What is Banking as a Service (BaaS) and how does it work?
BaaS is a way for bank and non-bank businesses to offer financial services without the need for licences or technology infrastructure.
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BaaS is a way for bank and non-bank businesses to offer financial services without the need for licences or technology infrastructure.
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By integrating a licensed bank's digital banking services directly into a non-bank business through an API, customers can open bank accounts and get debit cards directly on the non-bank business' platform.
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BaaS is useful for non-bank startups, such as business management apps, that want to offer financial services, including payments and credit, but don't want to build new technology or pay for expensive licences.
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BaaS differs from embedded finance, which is a frontend integration that directs customers to a fintech platform for financial services, and API fintech, which connects a loan app to an API fintech platform like Mono for data sharing.
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With BaaS, a licensed bank provides the banking services on the backend, while the non-bank business offers them on the frontend.
PiggyVest, Bumpa and CDcare are some examples of startups using BaaS.
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PiggyVest, Bumpa and CDcare are some examples of startups using BaaS.
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