What is Banking as a Service?

Banking as a Service, explained

In banking as a service, a regulated bank holds the licence, customer deposits, and access to payment networks, while a technology company builds the customer experience on top. BaaS providers often sit in between, offering APIs for opening accounts, issuing cards, moving money, and running identity checks. This is the plumbing behind much of embedded finance.

For example, a freelancer platform could offer users a business account and debit card branded with its own name, while the underlying accounts are held at a partner bank. BaaS lets companies launch financial features faster than building or acquiring a bank. Regulators in the United States and elsewhere have increased scrutiny of these partnerships after failures exposed weak compliance and record-keeping, so careful partner selection and oversight are essential.