Simon Khalaf, CEO of Marqeta, discusses his journey from Yahoo! to leading payment innovation. Learn how his past shaped Marqeta’s future, the challenges faced and insights on FinTech’s evolution, from personalised cards to embedded finance and AI. An exclusive interview revealing industry insights and entrepreneurial advice.
Could you share some highlights from your career journey, particularly how your experiences at Yahoo have influenced your approach as CEO of Marqeta?
Payment card companies have traditionally treated individual cardholders, similarly, offering the same rewards and experiences. Card providers can take over a year to launch a new card, requiring brands to stitch together multiple vendors to create new card programmes. They also provide the same rewards and incentives, with very little room for customisation.
When I was at Yahoo! I worked on the personalisation of the company’s homepage, which became the front page of the internet for hundreds of millions of consumers all around the world. It was the equivalent of printing millions of newspapers each day, customised to every reader. What excites me about Marqeta is that I think we can do this with payment cards.
The opportunity now is for brands to create beautifully designed, embedded and customised cards that help them engage with customers in entirely new ways. Through our platform, we can help brands reimagine how they earn customer trust and loyalty, build payment experiences directly into their brand experience and offer rewards and benefits customised to each person.
What are some significant challenges you’ve faced in your career, and what key lessons have you learned from overcoming them?
Throughout my career, I’ve been fortunate to work for various high-profile CEOs, including Eric Schmidt at Google, and former Yahoo! CEO, Marissa Mayer. I’ve witnessed hypergrowth on multiple occasions, but I’ve also learned the hard way that companies make mistakes, something I call the ‘oops moment’, which is when they become bigger without becoming better.
Although I would consider myself an enthusiastic, out-of-the-box thinker, I’ve learned the importance of being data-driven and product-focused and surrounding myself with really strong operators. We are at a key inflexion point of growth and scale at Marqeta, and now it’s about focus and execution.
What initially drew you to the FinTech industry, and what aspects of it continue to fuel your passion for innovation?
Payment cards are the most adopted technical product with more distribution than water, wheat, Google and Facebook combined. But, for most people, they are still just pieces of plastic. When you think of cards as a digital product, they become a gateway to the digital experience.
If you look at the financial experience, it’s a bit like news publishing 30 years ago which had a 24-hour latency from when the news was happening to the moment your newspaper arrived the following morning. I was drawn to the FinTech industry because of the potential embedded finance has to create opportunities for the traditional payment card to become the front page of a brand’s mobile experience.
People discover things that are marketed to them in their social networks, through a Google search, or an app they have on their phone, and that’s the homepage. But if people start thinking that a payment experience, which can be tapping, swiping or digitally doing something, is the homepage of your brand, that’s when FinTech innovation is going to become even bigger, allowing nearly any brand to embed financial experiences into their solutions.
Marqeta has been instrumental in driving payment innovation through its open API platform. Can you discuss some key initiatives Marqeta has undertaken to support its partners like Klarna, Lydia and Raiffeisen Digital Bank?
Marqeta’s partnership with Klarna is a great example of what our open API card issuing platform can support. Klarna uses our platform to issue the Klarna Card, enabling customers in the US to pay anywhere using Klarna’s ‘Pay in 4’ solution. This means they can instantly onboard accounts, issue physical and virtual cards, and push to digital wallets so users can spend immediately upon credit approval.
With Lydia, a French peer-to-peer payments app, we support their ability to quickly issue millions of virtual cards to users via digital wallets. We work with Raiffeisen Centrobank to enable their customers in Poland and Romania to leverage a modern, comprehensive banking experience with streamlined digital accounts and debit cards.
With your extensive experience, what trends or developments do you find most exciting or disruptive in the FinTech industry currently?
I’m excited about the trend towards Accelerated Wage Access (AWA), which enables people to get paid as soon as they’ve worked, instead of waiting until the next pay or invoicing period. AWA currently accounts for about 3% of our processing volume, which is about US$7 billion of pay that is running through Marqeta’s channels. I think this number is likely to grow, as shifts continue to take place which impact the very nature of work. For example, rising inflation, demand for gig work increasing and changes in how people access credit.
How do you envision the future of FinTech evolving, particularly concerning embedded finance, AI and personalisation?
Embedded finance is going to continue to dominate FinTech, and almost every other industry. We are seeing massive consumer demand for embedded mobile apps, co-branded credit cards and integrated BNPL solutions from non-traditional providers. As this continues, brands will increasingly see the need to embed their own branded financial experiences into their offerings.
Gen AI will continue to gain traction in the coming months and years. Take a look at credit, which is traditionally assigned based on an individual’s profile including credit score, postcode and so on. Gen AI’s ability to quickly crunch large volumes of data enables underwriting decisions to evolve, moving away from being about a particular person to being about a transaction. As a result, lenders can decide on whether to provide point-of-sale credit underwriting (similar to JIT funding) in real-time so that consumers can access these services at the point of sale.
Lastly, what advice would you give to aspiring entrepreneurs looking to make an impact in the FinTech space, based on your journey and observations?
Grab every opportunity you have and use it as a learning experience.