In this clip from "3-Minute Stock Updates" on Motley Fool Live, recorded on July 29, Motley Fool contributors Ryan Henderson and Toby Bordelon take a look at card issuer Marqeta (MQ 1.16%) and discuss what separates it from other companies in the payment solutions space.
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10 stocks we like better than Marqeta, Inc.
They just revealed what they believe are the ten best stocks for investors to buy right now... and Marqeta, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of July 27, 2022
Ryan Henderson: Like it says, very scalable. You build it once and then it's the building blocks for everyone else. There's a very little incremental cost to having another customer come in and pick it up. I like the model. I think it translates well to a bunch of different industries.
Toby Bordelon: There are still many out there though. So many payment things. So many payment systems. What's their edge here versus others that isn't like everyone wants to do this type of thing.
Henderson: Yeah, it's in a niche position. Just to be clear, they build application programming interfaces, APIs -- I believe that's what it stands for -- the other companies can implement for card issuance. The other issue is that people always think they have like a printer in their basement where they're just printing cards and that's really not what it is. There's a lot of programming that goes beyond, let's say it's a mobile card, either like a digital card, not necessarily physical. There's a lot of programming that's in the back end designed to process payments. They can give companies really easy functions that they can apply.
Let's say you run like DoorDash, for example all their DoorDash drivers. DoorDash will say, all right, they can use our card to purchase the goods once they get to the restaurant but it has to be the exact amount that item was purchased for, has to be the exact item. It's able to program and customize all those solutions. It really leans well to these new fintech providers and it's easy to implement. You just plug that API into your code base. It's free to use, cost to scale because you pay for it every time you use it.
It's hard to get rid of. The only company I've ever seen get rid of something like this was Uber with Twilio. Once it's a part of your code base and you've really scale the business, it can be a pain to go in there and switch everything and build the product in-house, especially when it's only taking, let's say, 1% of your revenue. It's probably not worth it, the return on spend probably isn't worth it there. I don't know if there's that many competitors. I know Adyen has provided a small competitor, but the big fintech players are opting to choose Marqeta instead.