Capital on Tap is to offer a new credit card lending programme to Spanish SMEs using Marqeta’s modern card issuing platform. As Douglas Blakey reports, the Spanish initiative seeks to build on its successful UK card programme
Card issuing platform Marqeta is working with UK fintech Capital on Tap to expand its small business credit lending services to Spain.
In particular, Capital on Tap will use Marqeta to power payment processing for its small business credit card, offering a working capital facility of up to €50,000 ($56,600) for small businesses.
Capital on Tap’s new Spanish users will be provided with a new, Marqeta-powered credit card, offering small businesses a faster and more transparent way to fund their business.
According to the parties, using Marqeta enables Capital on Tap to help Spanish SMEs to access funding in a more streamlined and frictionless way. For example, its online onboarding processes mean customers do not need to visit their bank and wait weeks for a response; instead, decisions on funding can be made within a day.
In addition, Marqeta-powered credit cards provide more suitable lines of credit, while enabling greater customisation, expense tracking, and categorisations to meet the needs of small businesses.
Ruben Vidal, Spanish MD for Capital on Tap, tells CI: “As the world begins easing Covid-19 restrictions, SMEs will be looking for accessible funding to help them get back up and running again. “
But to date, businesses globally have faced several issues trying to access working capital from state-backed schemes, while banks are taking longer to respond and are more reluctant to lend. As a result, SMEs have been unable to access useful lines of credit focused on their needs.”
3 million sole traders
Vidal adds: “With Marqeta, we’re able to address several issues right away. Our quick and easy processing means SMEs can focus on running their businesses, instead of jumping through hoops to secure the funding they need. We expect to issue millions of euros to Spain’s three million sole traders and small businesses in 2020 and beyond, supporting their plans to reopen, grow and prosper.”
Marqeta’s simple API-driven approach made it simple for Capital on Tap’s systems and developers to customise the card programmes to meet the needs of the Spanish market.
The team was able to replicate its existing card programme in the UK with a few modifications – for example, switching currencies and lending criteria. This helped to ensure all customers and payments are configured and processed in the same way, through one central global platform, reducing operational overheads.
Time to market crucial
“Launching a new card programme in a new region can be extremely complex,” says Zoe Newman, Capital on Tap’s head of international expansion. “With other providers it would potentially involve an entirely new build, but with Marqeta it was surprisingly easy. We could essentially copy and paste our UK model across, with a few small but essential tweaks to ensure it was a perfect fit for the market.”
She adds: “Using our existing Marqeta sandbox environment, we were able to begin testing as soon as we were ready. The Marqeta team was very responsive and on call to help with any of our questions.
“If we’d had to start from scratch with another third-party provider, it would have taken over six months, but once we made the decision it only took a couple of days to get everything up and running. It has also given us a blueprint for expansions across Europe and the US in years to come.”
Covid’s impact on the Spanish cards sector
The Spanish economy is heavily reliant on tourism, which represented 12% of the country’s GDP and 13% of employment at the end of 2019. The gradual revival of travel and tourism at the start of July will drive consumer spending, benefiting payment companies.
Cash has traditionally been a popular payment instrument in Spain, accounting for over 60% of the total transaction volume, but during March 2020 it is estimated that cash withdrawals in Spain fell by 68%.
Rising demand for non-cash payments will drive card payments at POS terminals. GlobalData forecasts that the number of card payments will grow by 2.3% in 2020, while ATM cash withdrawals will decline by 4.4%.
Online spending has also increased as wary consumers stay home and use online channels to purchase goods.
To promote online sales, CaixaBank has launched Social Commerce, a new online solution that enables merchants to sell products on social networks including Facebook, Twitter, Instagram, WhatsApp and Telegram. The rise in e-commerce will also benefit popular online payment tools such as PayPal, Masterpass and Visa Checkout.
The pandemic is also encouraging the use of prepaid cards; for example, CaixaBank extended its partnership with the government to distribute 200,000 social welfare prepaid cards aimed at recipients who are struggling to access their benefits due to the current situation