Platform Split Leaves Midmarket Untapped
Deb Bardhan, Chief Business Officer at Highnote, on incentive structures in card issuing
This points to a classic platform split, Marqeta won early by serving huge programs with enough volume to justify custom contracts and deep implementation work, and that left a real opening below the top tier. In card issuing, smaller and mid sized customers usually need fast onboarding, simpler program setup, and more product flexibility, because they are often launching a new expense card, marketplace payout card, or embedded finance feature without a big payments team. That is the segment newer issuer processors have been built to capture.
-
Earlier infrastructure companies like Marqeta targeted enterprise customers because, at the time, those were the buyers with the staff and budget to assemble a card program. Internal research describes Marqeta as firmly enterprise focused, with newer players like Highnote and Lithic going after the long tail of developers and embedded finance companies.
-
The economics push incumbents upmarket. Marqeta has historically depended on a small number of very large customers, with Square and later Block accounting for an outsized share of revenue. When one big customer drives volume, roadmap attention naturally shifts toward enterprise features, renewals, and custom support rather than lightweight self serve tooling.
-
What mid market customers actually want is not just a processor. They want configurable controls, faster launch, and less stitching across vendors. Highnote has been described as starting with a general ledger and full program management, while Lithic has won with API first issuing and modular controls for growth stage companies with more specialized needs.
The market is moving toward a barbell. The biggest issuers will keep buying scale, reliability, and global reach, while the next wave of growth comes from software companies and fintechs embedding cards into narrower workflows. Providers that can make those programs easy to launch, and then grow with them into larger volumes, are positioned to take the broad middle of the market.