Payments fintech Marqeta announced today it will acquire credit card management platform Power Finance in an all-cash transaction to help supplement its credit offerings. 

The cloud-based solution is expected to accelerate the capabilities of Marqeta’s credit products including card issuing, digital wallets and transaction processing, according to a Marqeta release.

The Oakland, Calif.-based fintech (NASDAQ: MQ) agreed to pay $223 million for Power Finance over two years, and an additional $52 million if one undisclosed milestone is met. It is Marqeta’s first acquisition.  

“We already see considerable demand for differentiated credit products from companies looking to innovate …  who are held back by the constraints of legacy technology,” Simon Khalaf, incoming chief executive at Marqeta, said in the release. 

The acquisition announcement follows Marqeta’s launch of a beta program that allows credit and debit card issuers to enable users to securely make payments directly from their digital wallets via tokenization, eliminating the need for a third-party app.  

Tokenization technology

Marqeta, along with its beta user, Columbus, Ohio-based credit card service company Bread Financial, is using tokenization technology to alter credit card numbers for more secure digital wallet use, according to a Marqeta release.  

The technology eliminates the need for clients to download additional apps to access payment functions without disclosing their card information, Matt Sollie, vice president of product management at Marqeta, told Bank Automation News. Previously, card details would have to be scanned or typed in.  

“Now cardholders can click a button on a web page without having to download an application and have a card token pushed to their wallet,” he said. 

For example, airlines could use the technology to automate a transaction request for passengers to pay for food or supplies during delays or cancellations – without giving the merchant receiving payment access to the user’s credit card number, Khalaf said in the release. 

The web-based offering was developed through Marqeta’s APIs and JavaScript with integration to virtual wallet platforms Apple Pay and Google Pay in mind, Sollie said.  

The product has been in development since Q4 2021. The capabilities are expected to be fully launched this year. 

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