accurately understand what's feasible. Something that most engaged couples won't have much experience of.

You can see where I'm going with this 👀

Standing up a card programme has many parallels with planning a wedding. 

You can technically do everything yourself. 

Build a direct relationship with Visa and Mastercard, process payments yourself, manage settlement and clearing, handle all fraud and compliance including PCI-DSS, and become a licenced issuer. 

But that path is fraught with complexity and risk, which often leads to delays or not fulfilling the overall objective. 

Leveraging an issuer-processor, much like using a wedding planner, means you are not only tapping into their technical expertise and connections but also buying crucial experience and expertise you only get after doing it multiple times before.

That, in addition to the technical rails and ecosystem connections, is the value.

Now, Next, Later: The Future of Issuer-Processing 🔮

I've taken you through some of Marqeta's history and origins, the function of issuer-processors as a whole, and the value they provide above and beyond the tech.

Time for my speculative look into the future using a Now, Next, Later roadmap format, which allows for a sequential view of what's possible without a firm commitment to dates. 

• Now: What's shaping the industry today?
• Next: What's emerging in the near term (12-24 months)?
• Later: What's on the horizon that will fundamentally shift the landscape?

Here's where I think the industry is heading and why.

Now: Lowering the Barrier to Entry and expanding into innovation support 🎨

• 👉🏽 No-Code/Low-code UX Tools: The growth of embedded tools allows innovators to visualise the plethora of payments and card journeys and use that to design the product and drive the specific APIs and level of involvement required by the IPs. Why would you spend weeks building out screens in Figma if you can spin up a clickable bespoke prototype in minutes using a tool given to you by issuer-processors that can then be used to connect directly to APIs?
• 👉🏽 Feature Selection & Roadmapping: A structure or tool that allows innovators to pick from a selection of standard features and generate a roadmap which can then feed into a low/no-code UX tool to generate a prototype. A challenge I've seen first-hand is not knowing what is possible. Allowing builders to pick relevant features based on their customer discovery and build an appropriate roadmap is not too far away. 

💡 Why do I think this will happen?

Capturing other areas of the card proposition development, launch and maintenance lifecycle is a no-brainer. Giving innovators the tools to shape the early stages of a proposition is a huge draw and has the added benefit of giving the sales team a standardised understanding of the product and the APIs, third parties and regulations needed to bring it to life. 

Marqeta's UX Toolkit is one cool example of this, but I think many others will start to look at building an Ideation, Discovery and Design stack as an acquisition and customer funnelling mechanism. I can think of a dozen more cool ideas that'll help innovators and IPs alike and take innovators further down the funnel.

Next: Geographical and Use Case Expansion 🌏

• 👉🏽 Geographical Expansion: I think the next big geographical push for issuer-processors will be in MENA and Oceania, where fintech adoption is rising, and legacy banking rails still leave gaps in innovation. I've experienced first-hand the difficulty of building challenger banking products in both regions using only legacy infrastructure. It causes delays and stifles innovation, so API first, tried and tested issuing and processing infrastructure launching in these regions to supercharge innovation is a no-brainer.
• 👉🏽 Card Adjacent Fintechs and FS leveraging Cards: This is another area where there are already some shoots coming through. Let's take investing, for example. An investment platform that allows customers to invest in different assets and create a portfolio wants to own more of that payment experience. Instead of the customer transferring their returns into a bank account with a linked card, why not give them instant access to earnings, which also gives the platform the ability to see where customers transact and maybe give them bonus rewards for spending at a retailer, Apple for example, if they have $APPL in their portfolio. There are countless more use cases across SME finance, consumer finance, insurance, and personal finances where cards can be added to traditionally "card-less" experiences
• 👉🏽 Non-FS companies adding cards and payments: There are a whole host of reasons why retail brands, sports venues and other non-FS organisations are looking at adding cards as part of their customer experience. The obvious one is to create a system where the institute issuing the cards to customers used to pay for goods in stores is the same as the institute processing the payment AKA 'On Us' processing. This reduces processing costs and can have a positive impact on acceptance rates. There is also the ability to embed loyalty schemes and finance programs as part of the same digital product and to glean more insights on consumer spending. There are already some big sports brands dipping their toe into the space.

💡 Why do I think this will happen?

As embedded finance grows and consumers and SMEs lean towards direct relationships with retail platforms, it's inevitable that retailers will choose to issue cards for things like loyalty and spending. On the SME side, let's take Etsy as an example. Small businesses selling goods, who eventually take out a finance product embedded in the Etsy platform might use that finance for materials or marketing. But by delivering that finance via a revolving credit facility on an Etsy card, the platform can better understand where spending is taking place, reward merchants for early repayments, and increase spending limits if needed. Bespoke card programmes neatly complement Embedded finance products.

The Non-FS and geographical expansion suggestions explain themselves.

Later: Self-Service Issuer-Processing using Model Context Protocol…? 🤖

As with the 'later' section on many a roadmap, this is a tad speculative but interesting nonetheless. 

The premise is this. 

Imagine you've got the idea and plan for a card programme, and you could stand up prototype with 1 well-constructed prompt…

The Model Context Protocol (MCP) is an open standard developed by Anthropic that streamlines how AI models interact with external data sources and tools, acting as a standardised way for AI applications to access and use external information.

Think of MCP as a highly capable universal adapter that creates a standardised connection to your key data sources and allows for prompt-based queries and requests.   

Applied to issuer-processing, MCP could act as the orchestration layer between user intent, APIs, and real-time transaction systems, enabling a truly self-service, AI-driven payments infrastructure.

Right now, setting up a card program requires technical integration, business logic definition, and compliance handling.

With MCP, this process becomes prompt-driven and automated and can allow for the creation of a card program with a single well-constructed sentence.

Instead of working through API documentation and config files, a fintech team could simply describe what they need in natural language:

"I want to create a corporate expense card with dynamic spending limits, multi-currency support, and real-time fraud alerts."

👉🏽 MCP understands the intent and translates it into an AI-generated program blueprint.

👉🏽 Defines the required features:

👉🏽 Maps the request to API endpoints:

👉🏽 Auto-Generates API Code for Implementation

👉🏽 Hooks into all the required screens

👉🏽 Deploys it all to test flight along with the backend infrastructure

👉🏽 Allows the end user to start playing around with product almost immediately

In 5+ years, we could see an issuer-processing model where:

• 🧠 Any company (not just fintechs) can launch embedded financial products via AI
• 🧠 Payments and fraud rules adjust in real time based on AI insights
• 🧠 Fintech infrastructure is built dynamically with minimal human involvement

Like I said. Speculative, but grounded with logic.

💡 Why do I think this will happen?

Firstly, AI is everywhere now, and for most, it's just a matter of when.

Secondly, this option of a self-service approach solves a key challenge in the issuer-processing space. 

As the more established IPs grow, they tend to focus on larger enterprise clients with bigger customer bases and potential transaction volumes. This means the next big fintech unicorn may be overlooked because they are too early in their journey or the market isn't perceived to be big enough at the time. Or a growing FS company looking to add cards to the stack is overlooked as they aren't growing fast enough.

The self-service model allows IPs to continue to provide value-added services to enterprise customers with huge volumes whilst enabling the fledgling future unicorns to build via the self-service platform. 

No more fintech unicorn FOMO.

Context is key 🤓

The long-term future of fintech innovation will be innovators coming up with great ideas and leveraging providers like Marqeta and others to quickly bring these to life while they focus on the fundamentals of the business model, product, marketing, and growth.

Right now, that means leveraging an issuer-processor to help get  to market quicker, using connections to ensure robust card design, authorisation process, and operational resilience, and leveraging their strategic connections to key partners. 

In the future, it'll mean going to an issuer-processor to get a prototype built, have embedded fraud and compliance capabilities, as well as accessing early-stage ideation and discovery tools enabling innovators to build customers-centric products with no more than a few well-constructed prompts and an API licence key.

That's where I think we're heading. 

The companies best prepared for this future will need at least two things:

Payments Nerds across all verticals.

Check ✅

An API that has been proven across a range of use cases and evolved over time.

Check ✅

We talk about the art of the possible in fintech.

Well, self-service fintech innovation using MCP, proven APIs, good documentation, and industry experts is what's possible.

We're not there yet, though.

However, the issuer-processors that get there first—that enable fintech builders to launch faster, smarter, and with fewer barriers—will be the ones that define the next decade of financial innovation.

At the very least, I hope this deep dive has made it clearer how issuer-processors fit into the fintech build process today—and where they're heading next.

That's it from me. Hope you enjoyed this deep dive and guest write up 👋🏽

If you enjoyed this edition by hit the thumbs-up button below and reply to the email with feedback—more product deep dives will follow if you do, and maybe an edition exploring cool use cases for cards. In the meantime, connect with me on LinkedIn and check out more of my fintech musings here.

Jas.