With a five-year agreement, Varo Bank has chosen Marqeta to be its issuer processor in order to further its goal of enabling financial inclusion for both its clients and the communities it serves.

The United States' first consumer tech bank with a national charter is Varo. Fee-free checking accounts, free ATM usage, credit lines, cash advances, fast payment options, and high-yield savings accounts are just a few of the services it offers.

Varo claims to have chosen Marqeta because of its capacity to integrate virtual, tokenized, and physical card-issuing technology with a quicker speed-to-market. Currently, there are more than 5 million cards available on the market.

Varo: Choosing a complementary issuer partner

"We sought an issuer partner that complements our unique position as both a technology company and a regulated financial institution," says Colin Walsh, CEO of Varo Bank, in reference to the new alliance.

We are able to provide our clients with state-of-the-art card issuing technology through our cooperation with Marqeta, which improves their ability to effectively see and manage their transactions. This development is entirely consistent with our goal of financial empowerment.

Regarding Marqeta, it made the choice to back Varo after seeing in its 2024 State of Payments report that most customers either already had a digital-only or non-traditional financial institution as their primary bank account or were looking for a method to switch.

In a Marqeta poll, 51% of respondents reported having already switched their primary bank, while another 18% were thinking about switching to digital-first banking.

Furthermore, 20% of US customers stated that when considering a primary account move, they would prefer a better mobile banking experience.

Customers desire a digital banking experience, and by partnering with companies like Varo, Marqeta is fostering the expansion of contemporary banking in the US.

Marqeta's CEO, Simon Khalaf, states: "We are pleased to announce our partnership with Varo Bank, which utilizes cutting-edge payment and banking technology to support Americans who are working hard to achieve their goals.

"Varo's goal and ours are similar, and we are excited to collaborate with them to innovate so that their customers can view transactions instantly through Marqeta's APIs."

Varo will also allow its cardholders to use digital wallet tokenization with Apple and Google Wallets by utilizing Marqeta's technology. As a consumer tech bank, it is the first bank in the US to be granted a de novo national bank charter.

The rise of Varo

With 5 million cards available, Varo has come a long way since its inception in 2015 by Colin Walsh, a former executive at Wells Fargo, and its 2020 national bank charter award.

Leading institutional investors including Warburg Pincus, The Rise Fund, Gallatin Point Capital, Harbourvest Partners, Progressive Insurance, Russell Westbrook Enterprises, and Lone Pine Capital have contributed more than US$992.4 million to the cause thus far.

Varo's business strategy blends the expertise of seasoned bankers with that of emerging tech specialists to provide users with the greatest mobile banking app experience together with the financial acumen of seasoned bankers to help them make wise financial decisions.

Recently, Varo commemorated four years of having a national bank charter.