Struggling US card issuing and payments processing platform provider Marqeta Inc has abruptly pulled the plug on its Australian business as it scrambles to tame operating losses across its global business.
Staff employed at the company’s Australian operation based in Melbourne were notified last week of plans to shut down the local business with “immediate effect”.
The decision took some observers by surprise given Marqeta has continued to forge strategic insourcing deals with local clients this year.
In March, the company issued a press release announcing that it would take on processing of prepaid cards for Sydney-based stablecoin wallet provider, Stables.
Since entering the Australian payments processing market in February 2020, Marqeta has forged card partnerships with a swathe of unprofitable local buy now pay later companies including Afterpay, Klarna and Zip.
While Marqeta’s local arm has been able to leverage its issuing and processing platform to build a presence in the booming prepaid debit card market, it is likely to have run up operating losses to support its top-line growth.
Investor support for Marqeta has collapsed since its Nasdaq-listed scrip peaked at above US$31 in October 2021.
Since then, the share price has plunged more than 80 per cent to under US$5.
In early May, new global chief executive Simon Khalaf announced plans to axe 150 staff from the international business. While that triggered concern that the Melbourne-based Asia Pacific division would be scaled down, local CEO Duncan Currie confirmed on LinkedIn yesterday that the regional arm had ceased operations altogether.
“Unfortunately, the Marqeta head office decided last week close the APAC business with immediate effect,” Currie wrote in a post on Linkedin.
“But their loss can be your gain, as some truly excellent people have now become available.”
Currie also apologised to local business clients for the decision.
“I'm sorry we weren't able to do a handover,” he wrote.
“I'm sure someone from MQ will be in touch.”
Marqeta’s sudden withdrawal could potentially disrupt the operations of local BNPL providers.
In September 2021, Zip’s former head of payments in Asia, Hamish Moline, said Marqeta had played an important role in enabling contactless card transactions through the Zip platform.
Afterpay said in May 2021 that it was using Marqeta to tokenise card transactions initiated by its customers.
Marqeta entered the Australian payments sector in 2020 when it began supporting Klarna’s transaction capability.
“We love working with Marqeta,” said Klarna’s chief technology officer Koen Köppen in March 2020.
“Their ability to work at speed, cut through complexity and always have the end consumer experience at heart perfectly matches how we work at Klarna.
“Our close collaboration in bringing an entirely new product offering and shopping experience to the Australian market in record time has been a big success.”
Marqeta’s global business has continued to rack up losses this year after reporting a 12-month net loss of US$184.8 million in 2022.
The group reported a net loss of US$163.9 million in 2021 and US$47.6 million in 2020.
Directors of Marqeta stated in the 2022 annual report that they expected the company would continue to incur losses “for the foreseeable future” as it expanded into new geographies and created new products for customers.