Payments

Bill.com partners with Marqeta, puts squeeze on Ramp

Card issuing platform Marqeta announced its latest partnership with cloud-based software provider Bill.com. The integration will see the two fintechs create virtual commercial card products for Bill.com’s financial institution (FI) customers – particularly SMBs.

Marqeta operates as a global card issuing platform that enables clients to build configurable payment experiences. By joining forces with Marqeta, Bill.com said it will be able to expand its card payment capabilities while meeting its goal of digitizing payments and simplifying accounts payable workflows.

“Bill.com is addressing a huge gap in the market helping small and midsize businesses access much needed payment innovation,” said Jason Gardner, Founder, and CEO of Marqeta. “Our mission at Marqeta is to provide technology solutions to empower innovators to change the world, which we see Bill.com embodying closely.”

The partnership arrives just one day after corporate charge card start-up Ramp revealed it is going after publicly-traded competitor Bill.com’s customer base with a free invoice management and payments platform. Eric Glyman, Ramp CEO, told CNBC that about 20% of Ramp customers use Bill.com services.

It may not sound like a grand portion, but Bill.com’s market capitalization has surged from less than $3 billion to about $30 billion in under two years. The company processed $41.7 billion in total payment volume for Bill.com customers in the fourth quarter of 2021 ending August 26 – an increase of 64 percent year-over-year.

In that same quarter, Bill.com was able to process 8.2 million transactions for customers – a healthy 46% boost according to a company release.

Ramp has skin in the game as well, having claimed that transaction volumes have jumped 50% in the two months since the company last raised funds at a $3.9 billion valuation.

Thanks to the early Wednesday news, Marqeta stock rocketed 13.3% in morning trading, and has gained 36.8% over the past three months as the S&P 500 has risen 4.0%, according to MarketWatch. Heightened stock aside, Marqeta has had a busy year, largely due to its public debut via IPO on the NASDAQ under the ticker symbol MQ at a $15 billion valuation in July. The company priced 45.5 million shares at $27, above its expected range of $20 to $24.

Marqeta, which launched in 2010, draws almost 70% of its revenue from payment processor Square, extracting that money from net interchange fees set by the card networks and paid by card holders, according to regulator filings.

However, its managed other partnerships as of late to keep the funds flowing. In September, it announced integrating with Zip (formerly Quadpay), a point-of-sales (PoS) credit and digital payment service provider to offer BNPL services in Australia. The announcement was kept under wraps for over a year from the public but was attributed as the reason for Marqeta’s 350% year-over-year increase in BNPL net revenue for the second quarter of 2020.

Even more recently, Marqeta revealed providing fintech Figure with technology that will let users of the Figure Pay product decide at cash registers whether to spend their own money or use buy now, pay later (BNPL) financing.

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