Vistra's Global Banking Launch & Marqeta's Strategic Acquisition

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Hi embedded finance friend

“After the match is before the match” is a famous quote by German football coach legend Sepp Herberger, and it describes my current event activities pretty well. Just three weeks ago, we hosted our fifth event in Frankfurt, and today, I am announcing two more events: a public event in Berlin and our very first private dinner in London.

Berlin

On April 9th, we will host our sixth Embedded Finance Review event in Berlin (Register here). Sponsored by 13 Books Capital, Swan, and Visa, it will take place on the first evening of the FIBE (Fintech Berlin Conference). More details will be announced over the following weeks, but this will likely be our biggest event.

London

I am excited to co-host an exclusive, invite-only evening with Marqeta on April 3rd in London (Holborn). In the intimate setting of a private dining room, we’ll bring together a select group of industry leaders for great food, networking, and a thought-provoking discussion on the future of embedded smarter payments for payouts. We have limited availability remaining, but please reply to this email if you are interested in attending.

And now let’s dive in 👇

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Business services provider Vistra launches global banking offering

What happened: Business services provider Vistra, founded in 1986 in Hong Kong, has launched a business account offering in partnership with Airwallex (PYMNTS). The company has over 9,000 employees and is split into an energy division (Vistra Corp., headquartered in the US) and a business service provider division that manages over 200,000 global legal entities for its clients.  

Core product: Vistra’s business service business helps its clients with corporate services (e.g., incorporation, entity formation, and entity management), tax services, global employment solutions, and private wealth services.

Financial product: Thanks to the partnership with Airwallex, Vistra can offer its clients a banking product that enables them to “transfer funds between their entities, pay employees or suppliers.” Previously, clients had to manage Vistra’s services and financial accounts separately, but with the integration, they can manage their tasks faster, more efficiently, and without switching tools. 

The partnership: Australian Airwallex is mainly known for its financial products for global businesses, which enable them to open payment accounts, manage expenses, and, most importantly, conduct foreign exchanges. The company seems to focus more on partnerships and enabling brands like Vistra to embed financial products. A US- or Europe-only banking-as-a-service provider would not have been a good fit since Vistra needs a partner to offer financial products in multiple geographies.

Holiday rental platform Travelnest optimises flow of funds for property owners

What happened: Travelnest targets European property owners and has just launched a payment product in partnership with MangoPay (Finextra).

Core product: Travelnest lets property owners list their rental units on platforms like Airbnb, Booking.com, etc. The property owner can create and manage all properties directly on Travelnest without visiting the different travel platforms.

Financial product: According to the announcement, Travelnest can optimise the flow of funds with the new Mangopay integration and offer multi-currency services. While it is not 100% clear, I assume that after a property owner is onboarded onto Mangopay, they will receive a new IBAN. This IBAN will then be added to the various booking platforms. All payouts from these booking platforms will go into the MangoPay wallet before being transferred in one sum to the rental owner’s bank account. This is likely improving the customer experience for the rental owner, but it also puts Travelnest into the money flow, creating short-term benefits (e.g., increased product usage; higher stickiness) and new long-term product opportunities.

Marqeta acquires TransactPay - why is this a big step?

What happened: The US issuer processor Marqeta has announced the acquisition of e-money institution TransactPay to bolster its European offering. (The Paypers). Marqeta is the payment provider behind companies like DoorDash, Square, and Uber, and it helps these companies create modern card programs.

My comment: The acquisition is interesting because this is a change from Marqeta’s typical approach. While Marqeta positions itself as a modern card platform, it is essential to highlight that Marqeta is the “processor” and not the “card issuer”. If you visit the card program websites mentioned above, you will find the names of different banks in the footprint, for example, DoorDash lists Stride Bank as the card issuer. This means partnering with Marqeta alone is insufficient, but every customer must also source a card issuer. When Marqeta expanded to Europe many years ago, they copied the model but due to the European licensing situations, their clients typically did not select a bank as card issuer but an e-money institution.

With the acquisition of TransactPay, Marqeta can now offer all the core services necessary for a card-issuing product in the EU and UK. I assume that previously, Marqeta had a list of European card issuers (or BIN sponsors) that it shared with interested parties to help them find the required provider. TransactPay is the partner of choice for many European card programs, and many clients have probably already used TransactPay and Marqeta.

It will be interesting to see whether Marqeta will still work with other European BIN sponsors or only clients that use them for payment processing and card issuing. I expect that there won’t be any short-term changes and that Marqeta will likely still onboard clients with competing BIN sponsors. That being said, Marqeta will likely aim to make the combined offering so attractive and better that more clients will voluntarily opt for it.