BaaS (Banking-as-a-Service)
A model where a licensed bank offers its accounts, payments, cards and lending through APIs so other companies can build them into their products.
What BaaS is
Banking-as-a-Service (BaaS) is a model in which a chartered bank provides the regulated parts of a financial product, such as accounts, payment rails and cards. A non-bank company builds the customer experience on top. The bank holds the license and the funds. BaaS is the bank infrastructure behind many embedded finance products.
How it works
A BaaS program links the fintech, which designs the product and serves customers, with the sponsor bank, which provides the regulated accounts and rails. Some programs add a program manager to run operations in between.
- 01 · PARTNER The fintech passes a licensed bank's due diligence, then the two agree on a program.
- 02 · INTEGRATE The fintech connects to the bank's APIs for accounts, payments or cards.
- 03 · OPERATE Customers use the fintech's app; the bank holds funds and oversees compliance.
When businesses use it
- Neobanks and fintech apps that offer accounts, debit cards or savings
- Payroll and HR platforms that pay workers or offer pay cards
- Marketplaces that hold seller funds and pay them out
- Software platforms that add payments or lending for their business customers
Cross River provides BaaS through COS, its proprietary API-driven bank core, which connects partners to products for accounts, money movement, cards and lending. Each partner gets a dedicated implementation team and Cross River's compliance and risk management framework. See embedded finance at Cross River.