Tuesday, 01 December 2020

Should you partner with an existing bank to offer banking and payment services to your customers?

This may seem a curious question, but it’s a relevant one for many enterprises operating in the US. At a time when Americans are spending so much more of their lives online, offering an integrated digital banking and payments service to your customers can be a huge competitive advantage that can help you attract and retain customers and drive revenue growth.

It’s also a cheaper, quicker and more cost-effective way for companies to distribute payments to vendors, customers and employees. The reality is that embedded banking and payments technology is relevant to any business that handles high volume payments in some part of its operations. That’s basically every large company.

Yet banking and payment regulations in the US are complex and constantly changing and applying for a bank charter, for example, is a time-consuming, challenging and expensive process. Take the case of Varo Money, a digital bank, which became the first consumer fintech company to be granted a national banking charter by the Office of the Comptroller of the Currency (OCC) in July 2020. Varo’s CEO Colin Walsh said in an interview with the Financial Times this month that it took the company three years to secure the charter and cost nearly $100 million. 

Every company can offer banking and payment services

That’s what makes Banking as a Service platforms like BBVA Open Platform an increasingly powerful tool. By partnering with a Banking as a Service (BaaS) provider, your company can access the banking and payments services, secure infrastructure and regulatory support of a licensed bank while avoiding the time, effort, cost and uncertainty of applying for your own bank charter. 

Instead, approved companies that meet applicable bank standards can enter into an agreement with BBVA. Such an agreement enables your company to work with BBVA on a customized solution if your company does not have a bank license itself.* 

Working with a Banking as a Service provider also means that you do not have to develop your own banking and payments products. Your provider can help you get to market with next-generation banking and payment products that are integrated in your own brand and transform your customer’s experience, and do so quickly, more economically, and at scale. 

Using BBVA Open Platform’s banking and payment services, for example, you could offer your customers a wide range of convenient payment options, deposit accounts and debit cards, all under your own brand. 

Services to support multiple use cases

Offering embedded banking and payments services is a huge benefit whether you are an online marketplace, a financial management or lending company, an insurance company, a gig economy company, a tech company, or any other company. 

Insurance companies have a competitive advantage when they can settle insurance claims with instant payments to customers to debit cards or prepaid cards. Online marketplaces have a similar leg up on competitors when they can offer banking and payments services to both buyers and sellers. To discover how Simple, Catch, Tuvoli and a number of other companies are already using Open Platform to deliver exceptional new services to their customers, read our case studies.

In short, a Banking as a Service platform is a convenient way for your company to offer embedded banking and payments to your customers, streamline processes, attract new business and increase revenues, all without investing the time, effort and money required to become a bank.

Get in touch with us to find out how BBVA Open Platform can integrate banking and payments services into your business. 

*You are responsible for complying with all laws and regulations that apply to your business, which will depend on your specific use case. 


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