* This chart and data were pulled from The Rise of Banking-As-A-Service Report by Business Insider Intelligence. Purchase the report here to get immediate access to the full analysis. |
A decade-old idea, Banking as a Service (BaaS), has been implemented by a relatively small number of innovative financial services providers over the last five years. Fidor Bank, solarisBank, and US incumbent Bancorp are among the early adopters of open APIs and BaaS.
As open banking continues to catch on around the globe, more banks will open their APIs to third parties — to benefit from this shift, incumbents can look at BaaS platforms as an opportunity to turn nimble startups into clients and diversify revenue. BaaS providers have been exploring ways to gain from their offerings, including: |
| Banks can charge their BaaS clients a monthly fee for their services. These subscription plans usually come with monthly API call limits. The advantages of this pricing model are predictable monthly revenue and greater revenue from low-usage clients compared with a usage-based pricing model. |
| They can price each BaaS service individually or offer them as a bundle. Another way to directly monetize BaaS platforms is by adding a fee to each individual API call a client makes — also known as pay-as-you-go or usage-based billing. For this model to work, BaaS providers need a number of heavy users to achieve scale, as income is less predictable using this pricing model. |
| A combined pricing model is also an option. Those monetization strategies aren't mutually exclusive, with both ClearBank and Railsbank charging for additional services on top of a monthly fee. This model gives BaaS providers the... |
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