Card account processor Marqeta will integrate with Italy-based Scalapay, a top provider of BNPL installment loans in Europe. Scalapay joins Klarna, Twisto and Anyday as BNPL providers in Europe that use Marqeta’s platform to process the virtual card payments they make to merchants.

Marqeta operates in 40 countries, including in Europe’s largest markets. To provide card payments on behalf of BNPL providers, it works with their clients’ card-issuing partner. If a client doesn’t have a card issuer, Marqeta suggests UK-based Monavate, a direct member of Visa, Mastercard and Discover, for BIN sponsorship.

Those card issuers provide the virtual prepaid Mastercard and Visa card numbers that BNPL providers use to settle all purchases with merchants upfront, while they wait to receive payment from consumers over time.

Marqeta handles card processing for all its partners, although some BNPL providers handle select support services in-house such as credit underwriting and risk and fraud management. For other partners, Marqeta is the program manager handling all related services.

The ability to provide virtual card payments for BNPL transactions has opened a new opportunity for card account processors. Increasingly, online and in-store retailers feel compelled to provide their customers with real-time credit decisioning so they can deliver instant approval for a BNPL transaction at the time of purchase, even when they’ve had no prior relationship with the consumer.

One big gain for merchants is that BNPL, which is popular with all types of consumers, has opened installment loans to consumers who were previously locked out of the market.

The first BNPL company in the modern era was Klarna. It, along with the other providers who came on the market subsequently, needed integrations with merchants to establish their businesses. This was expensive and time consuming.

Virtual cards do away with the need to have a direct integration with a merchant. Instead, BNPL providers can offer installment loan terms directly to consumers, either from a merchant’s

website or in their stores, and settle the consumer’s purchase with a virtual prepaid card.

Some BNPL providers, including Klarna and Affirm, have started offering consumers physical cards. Marqeta supports the issuance of physical cards, and both Klarna and Affirm are customers.

In the US, Marqeta has virtual card integrations with BNPL providers Affirm, Afterpay and Sezzle as well as Klarna. In Australia, Marqeta has virtual card integrations with Zip and Afterpay.

Some of those companies handle card account support services in-house and others use the complete Marqeta turnkey service. Marqeta offers its services via 370 APIs.

The Marqeta platform that supports virtual BNPL businesses can be used to provide virtual prepaid cards to other companies for use cases that include employee wage advances, extending point-of-sale loans to employees or lending for other purposes.

WorkWhile is an accelerated wage-access customer. Uber uses Marqeta to support its Pro card product for drivers. Block uses Marqeta virtual cards as part of its Cash App mobile payment service. Other international customers include Western Union, Raiffeisen and Capital on Tap.