Marqeta's Strategic Pivots and Revenue Diversification in a Shifting Payments Landscape

In the ever-evolving fintech landscape, Marqeta has emerged as a case study in resilience and reinvention. Once tethered to a single client—the Cash App, which accounted for 75% of its revenue in 2022—the company has executed a strategic pivot to diversify its offerings and reduce dependency on a volatile revenue stream. As of June 30, 2025, Cash App now represents just 45% of Marqeta's total revenue, a transformation driven by aggressive expansion into buy now, pay later (BNPL), embedded finance, and global marketsMarqeta Sees BNPL and Embedded Finance Boosting Demand^[3]. This shift not only mitigates risk but also positions Marqeta to capitalize on emerging trends in financial technology, with implications for long-term growth and margin expansion.

The Decline of Dependency, The Rise of Diversification

Marqeta's journey from a Cash App-centric model to a multi-vertical platform reflects a calculated response to market dynamics. The company's second-quarter 2025 results underscore this evolution: net revenues rose 20% year-on-year to $150 million, while total processing volumes surged 29% to $91 billionMarqeta Sees BNPL and Embedded Finance Boosting Demand^[3]. These figures are not merely a function of scale but a testament to Marqeta's ability to innovate. By integrating BNPL services—such as the Affirm Card and Klarna Card—into its platform, Marqeta has tapped into a high-growth segment. The company's use of Visa's Flexible Credentials to embed BNPL features directly into debit cards further illustrates its commitment to staying ahead of consumer demandMarqeta Sees BNPL and Embedded Finance Boosting Demand^[3].

Europe, in particular, has become a growth engine. Buy now, pay later services, banking, and expense management use cases in the region are expanding at over 100% year-on-year, driven by regulatory tailwinds and shifting consumer behaviorMarqeta Sees BNPL and Embedded Finance Boosting Demand^[3]. Marqeta's acquisition of TransactPay in 2025 has amplified its capabilities in the UK and Europe, enhancing program management and accelerating its global footprintMarqeta Sees BNPL and Embedded Finance Boosting Demand^[3].

Leadership and Operational Discipline

The appointment of Mike Milotich as permanent CEO in February 2025 marked a pivotal moment. A veteran of Visa, PayPal, and American Express, Milotich has prioritized operational efficiency and financial discipline. Under his leadership, Marqeta has streamlined migration processes for card programs, exemplified by its successful collaboration with Klarna to transition its European card operationsMarqeta Sees BNPL and Embedded Finance Boosting Demand^[3]. This operational agility not only strengthens client relationships but also reduces the cost of onboarding, a critical factor in maintaining healthy margins.

While specific gross and operating margin figures for 2023–2025 remain undisclosed, the company's focus on high-margin services—such as embedded finance and BNPL—suggests a path toward margin expansion. Unlike traditional card issuing, which often operates on razor-thin margins, embedded finance solutions (e.g., demand deposit accounts, early payroll access) offer recurring revenue streams and higher profitabilityMarqeta, Inc. (MQ) Stock Price, News, Quote & History - Yahoo Finance^[2]. Marqeta's white-label app development and partnerships with FinTechs further diversify its value proposition, reducing exposure to any single market or client.

Competitive Positioning and Long-Term Outlook

Marqeta's open API platform distinguishes it from peers like Adyen and Stripe. By enabling businesses to launch customized payment solutions in under six monthsMarqeta | Modern Card Issuing & Payment Solutions^[1], Marqeta has positioned itself as a “platform for platforms,” fostering innovation among FinTechs and enterprises alike. This approach mirrors Stripe's ecosystem strategy but with a sharper focus on card issuing and embedded finance.

However, challenges persist. The BNPL sector, while lucrative, faces regulatory scrutiny and credit risk. Marqeta's ability to navigate these hurdles will determine whether its diversification efforts translate into sustainable margins. Additionally, competition in embedded finance is intensifying, with incumbents and startups vying for market share.

Conclusion

Marqeta's strategic pivots—from Cash App dependency to a multi-vertical platform—demonstrate a company in transition. By leveraging its technological agility, global reach, and leadership expertise, it has laid the groundwork for long-term growth. While margin trends remain opaque, the shift toward higher-margin embedded finance and BNPL services, coupled with a diversified client base, suggests a more resilient business model. For investors, the key question is whether Marqeta can sustain its innovation pace in a sector where disruption is the norm. If history is any guide, the company's ability to adapt may yet prove its most valuable asset.