Marqeta Processing Volumes Surge 33%; Earned Wage Access Beckons

Marqeta’s latest results and commentary showed momentum in the company’s transaction processing operations — and opportunity in nascent markets such as earned wage access.

CEO Simon Khalaf said the company’s efforts and value for its corporate clients span the “spectrum of integrated payment options” across debit, installment payments and a personalized experience for their own end customers.

He noted that during a single day during the quarter, the company processed more than $1 billion on total payment volume (TPV), which he termed “a significant milestone.”

In terms of headline numbers, net revenues of $118 million were 46% lower year over year, with a decrease of 58 percentage points tied to a revenue presentation change with the Cash App contract minimum.

Shares were up 6% in after-hours trading Tuesday.

He noted a trend: Several previous customers — namely, FinTechs, Khalaf said — chose to take program management in-house “only to reverse course later,” due to complexity and the regulator requirements associated with scaling operations.

Targeting Operational Burdens

“Now, many customers look to Marqeta to ease a significant amount operational burden,” said the CEO. He said that during the first quarter, 20 of Marqeta’s existing customers added program management products and/or optional services from Marqeta’s programs, including disputes, compliance reporting, and 3DS.

“Going forward, we believe compliance-related services in particular will be a key selling point and differentiator for our platform,” Khalaf said.

He said that there are new opportunities in new markets such as earned wage access, a $2 billion market.

“While we’ve seen tremendous growth from early large adopters like Uber and Walmart’s One Finance, we’re approaching other channels to bring our solution to a broader market,” said Khalaf.

Asked later on the call about the segment, Khalaf said that “our unit economics for [earned wage access] I would say, are very similar to our neo-banking economics that we would have for other customers. Those use cases are sort of tied together in many ways. And so our economics end up being quite similar.”

CFO Mike Milotich said on the call that TPV grew 33% with “broad-based outperformance, particularly in BNPL, on-demand delivery and financial services.”  Non-Block TPV grew about 15 points faster than Block growth, he said.

“On-demand delivery growth remained in the double digits, accelerating quarter over quarter as our customers expanded into new merchant categories and geographies,” Milotich said.

During the question-and-answer session with analysts, CEO Khalaf said that the company “pipeline is growing strongly, in both FinTech as well as embedded” solutions.

Said Khalaf later in the call, “we’re seeing FinTechs … no longer focused on a single use case. Their focus is on a consumer or a business and offering all their financial services to them.”