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What should you consider when choosing BaaS (Banking-as-a-Service)?

Banking as a Service (BaaS) empowers businesses to expand the borders of their activities and enhance operability. 

Banking as a Service streamlines operations and increases customer engagement and brings new revenue streams for the company. 

Finastra predicts the total market opportunity for BaaS will exceed $7 trillion by the end of the decade. BaaS is essential to promoting growth and addressing the demands of an expanding digital business ecosystem. 

Selecting the most suitable provider, it’s paramount for the customer to understand the expectations and the propositions that your potential provider can offer. 

Technology stack



Let’s dive deeper into the detailed points of the main assessment when choosing a BaaS provider.  

APIs rule the service

it’s important to understand why and how APIs improve the business operations of the company. 

API is the mere example of how simplicity meets disruption and penetrates into the whole industry by means of more agile and convenient tools to meet customer requirements and enable value for clients.  

API enables the communication and data connection between participants of the financial transactions - financial institution accounts, fintech companies, and non-financial companies.

Due to APIs, non-financial companies are able to access payment services, in other words, any service that potentially can be provided by the bank can be provided by a business with a financial license. Before API, they had to invest resources in establishing payment services even for partnerships with fintech while API removes this barrier and enables them for more integrated and speedy activities. 

When choosing an API, it’s important to get the notion of how API types and how they facilitate your business area. For example, APIs for Core banking services expand the core fundamental business operations, like loans, payments, and cross-border payments, whereas acquiring APIs set options for POS payment acceptance operations, like E-commerce, mobile POS and traditional pos card payments acceptance. 

Digital wallets, cards and transfers APIs provide functionality for issuing physical/virtual cards, mobile wallets, and P2P transfers. 

The open banking revolution adds functionality to the services proposition and boosts the development of fintech in recent years. Banks open up their APIs for third parties to develop new apps and services, and enable highly configurable workflows.

Following it, APIs are flexible in adapting to the needs of the customers and the way some providers orchestrate this function in one platform. 

In addition, it’s mandatory for the API platform to provide fully descriptive documentation for seamless integration with the support along the whole road of integration. 

Orchestration and interoperability

If your business is an array of services that will be given life only after integration with to BaaS platform, then the choice of BaaS provider should be based on taking into account the functionality of the provider. 

An embedded BaaS makes it possible to provide better interoperability between the services in an ecosystem

The provider that integrates diverse digital workflow under one roof is can be the best solution to the problem, eliminating the extra movements and risk-based actions.  

The most significant fact is to check the payment network opportunities of the provider. Few providers have access to a very limited range of payments, consequently, the variety of payment and money transfer opportunities are cut to one or two payment systems, making the business refer to several providers in order to offer full capability. 

When a provider propositions extend beyond the one system, for example BaaS platform offers payments in all payment systems, in addition the principal member of major payment schemes, the business facilitation is high. 

The rapid digitalization demands from all payment landscape members to be digitally well-equipped to be able to provide end-to-end services and drive innovation. 

Most traditional banks typically are slow in this regard. The BaaS Services providers enable digital orchestration. 

Due to above-described API variations the provider that integrates the cards, payments and acquiring in one place, shows more flexibility and agility in operations, in addition to the fact of reliability. 

Seamless regulation compliance

In recent years’ banks witness rising observance and regulation requirements. The observance demands greater technology investments. 

However, collaboration with fintech provides incumbents with extensive capabilities both in technology and regulation, reducing costs on digitalization and modernization.

It’s vital to point out that the BaaS provider is compliant with PSD2 or GDPR or other legal compliance requirement systems. 

What about GUAVAPAY?

GUAVAPAY BaaS platform integrates almost all the abovementioned points. Full technology stack, memberships in payment networks SWIFT, SEPA, UK local payment systems (Bacs, CHAPS, Faster Payments).

 If you are looking for the most reliable BaaS provider, please contact our Head of Banking-as-a-Service(Grant Wyatt) or our senior relationship manager (Noora Hamdani). 

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