According to Marqeta Chief Revenue Officer Todd Pollak, the future of payments is being built by ecosystems in which merchants and consumers drive change and flexible credentials are firmly in the mix.
As card usage rises and cash fades, several intermediaries, like delivery platforms, marketplaces and on-demand providers, now sit between merchants and consumers, adding complexity and cost, Pollak told PYMNTS in an interview.
“You’re seeing pressure from the merchant side to come up with creative and unique ways to reduce some of that pressure while they continue to provide service to consumers,” he said.
What merchants don’t want “is to limit the choice that consumers have in how they want to shop,” he said.
In the meantime, digital wallets are no longer just digital copies of cards; they are becoming “a gateway into choice,” Pollak said. Consumers can select from debit, credit, or buy now, pay later within the same credential, often without leaving the checkout flow.
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He said that “with a flexible credential, I can have BNPL embedded into a debit card and at any point of sale transact and break things into installments. That is revolutionary for the consumer.”
Flexible Credentials Redefine Issuer Strategy
The implications for issuers are significant, Pollak said. Traditional debit products risk becoming outdated as consumers expect more optionality.
“If I had a debit program, I don’t know why I would ever want a standard debit program anymore,” he said.
Embedding BNPL or other financing directly into a debit or prepaid card makes an issuer’s offering “infinitely more interesting” and expands distribution for lending partners, he said. The result is a new competitive dynamic in which flexibility itself becomes the differentiator.
Use Cases Extend From Consumers to Corporations
The same architecture that powers flexible consumer credentials can serve commercial payments. Expense management is an example.
“People are using their cards for personal and for business uses, and at the end of the month, you have to reconcile” that spending, Pollak said.
Flexible credentials can separate those transactions automatically—debit for wages, credit for reimbursable expenses—while ensuring the corporation, not the employee, earns rewards.
“There’s lots of ways this could play out, and it depends how creative people get,” he said.
Marqeta’s Role in Enabling the Shift
Marqeta’s infrastructure has been central to bringing these capabilities to market.
“We have longstanding partnerships with the BNPL providers,” Pollak said.
Companies like Affirm and Klarna “are the architects” of flexible credential innovation, and Marqeta has worked to help distribute BNPL to more merchants without point-of-sale integrations, he said.
Flexible credentials create a win-win across the ecosystem, Pollak said.
Networks benefit too, since “it’s another tool to offer out in the market for people to get creative and offer new solutions, which of course grows the number of transactions,” he said.
And consumers gain expanded choice and access all within the digital wallets they already use.
Beyond BNPL: The Next Wave of Embedded Finance
Pollak said he sees flexible credentials as the foundation for broader embedded finance.
“The benefit of embedded finance is not so much in the payment credential; it’s in reducing the friction associated with reconciling a payment into a ledger of record,” he said.
When payment and accounting functions are integrated into a single platform, “you exponentially improve the user experience,” he said.
Pollak said he expects rapid expansion.
“There are more BNPL providers that will want to follow suit,” he said.
When incumbents move to match FinTech innovations, “that usually signifies a major tipping point,” he said.
As networks roll out capabilities for revolving credit, issuers will be able to maximize interchange and profitability while passing along rewards and eliminating traditional fees.
Flexible credentials are “still in the early innings,” he said, but they are already changing how payments, loyalty and credit converge.
