Preventing Customer Concentration in Card Issuing
Deb Bardhan, Chief Business Officer at Highnote, on incentive structures in card issuing
This is really a statement about keeping an infrastructure company from turning into a custom shop for one giant account. In card issuing, the biggest programs can force special pricing, support, and product work because they control so much volume. Marqeta showed the upside of landing a breakout like Cash App, but also the tradeoff, concentrated revenue means the largest customer gets more leverage over roadmap, renewals, and economics. Highnote is signaling a deliberate attempt to spread that leverage across many programs and verticals instead.
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Issuer processors sit in the middle of the card stack. They let customers create cards, set spend controls, and approve or deny transactions by API, while sponsor banks and networks handle the regulated bank and rail pieces. Because revenue is tied to transaction volume and interchange splits, one hypergrowth customer can quickly dominate the P&L.
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Marqeta became the category leader by serving large programs like Cash App, Klarna, and Ramp, and that scale gave it reliability and pricing advantages. But the same enterprise model produced concentration. Prior research pegged Square at roughly 70% to 73% of Marqeta revenue in 2020 to 2021, making contract terms and roadmap influence unusually important.
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The alternative model is to aggregate a broader base of smaller and mid sized customers, especially embedded finance use cases where cards are one feature inside a larger product. Those customers usually need standard APIs and faster launch more than custom platform work, which supports wider revenue distribution and lowers the risk that one account dictates product decisions.
The market is moving toward more bundled and vertical use cases, where issuing is combined with software, lending, or workflow automation. That favors providers that can serve many repeatable customer patterns without overbuilding for any single whale. The long term winners are likely to be the ones that keep enough standardization to scale, while still offering enough flexibility to win serious enterprise programs.