What happened: The US issuer processor Marqeta has announced the acquisition of e-money institution TransactPay to bolster its European offering. (The Paypers). Marqeta is the payment provider behind companies like DoorDash, Square, and Uber, and it helps these companies create modern card programs.
My comment: The acquisition is interesting because this is a change from Marqeta’s typical approach. While Marqeta positions itself as a modern card platform, it is essential to highlight that Marqeta is the “processor” and not the “card issuer”. If you visit the card program websites mentioned above, you will find the names of different banks in the footprint, for example, DoorDash lists Stride Bank as the card issuer. This means partnering with Marqeta alone is insufficient, but every customer must also source a card issuer. When Marqeta expanded to Europe many years ago, they copied the model but due to the European licensing situations, their clients typically did not select a bank as card issuer but an e-money institution.
With the acquisition of TransactPay, Marqeta can now offer all the core services necessary for a card-issuing product in the EU and UK. I assume that previously, Marqeta had a list of European card issuers (or BIN sponsors) that it shared with interested parties to help them find the required provider. TransactPay is the partner of choice for many European card programs, and many clients have probably already used TransactPay and Marqeta.
It will be interesting to see whether Marqeta will still work with other European BIN sponsors or only clients that use them for payment processing and card issuing. I expect that there won’t be any short-term changes and that Marqeta will likely still onboard clients with competing BIN sponsors. That being said, Marqeta will likely aim to make the combined offering so attractive and better that more clients will voluntarily opt for it.
