What is banking as a service? Banking as a Service (BaaS) is a financial industry concept that refers to the delivery of banking and financial services through a third-party platform or API (Application Programming Interface). Essentially, banking as a service providers allow non-banks, such as fintech companies, startups, and others, to leverage the infrastructure and capabilities of traditional banks to provide various financial services to their own customers without having to hold a full banking license themselves. In the BaaS model, banks make their services, such as account creation, payment processing, loan origination, and compliance, available through APIs that can be integrated with other companies’ systems. The bank’s system communicates with these third-party platforms through APIs and webhooks, enabling seamless integration of banking services. This allows these third-party companies to develop and offer their own financial products and services, such as digital wallets, money transfer apps, investment platforms, etc., without having to develop the entire underlying banking infrastructure from scratch. This integration allows businesses to access banking services directly, enhancing customer experience and brand interaction.
What is Banking as a Service (BaaS)? How it works and benefits.
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