Marqeta Announces TransactPay Acquisition, CEO Transition

To say that Wednesday (Feb. 26) was a busy news evening for Marqeta would be an understatement.

After the markets closed, the card issuing platform named Mike Milotich as interim CEO, replacing Simon Khalaf, who has stepped down from that role. Milotich will continue to serve as CFO.

An Acquisition

And in addition, the company said it would acquire  TransactPay, a BIN Sponsorship provider licensed as an E-Money Institution (EMI) in the U.K. and European Economic Area. The deal, Marqeta said in the announcement, will strengthen its card program management capabilities in the U.K. and Europe. EMIs are required in order to, among other things, issue prepaid and virtual cards in those regions.

The company also reported its fourth quarter results, where total processing volume (TPV) was $80 billion for the quarter, up 29% year over year. Revenues gained 14% on a net basis, to $136 million.

Shares were up 11% in after-hours trading.

During the conference call with analysts, Milotich said the company is “making progress in adding additional banks while also streamlining our operations and program onboarding with existing bank partners” with “approved frameworks that align with bank standards and compliance guidelines.”

And with discussion of previously disclosed program delays, he said that there were three that remain “pending launch — a result of customer decisions rather than capacity constraints on our part or from our bank partners.”

Milotich said the company’s European business continues to gain momentum, where Q4 TPV was up by more than 100% year over year.

American Express Announcement

Milotich also announced that the American Express network would be “a new option for credit and debit card programs” in joint efforts that would begin later this year.

“Offering American Express will further widen the choices on our platform to differentiate and provide even more options to FinTech and embedded finance partners and prospects. We have signed an agreement … leveraging the American Express Agile Partnership platform, which enables FinTechs and other partners to launch cards on the American Express network,” Milotich said.

With a nod to the TransactPay announcement, the interim CEO said that “previously, we partnered with TransactPay to meet licensing needs. However, customer feedback consistently highlight the desire to avoid the complexity associated with contracting multiple partners. Rather than building our licensing infrastructure, which would take several years — given the substantial European opportunity we see in our pipeline — we decided to acquire TransactPay to integrate our offering.” The close and required regulatory approvals could take six months, he said.

In detailing particular areas of promise, he pointed to the continuing growth of buy now, pay later (BNPL), and noted that the company had been the first processor to work with Visa’s flexible credentials in the United States, adding that Marqeta is also partnering with Mastercard on its own flexible credential.

Full year 2025 net revenue growth is expected to be between 16% to 18%, according to his commentary on the call.

New Opportunities

During the question-and-answer session with analysts, when asked about the TransactPay deal, Milotich said, “The ability to have one solution is what we are after. … To build that capability and then show the regulators that you are ready to do it is quite time consuming. Our estimate is it would take several years for that. And we really did not want to wait given the amount of activity we see in Europe and the momentum we have in that business.”

Later, pointing to embedded finance opportunities, he said that “the embedded finance companies … want packages through APIs, so that solutions are easy to integrate, into their existing business. They’re also looking for a full solution provider. Many of them are interested in both credit and debit, as well as maybe some BNPL.”

And, he added, “They also want full program management because they want to be a step removed from the complexity of all the regulatory requirements of cards. … Embedded finance is gaining momentum.”

In additional remarks on the call tied to the American Express announcement, he said, “Amex is really known for their capabilities and credit, particularly B2B lending and loyalty cards.”

He told analysts, “The experience and expertise that they have in credit — combined with our modern capabilities — will be very additive to us, where we can go sell customers together. Amex wants to continually expand their debit business — that’s something that’s much smaller for them. But that’s an area where we have a lot of expertise … and that’s an area where we can really help them to grow that opportunity.”