If you don’t already know, banking as a Service (BaaS) is a model that allows non-banking companies to offer financial services to their customers by integrating banking functionality into their own products or platforms. You can read a more detailed article about it here.
BaaS is made possible through partnerships with licensed banks or financial institutions that provide the underlying banking infrastructure and regulatory compliance.
BaaS works by enabling businesses to access banking capabilities via APIs (Application Programming Interfaces).
These APIs allow companies to seamlessly incorporate services such as account opening, payments, lending, and card issuance into their own applications or websites. The BaaS provider handles the complex backend processes, regulatory requirements, and security measures, while the business focuses on creating a tailored user experience.
For businesses, BaaS offers numerous advantages. It allows them to expand their product offerings, create new revenue streams, and enhance customer engagement without the need to become a bank themselves.
This can lead to increased customer loyalty, improved user experiences, and the ability to tap into new markets. Additionally, BaaS enables faster time-to-market for financial products and reduces the costs and complexities associated with developing banking infrastructure from scratch.
While all these sound interesting, you’re probably wondering, how can I improve my business with BaaS or what features can I add to my business with BaaS to gain more customers and improve retention?
Here are six features you can add to your business with BaaS
Digital wallet Integration
Digital wallet integration allows small businesses to offer customers a convenient way to store and manage their funds. This feature enables seamless transactions. Customers can make payments from inside the business platform, rather than going out. Could also be a way for the business to generate additional revenue.
For example, if an eCommerce platform has a wallet, customers can make payments from the wallet while the business earns through transaction costs.
Customisable cards
Cards — virtual or physical — can help customers have a dedicated billing card for transactions they perform on a particular business platform. If a streaming platform offers cards, for example, customers can dedicate such cards to only the streaming platform.
Some banking as a service platform like Fintava also offer customisable cards which means that cards offered to customers can be branded, helping with brand awareness.
Bill payment
Bill payment services allow small businesses to become one-stop financial hubs for their customers. This feature enables customers to pay various bills—such as utilities, subscriptions, or government fees—directly through the business’s platform. Moreover, businesses can earn commission on each transaction, creating a new revenue stream.
Savings accounts for customers
By offering savings accounts, small businesses can help their customers build financial stability while fostering loyalty. These accounts can offer competitive interest rates and easy management through a mobile app. A local supermarket could introduce a savings programme where customers earn interest on their account balance, encouraging them to keep funds within the business ecosystem for future purchases.
Multi-currency support
Multi-currency support allows businesses to receive payments in multiple currencies which means they can serve customers from different countries. This feature enables transactions in various currencies without the hassle of manual conversions. For instance, an online fashion boutique could offer pricing in naira, US dollars, and Euros, making it easier for customers from different countries to shop without currency conversion concerns.
Micro-lending Services
Micro-lending services enable small businesses to offer short-term, small-amount loans to their customers. This can help build customer loyalty and provide financial support when needed.
