BaaS
GeneralBanking as a Service
Definition
Banking as a Service (BaaS) is a model in which licensed banks provide their banking infrastructure—accounts, payments, cards, and sometimes lending—via APIs so non-banks can offer regulated financial products under their own brand. BaaS providers handle charter, compliance, and settlement; the BaaS client builds the customer experience. It is a subset of embedded finance and distinct from open banking, which focuses on data sharing rather than providing full banking products. BaaS is also commonly referred to as BaaS banking.
Related Terms
Embedded Finance
Embedded finance is the integration of financial services—payments, banking, lending, insurance, car...
Embedded Banking
Embedded banking is the integration of banking services—such as accounts, payments, and cards—into n...
Open Banking
Open Banking is the practice of banks and other account providers exposing customer account and paym...
PSP
Payment Services ProviderA Payment Services Provider is an entity which carries out regulated payment services, including AIS...
Frequently Asked Questions
What is Banking as a Service?
Banking as a Service (BaaS) is a model in which licensed banks provide their banking infrastructure—accounts, payments, cards, and sometimes lending—via APIs so non-banks can offer regulated financial products under their own brand. BaaS providers handle charter, compliance, and settlement; the BaaS client builds the customer experience. It is a subset of embedded finance and distinct from open banking, which focuses on data sharing rather than providing full banking products. BaaS is also commonly referred to as BaaS banking.
What does BaaS stand for in Open Banking?
BaaS stands for Banking as a Service. It is a fundamental concept in Open Banking and PSD2 regulations. Banking as a Service (BaaS) is a model in which licensed banks provide their banking infrastructure—accounts, payments, cards, and sometimes lending—via APIs so non-banks can offer regulated financial products under their own brand. BaaS providers handle charter, compliance, and settlement; the BaaS client builds the customer experience. It is a subset of embedded finance and distinct from open banking, which focuses on data sharing rather than providing full banking products. BaaS is also commonly referred to as BaaS banking.
How does BaaS relate to Open Banking?
Banking as a Service is a key concept in the Open Banking ecosystem, falling under the General category. Banking as a Service (BaaS) is a model in which licensed banks provide their banking infrastructure—accounts, payments, cards, and sometimes lending—via APIs so non-banks can offer regulated financial products under their own brand. BaaS providers handle charter, compliance, and settlement; the BaaS client builds the customer experience. It is a subset of embedded finance and distinct from open banking, which focuses on data sharing rather than providing full banking products. BaaS is also commonly referred to as BaaS banking.
More General Terms
Embedded Banking
Embedded banking is the integration of banking services—such as accounts, payments, and cards—into n...
Embedded Finance
Embedded finance is the integration of financial services—payments, banking, lending, insurance, car...
Open Banking Ecosystem
The Open Banking Ecosystem refers to all the elements that facilitate the operation of Open Banking....
Open Banking Services
The Open Banking services provided by Open Banking Limited to Participants, including but not limite...
Open Finance
Open Finance is the extension of Open Banking-like data sharing and third party access to a wider ra...
Participant
An API Provider, API User, ASPSP, or TPP that currently participates in the Open Banking Ecosystem. ...
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