Enterprise Issuers Underserve Startups
Banking-as-a-Service: The $1T Market to Build the Twilio of Embedded Finance
Marqeta’s success shows that card issuing gets stronger as customers get bigger, which creates a real opening below the enterprise. Large fintechs want custom workflows, negotiated pricing, and deep reliability, so a provider can end up shaped around a few giant accounts. Startups need something different, fast setup, simple docs, flexible KYC, and low minimums, which is where all in one BaaS platforms and developer first issuers can win.
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The small customer problem is practical, not theoretical. A seed stage company like Pry cared most about shipping in a month or two, easy API docs, light upfront integration work, and low or no per virtual card fees. Those needs are very different from Square level scale requirements.
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Marqeta’s model was built around a small number of high value customers. The research notes about 160 customers, roughly $488M in yearly revenue, and heavy concentration in Square. That kind of book supports deep enterprise service, but it naturally deprioritizes the long tail of smaller builders.
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Newer BaaS platforms try to package the missing pieces for startups, bank partner access, compliance workflows, account setup, cards, and payments in one layer. That matters because going direct to banks can take 12 to 24 months, while packaged platforms can get a developer testing much faster.
The market is likely to split more clearly from here. Enterprise issuers will keep winning the biggest fintech and brand programs, while the next wave of BaaS companies competes to become the default starting point for thousands of smaller embedded finance products. The winners in that layer will be the ones that make financial features feel as easy to launch as adding payments or messaging to an app.