What does Banking as a service (BaaS), or what's been called embedded banking, mean?

From my perspective, Banking as a Service is a real thing and there are a lot of opportunities. As I see, it is driving a lot of the open banking notion. Every new business has to do deal with banking - not just the financial aspects but also accounting. The API based banking as a service enables other institutions to build on top of traditional capabilities. We've all been hearing that “everything is FinTech.” As long as we believe that everything is FinTech, you now have the ability to merchandise pretty much any online store. How do you run those transactions? How do you enable a mom and pop shop to be able to sell their equipment? And I'm pretty bullish on this. Commoditization of enabling everyone to have access to these financial infrastructures that allow them to sell their goods, get paid is essential for where the digital economy is heading.

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From my perspective, Banking as a Service is a real thing and there are a lot of opportunities. As I see, it is driving a lot of the open banking notion. Every new business has to do deal with banking - not just the financial aspects but also accounting. The API based banking as a service enables other institutions to build on top of traditional capabilities. We've all been hearing that “everything is FinTech.” As long as we believe that everything is FinTech, you now have the ability to merchandise pretty much any online store. How do you run those transactions? How do you enable a mom and pop shop to be able to sell their equipment? And I'm pretty bullish on this. Commoditization of enabling everyone to have access to these financial infrastructures that allow them to sell their goods, get paid is essential for where the digital economy is heading.
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Anonymous Author
My personal view of banking as a service is it's built upon ancient rickety infrastructure and rails. And if you look at the blow up of the Visa-Plaid integration, there are these “BAS” vendors developing technology on legacy payment rails and infrastructure. Like the real opportunity is to disrupt the industry completely, which is hard because it's an old guard. Old school bankers are going to be a tough bunch to crack, but if we really want to get to the world of instant payments and lower fees and reducing them... If you think about the extortion of remittances and payday loans. Getting to a true credit score identity and optimizing that, I think that's the big opportunity, and banking as a service or embedded banking, whatever you want to call it, is only a minor step there. But that's, once again, that's my personal pseudo, somewhat religious or completely religious view.
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