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Banking as a Service (BaaS)

Banking as a Service (BaaS) is a business model that allows non-bank companies to offer financial products and services using the infrastructure and licenses of regulated banks. Through BaaS platforms, companies like fintech startups, retailers, or other non-banking entities can provide services such as payments, loans, and digital wallets directly to their customers without becoming fully licensed banks themselves. This is made possible through APIs (Application Programming Interfaces) that connect these companies to the banking system.

Example

A retail company might use BaaS to offer branded credit cards or savings accounts to its customers, all managed through a BaaS provider’s platform.

Key points

• Allows non-banks to offer financial services using a licensed bank’s infrastructure.

• Enabled by APIs that connect companies to banking systems.

• Facilitates faster and cheaper entry into the financial services market.

Quick Answers to Curious Questions

Non-bank companies benefit by being able to offer financial services without needing to become fully licensed banks.

BaaS uses APIs to allow non-bank companies to integrate banking services into their own platforms using a licensed bank’s infrastructure.

BaaS is increasing competition and innovation by allowing more companies to offer financial products and services.

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