Banking as a service: What is it and how to select the right provider?

No. Open banking involves sharing financial data from a traditional bank account with third-party providers via APIs to give users better insights or services. Banking as a Service allows a business to actually provide the banking product itself, such as a card or account, rather than just viewing the data from an existing one.

A platform does not need its own banking license. The BaaS provider holds the necessary licenses and regulatory permissions. The platform uses the provider's infrastructure to offer services under its own brand while the provider remains responsible for compliance with financial laws.

BaaS can significantly increase the speed of money movement. Because the financial services are integrated directly into the platform where business happens, funds from sales can be moved into a user's business account or onto a card instantly. This removes the delays typically found when transferring money between separate financial institutions.

BaaS can be used internationally if the provider holds licenses in multiple jurisdictions. A full-stack provider with a global footprint allows a platform to offer the same financial products across different countries through a single integration, simplifying the process of entering new markets.