Banking as a service

Tearsheet Buyers Guide: Banking as a Service (Part 3)

  • Banking as a Service technology is powering many of today's top apps.
  • Tearsheet is publishing an in-depth series on everything you need to know about the industry and the players in it
close

Email a Friend

Tearsheet Buyers Guide: Banking as a Service (Part 3)

This is the third part of our introduction to Banking as a Service. For more information on BaaS, see part one and part two.

Criteria on how to choose a BaaS provider

Everyone is trying to help companies build banking products. What they actually need varies from company to company. With all the different companies out there, how does one choose the best solution for his requirements?

Let’s say a company wants to be able to store cash for its customers. This may sound easy — just set up a bank account and they are good to go. But in reality, there are multiple ways to solve this problem. A user can be onboarded into a general account where all user funds are kept (FBO), you could create a real account for that user, or even implement a prepaid card that feels like an account.

So although everyone is trying to solve the same thing — how to store cash — the use cases would require different solutions. The differences become highlighted when you ask the questions, “What is possible, what am I able to build, and how scalable is it?” And most importantly, what is the economic model?

Every company wants to be able to get tons of users by offering awesome products, but people are starting to realize that with a better structure, things are less costly and ultimately result in higher profits.

Budget Size

Approaching a large BaaS provider that provides a full suite of services may not be a good use of time and resources for a startup on a tight budget. A better bet would be to select a skeleton BaaS that will allow for connectivity to their APIs to provide banking services to the end customer.

Feature requirement

A challenger bank will require comprehensive banking features like account origination, but a money transfer company looking to payout money on a debit card will only need debit card features. Some providers offer a much more comprehensive suite of services than others, but will charge more for it. It’s easier to choose the best solution if a buyer knows exactly what she wants.

Compliance Knowledge

If a company wants to offer banking services, it will need to know how to act like a bank in more ways than just offering the services itself. Baas providers will help, but compliance, regulation, and KYC are all important parts of providing banking services, and not knowing anything about them can present a serious obstacle for a company looking to DIY bank.

Branding Importance

Like other technology solutions, partnering with a BaaS provider has impact on the branding of a company’s end product.  Do customers receive a metal bank card? How about dedicated customer service agents for the card? Is premium packaging of mail and bank cards something customers will appreciate? Some companies specialize in branding and marketing, others just give what is needed to get started.

Use Case Complexity

Some companies that want to launch a banking product require a complex use case which would require deeper access to banking APIs. Others require less in-depth control of components. Based on the complexity of the use case, different solutions will be more or less appropriate.

In our next installment in this series, we’ll provide a list of BaaS providers and describe their strengths and weaknesses.

Banking as a Service Buyers Guide

10 comments on “Tearsheet Buyers Guide: Banking as a Service (Part 3)”

  • OpinionMaker ,

    australian shepherd mini puppy

    […]always a huge fan of linking to bloggers that I adore but really don’t get a lot of link adore from[…]

  • OpinionMaker ,

    beautiful dogs for sale

    […]Here are a number of the web-sites we advise for our visitors[…]

  • OpinionMaker ,

    white australian shepard

    […]just beneath, are many completely not connected internet sites to ours, on the other hand, they’re certainly really worth going over[…]

  • OpinionMaker ,

    Marijuana Dispensary Near Me

    […]Wonderful story, reckoned we could combine several unrelated data, nonetheless actually really worth taking a search, whoa did one particular understand about Mid East has got extra problerms at the same time […]

  • OpinionMaker ,

    Indica vs Sativa

    […]just beneath, are many entirely not related internet sites to ours, nonetheless, they may be surely worth going over[…]

  • OpinionMaker ,

    big boned german shepherd puppies

    […]Here is an excellent Weblog You may Discover Exciting that we Encourage You[…]

  • OpinionMaker ,

    Gelato Thc Oil

    […]please visit the web sites we comply with, like this 1, as it represents our picks through the web[…]

  • OpinionMaker ,

    Willie Nelson Strain

    […]below you’ll find the link to some websites that we think you ought to visit[…]

  • OpinionMaker ,

    Batman Og Strain

    […]although web-sites we backlink to beneath are considerably not related to ours, we feel they are essentially really worth a go as a result of, so possess a look[…]

  • OpinionMaker ,

    Og Kush Strain

    […]check beneath, are some completely unrelated web sites to ours, having said that, they are most trustworthy sources that we use[…]

Outlier OpinionsMakers

Banking as a service

Launching with over 100 clients, Galileo’s Instant helps businesses pay gig workers

  • After beta launch of Instant last year, Galileo has seen strong interest in its new solution.
  • Instant enables business to launch a debit card really quickly.
Zoe Murphy | June 26, 2020
Banking as a service

Q2 rebrands Cambr as Q2 BaaS as it moves on from its partnership with StoneCastle

  • Q2 is ending its Cambr partnership with deposit network, StoneCastle.
  • Rebranding as Q2 BaaS, the firm is preparing to ramp its presence in embedded finance.
Zachary Miller | June 18, 2020
Banking as a service

BBVA’s banking as a service platform launches real time payments

  • BBVA's banking as a service clients now have access to real time payments.
  • Open Platform's new capabilities are powered by Visa Direct.
Michael Deleon | June 12, 2020
Banking as a service

Green Dot launches digital banking service for immigrants with Welcome Technologies

  • Green Dot's banking as a service offering offers non-bank brands accounts, branded cards, and payments
  • Welcome Technologies services a U.S. immigrant population
Michael Deleon | June 01, 2020
Banking as a service, Podcasts

On Open Platform, BBVA’s banking as a service offering, with Susan French

  • BBVA's Open Platform is a competitive banking as a service offering in the U.S.
  • Head of product Susan French joins us to discuss what products and services the platform powers.
Zack Miller | February 27, 2020
More Articles