Fintech Insider Podcast by 11:FS
00:43:12 · Randy Fernando, Benjamin Ensor
[00:43:12] S7: Earlier this week, we announced the launch of Marketa's new credit platform. And why we're so excited about that announcement is because it's been really the work of many members of the Marketa team over the last nine plus months. Back in February, my company, Power Finance, was acquired by Marketa. And today, with this announcement, we're able to deliver a few key components that we think are really going to change the game for folks looking to issue their own white labeled embedded credit card experience. Number one, the new credit platform is an end to end credit issues platform. Meaning, we provide issuing, processing, as well as full program management capabilities. Number two, we have a robust loyalty and rewards engine powering points, statement credit, and cashback. Lastly, powered by our low code UI templates, these experiences are completely embedded within the brand's digital properties. Meaning, our clients are able to embed every aspect from the application flow to card management directly within their existing digital apps. Really excited about the future and to see how creative our customers will get as they reimagine what it means to issue their own credit cards. [00:44:36] S0: So, Pranav, I might throw this one to you. Who is this who's this interesting for, do you think? I mean, who are the who are the brands who might want to issue credit cards? What sorts of companies might be interested in something like this?
00:44:36 · Benjamin Ensor, Pranav Sood
[00:44:36] S0: So, Pranav, I might throw this one to you. Who is this who's this interesting for, do you think? I mean, who are the who are the brands who might want to issue credit cards? What sorts of companies might be interested in something like this? [00:44:51] S3: I mean, look, the the growth of embedded finance has been not particularly discriminatory in terms of which which which platforms or or or verticals it targets. I don't know. We we were talking about this earlier, but we actually just released a new report this week talking about just how much untapped the demand there is for platforms to offer embedded finance solutions. So I see a huge opportunity for SaaS platforms to do this when you think about embedded, you know, wallets and and the kinds of things that they want to offer, their their users. I see opportunities potentially for, you know, retail businesses to do it. As as as Marquetta talks about, they've they've come up with quite a smart link with rewards as well that will be able to integrate into a single offering. And generally, I think there's there's a lot of opportunity to to do, embedded, credit products around the world. So I I don't know if I have a smart answer about one particular customer. I just think that it's symptomatic of the larger trend towards embedded finance across the software and kind of adjacent industries.
00:44:51 · Pranav Sood, Benjamin Ensor
[00:44:51] S3: I mean, look, the the growth of embedded finance has been not particularly discriminatory in terms of which which which platforms or or or verticals it targets. I don't know. We we were talking about this earlier, but we actually just released a new report this week talking about just how much untapped the demand there is for platforms to offer embedded finance solutions. So I see a huge opportunity for SaaS platforms to do this when you think about embedded, you know, wallets and and the kinds of things that they want to offer, their their users. I see opportunities potentially for, you know, retail businesses to do it. As as as Marquetta talks about, they've they've come up with quite a smart link with rewards as well that will be able to integrate into a single offering. And generally, I think there's there's a lot of opportunity to to do, embedded, credit products around the world. So I I don't know if I have a smart answer about one particular customer. I just think that it's symptomatic of the larger trend towards embedded finance across the software and kind of adjacent industries. [00:45:54] S0: Yeah, no, I definitely agree. Kate, if Marques' vision comes to fruition, every single company all of us deal with will be offering us a credit card. Is that a good thing for customers? I mean, what are the risks here involved in particularly credit card, particularly offering sort of credit cards to customers?
00:46:13 · Kate Moody
[00:46:13] S2: Yeah, I can't say that a future where we're just inundated with credit cards fills me with hope and joy and warm fuzzy feelings. I mean, I think it's, I'm interested to know which markets they want to push this in first, because I think credit cards is definitely one of the products where we see the most variation in terms of like basic kind of financial products. You see huge variation in customer engagement with an appetite for credit cards. You know, a good friend of mine who's just moved back to The UK recently after working on a FinTech kind of proposition in The US, which is quite anchored around a credit card offering, kind of messaged me saying, you know, Oh crap, nobody in The UK really wants credit cards. So, you know, think it's, it'll be interesting to see which markets they focus on first. And, you know, we know that there is a real benefit for customers in sort of compartmentalising spend to some degree. And we see people doing that through using, you know, particular cards for particular mental categories of spend or kind of finding it useful to split. But having a credit card for every single category of spend, I think, would be massively overwhelming unless we've moved to a future where you've got the likes of Curve or people like that, that are kind of consolidating all of these cards into one place. So, yeah, I'm intrigued, but a little bit sort of perplexed, I suppose, about how they see this playing out in the long term, kind of what their big vision is. Yeah.
00:47:38 · Pranav Sood
[00:47:38] S3: I think they're still quite early on the journey of rolling this product out. From what I've heard, the number of customers using it is still relatively small. The one thing I would say, Kate, to your point is that we have to believe that there are platforms out there who understand the needs of their customers better than traditional banks do. And so if you can find a way to use the data that you have on transactional behavior or usage to offer contextual credit, to offer things that are relevant, to offer things that are, you know, hopefully also very price competitive, then you've gotta hope that that's a that's a good thing and and hopefully a better one than than sticking with the status quo.
00:48:14 · Jeremy Balkin
[00:48:14] S4: You know, if I if I maybe can drop a proverbial bull in a China shot moment here, I think I think the bigger picture to this is sort of a point I made much earlier on about the sort of the proverbial proverbial battle over the last decade between the merchants and the issuers and the merchants are winning. And this is proof of that. If you're a merchant now, who's essentially outsourced their checkout of the last decade to buy now pay later companies, digital wallets, you know, you've basically given free access to your most valuable real estate, which is your online checkout to all these third parties. Merchants are like, we don't need to do that anymore. We can just issue our own credit. And it's another threat to co brand credit cards because a merchant doesn't necessarily need to go through historically a co brand credit card. It's like three parties. You have the network, the merchant and the issuer. One could argue that that's also can be disintermediated by the merchant essentially offering, it's not the card itself, the card's irrelevant, it's the access to the credit. It's just the format of the credit, It's the access, not the ownership. So you could easily see merchants creating their own sort of paying for BNPL installment type point of sale solution for their customers, whether they're premium customers or every customer. I think this could be hugely, hugely transformative, makes a ton of sense. And now like anything it's gonna be about proof is in the pudding and adoption. And I think in The US, I could see this thing taken off in a material way quickly.