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Fintech Marqeta expands into credit card space days after filing for an IPO

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Marqeta is expanding into the consumer credit card space to help other brands launch credit card programs. 

The move comes just days after the payment card issuing company reportedly filed confidentially for an initial public offering, making it the latest fintech to make a move to the public markets.

The value of the IPO is expected to be around $10 billion, according to Reuters. Marqeta — which is working with Goldman Sachs and JPMorgan Chase on the offering — is reportedly hoping to complete the IPO by April.

Oakland, California-based Marqeta raised $150 million last May at a $4.2 billion valuation, TechCrunch previously reported. Then in October, Mastercard put an undisclosed amount of money in Marqeta.

The company, which provides the tools for financial services platforms of all stripes to provide cards, wallets and other payment mechanisms, counts Cash App, Affirm, DoorDash, and Instacart among its customers. At the end of 2020, Marqeta says it had issued 270 million cards through its platform, up from 140 million at the end of 2019. The company, which has over 550 employees, is live in 35 countries.

Now, Marqeta is partnering with another startup, Deserve, on its new credit card initiative.

As Deserve CEO Kalpesh Kapadia explains it, his company’s technology and open API platform will power Marqeta’s program management services, including origination, underwriting, bank and bureau Integration, customer service, compliance and risk management. 

Marqeta founder and CEO Jason Gardner described Marqeta’s expansion into building new credit products as a “major milestone” for the company in building out a “truly comprehensive card issuing platform, able to support any card type.”

“This technology is complex, and we saw that this barrier to market had created an opportunity for us to take what we’ve learned helping customers innovate in the prepaid and debit space and adapt that to credit,” he told TechCrunch.

Marqeta is banking on the notion that any business currently issuing a card is looking, or currently working, on a credit card.

“These innovators want to launch modern card products but having to rely on legacy technology, which allows much less options for flexibility and personalization, has slowed down innovation,” Gardner added.

It’s also betting that consumers want more from credit cards than just paying for a purchase.

Image Credits: Marqeta

“They want seamless digital experiences, rewards that match their lifestyle, and personalized apps that track financial health, but there’s been little innovation that speaks to this,” he said.

With the COVID-19 pandemic accelerating touchless payments — as more people avoided in-person interaction and shopping — the demand for more digital financial offerings has exploded.

With its new initiative, Marqeta aims to be able to help its customers launch new customized credit card products “in a fraction of the time, with more flexible controls and features.”

 

For example, they will have what Marqeta describes as a modern credit system of record that can adjust account parameters, such as rewards, APR and credit lines, in real time based on custom rules. Customers will have the ability to instantly activate cardholders upon approval and provision cards directly into digital wallets.

Gardner called Menlo Park-based Deserve “an ideal first strategic partner” in its expansion into the credit card market.

“We plan to offer program management services for customers using our credit card issuing platform through an ecosystem of partners,” he said. “They are a good DNA fit for what we’re trying to accomplish – with a strong belief in the power of open APIs to increase speed to market, and also targeting innovators looking to build truly modern card products. They’re experienced in the credit card space, which has a unique set of requirements, and have a unique approach to underwriting.”

For its part, Deserve says its B2B business has been growing in recent years, with it currently adding one prospect every week and one new partner to its business every month. More than 1.5 million consumers have applied and interacted with its platform over the past three years and the company is currently serving hundreds of thousands of customers (directly and indirectly), with tens of millions of dollars transacting every month on its platform, according to Kapadia.

Deserves also manages the entire credit card infrastructure for companies like Sallie Mae in the cloud, whereby consumers applying for and using Sallie Mae credit cards are engaging with Deserve behind the scene. It also provides origination services to companies such as BankMobile. Other fintechs such as Opploans, BlockFi and Earnest use its entire credit card infrastructure to launch their credit products. 

The credit market is dominated by legacy technologies, high cost of operations and lack of customization and speed,” Kapadia told TechCrunch. “Marqeta’s leading card-issuing platform paired with Deserve’s digital card expertise will enable further innovation in the credit industry and provide consumers with superior card experiences.”

 

 

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Israel’s “green pass” is an early vision of how we leave lockdown

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The commercial opens with a tempting vision and soaring instrumentals. A door swings wide to reveal a sunlit patio and a relaxed, smiling couple awaiting a meal. “How much have we missed going out with friends?” a voiceover asks. “With the green pass, doors simply open in front of you … We’re returning to life.” It’s an ad to promote Israel’s version of a vaccine passport, but it’s also catnip for anyone who’s been through a year in varying degrees of lockdown. Can we go back to normal life once we’ve been vaccinated? And if we can, what kind of proof should we need?

Although there are still many unknowns about vaccines, and many practical issues surrounding implementation, those considering vaccine passport programs include airlines, music venues, Japan, the UK, and the European Union

Some proponents, including those on one side of a fierce debate in Thailand, have focused on ending quarantines for international travelers to stimulate the hard-hit tourism industry. Others imagine following Israel’s lead, creating a two-tiered system that allows vaccinated people to enjoy the benefits of a post-pandemic life while others wait for their shots. What is happening there gives us a glimpse of the promise—and of the difficulties such schemes face.

How it works

Israel’s vaccine passport was released on February 21, to help the country emerge from a month-long lockdown. Vaccinated people can download an app that displays their “green pass” when they are asked to show it. The app can also display proof that someone has recovered from covid-19. (Many proposed passport systems offer multiple ways to show you are not a danger, such as proof of a recent negative test. The Israeli government says that option will come to the app soon, which will be especially useful for children too young to receive an approved vaccine.) Officials hope the benefits of the green pass will encourage vaccination among Israelis who have been hesitant, many of whom are young. 

“People who get vaccinated need to know that something has changed for them, that they can ease up,” says Nadav Eyal, a prominent television journalist. “People want to know that they can have some normalcy back.”

Despite the flashy ads, however, it’s still too early to tell how well Israel’s program will work in practice—or what that will mean for vaccine passports in general. Some ethicists argue that such programs may further entrench existing inequalities, and this is already happening with Israel’s pass, since few Palestinians in the occupied territories of Gaza and the West Bank have access to vaccines

The green pass is also a potential privacy nightmare, says Orr Dunkelman, a computer science professor at Haifa University and a board member of Privacy Israel. He says the pass reveals information that those checking credentials don’t need to know, such as the date a user recovered from covid or got a vaccine. The app also uses an outdated encryption library that is more vulnerable to security breaches, Orr says. Crucially, because the app is not open source, no third-party experts can vet whether these concerns are founded.

“This is a catastrophe in the making,” says Ran Bar Zik, a software columnist for the newspaper Haaretz. 

Zik recommends another option currently available under the green pass program: downloading a paper vaccination certificate instead of using the app. Although that’s possible, the app is expected to become the most widespread verification method.

Unnecessarily complicated

In the US, developers are trying to address such privacy concerns ahead of any major rollout. Ramesh Raskar runs the PathCheck Foundation at MIT, which has partnered with the design consultancy Ideo on a low-tech solution. Their prototype uses a paper card, similar to the one people currently receive when they’re vaccinated. 

The paper card could offer multiple forms of verification, scannable in the form of QR codes, allowing you to show a concert gatekeeper only your vaccination status while displaying another, more information-heavy option to health-care providers. 

“Getting on a bus, or getting into a concert, you need to have a solution that is very easy to use and that provides a level of privacy protection,” he says. But other situations may require more information: an airline wants to know that you are who you say you are, for example, and hospitals need accurate medical records. 

It’s not just about making sure you don’t have to hand over personal information to get into a bar, though: privacy is also important for those who are undocumented or who mistrust the government, Raskar says. It’s important for companies not to create another “hackable repository” when they view your information, he adds. 

He suggests that right now commercial interests are getting in the way of creating something so simple—it wouldn’t make much money for software companies, which at least want to show off something that could be repurposed later in a more profitable form. Compared with Israel, he says, “we’re making things unnecessarily complicated in the US.” 

The way forward

It’s unclear what the US—which, unlike Israel, doesn’t have a universal identity record or a cohesive medical records system—would need to do to implement a vaccine passport quickly. 

But whichever options eventually do make it into widespread use, there are also aspects of this idea that don’t get laid out in the ads. For example, proposals have been floated that would require teachers and medical staff to provide proof of vaccination or a negative test to gain admittance to their workplaces. 

That could be overly intrusive on individual privacy rights, says Amir Fuchs, a researcher at the Israel Democracy Institute. Still, he says, “most people understand that there is a logic in that people who are vaccinated will have less limitations.”

Despite the progress in delivering vaccines, all these passport efforts are all still in the early stages. PathCheck’s idea hasn’t rolled out yet, although pilots are under discussion. In Denmark, vaccine passports are still more a promise than a plan. And even in Israel, the vision put forward by government advertising is still just an ambition: while pools and concert venues may be open to green pass holders, dining rooms and restaurants aren’t open yet—for anybody.

This story is part of the Pandemic Technology Project, supported by the Rockefeller Foundation.

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Hyzon Motors’ hydrogen fuel ambitions include two US factories

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Hyzon Motors plans to produce fuel cells, including a critical component required to power hydrogen vehicles, at two U.S. factories in a move aimed at kickstarting domestic production at a commercial scale.

The hydrogen-powered truck and bus manufacturer has already leased a 28,000-square-foot facility in the Chicago suburb of Bolingbrook and plans to expand it by an additional 80,000 square feet. Production at the Chicago facility is expected to begin in the fourth quarter of 2021. The announcement comes just three weeks after Hyzon announced it would become a publicly traded company through a merger with Decarbonization Plus Acquisition Corporation in a deal valued at $2.1 billion, and a little over one week after revealing plans to renovate a 78,000-square-foot factory in Monroe County, New York.

Hyzon is a new name with a nearly two decades of experience. The company was established in March of last year after spinning off from Singapore’s Horizon Fuel Cell Technologies, which has been developing commercial applications for fuel cells since 2003. Hyzon inked a deal in February with the New Zealand company Hiringa Energy for up to 1,500 fuel cell trucks on New Zealand’s roads by 2026. Now it is setting its sights on the North American hydrogen fuel cell vehicle market. Due to the lack of an established domestic hydrogen fueling network, the company is targeting heavy-duty vehicle customers that have a “back-to-base” business model.

Hyzon’s decision to build factories in the United States is noteworthy because production of fuel cell materials in the country lags far behind Europe and Asia. The U.S. also lacks the kind of national hydrogen refueling and infrastructure network found abroad.

“Hydrogen is much more available in places like Germany or The Netherlands,” Hyzon CEO Craig Knight said in an interview with TechCrunch. “There’s already a number of commercial vehicle stations where you can just pull up and pay to fill up like you do with gasoline today in the U.S. It won’t be long before that is a reality, but for the moment we limit the dependence on networks of hydrogen stations by focusing on the customers that use back-to-base operating models, where you only need one piece of hydrogen infrastructure to fuel dozens or even sometimes hundreds of vehicles in a given area.”

Much of the hydrogen that’s produced in the U.S. is so-called “grey hydrogen,” or hydrogen that’s produced from natural gas. An increasing number of companies are pursuing “green hydrogen,” or hydrogen produced via electrolysis powered by renewable energy. Hyzon sources both types for its operations. Hydrogen production remains one of the main factors determining the rate of scale for fuel cell producers.

The Chicago facility will design, develop and produce the membrane electrode assembly, the fuel cell component that helps trigger the electrochemical reaction required to produce power. The company anticipates the new facility will be able to produce enough MEAs for up to 12,000 fuel cell-powered trucks annually.

Finished MEAs will be sent to the company’s recently announced fuel cell stack and system assembly plant in Monroe County, where the components will be assembled into complete fuel cells. From there, the fuel cells will be delivered to a partner truck manufacturer to be assembled into commercial heavy-duty vehicles. The company’s main assembly partner in the United States is Berkshire Hathaway subsidiary Fontaine Modification.

Hydrogen fuel cell technology is finding use cases in heavy-duty vehicles because trucking companies are frequently paid by how much weight they can transport, and how quickly they can do it. The time investment of battery charging and the loss of carrying capacity makes fuel cells an attractive alternative for companies looking to decarbonize their vehicle fleets.

Hyzon sees positive network effects and economies of scale associated with hydrogen fuel cell adoption — and increasing marginal costs of electric battery adoption. Although the company has not announced plans to dive into the light-duty vehicle market, it remains bullish on the value proposition of hydrogen fuel cells.

“We think at some point it becomes an increasing marginal cost of adoption for battery electric, because you run into infrastructure limitations around the electricity grid, around the size of depots and the capacity to build the charging infrastructure,” Knight said. “We believe there’s a dis-economy of scale attached to going battery electric when you’ve got really high utilization. We believe that some of the lighter vehicles will also start to move onto hydrogen. We’re not totally dependent on that for our model, but that’s our belief.”

Hyzon, which expects to be listed on the Nasdaq in late May or early June, will be listed under the ticker HYZN.

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Donald Trump is one of 15,000 Gab users whose account just got hacked

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Promotional image for social media site Gab says

Enlarge (credit: Gab.com)

The founder of the far-right social media platform Gab said that the private account of former President Donald Trump was among the data stolen and publicly released by hackers who recently breached the site.

In a statement on Sunday, founder Andrew Torba used a transphobic slur to refer to Emma Best, the co-founder of Distributed Denial of Secrets. The statement confirmed claims the WikiLeaks-style group made on Monday that it obtained 70GB of passwords, private posts, and more from Gab and was making them available to select researchers and journalists. The data, Best said, was provided by an unidentified hacker who breached Gab by exploiting a SQL-injection vulnerability in its code.

“My account and Trump’s account were compromised, of course as Trump is about to go on stage and speak,” Torba wrote on Sunday as Trump was about to speak at the CPAC conference in Florida. “The entire company is all hands investigating what happened and working to trace and patch the problem.”

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