September 12, 2023
Banking as a service is a way for tech companies to partner with banks in order to make the bank’s financial products (e.g., bank accounts, credit cards) available to their customers.
Under this partnership model, a chartered bank allows a tech company to market the bank’s products under the tech company’s brand name. For example, although it is not a bank, Apple makes the Apple Card (a credit card) available to its customers. In order to do so, Apple partners with Goldman Sachs, a bank. (article continues below)
Although it’s possible to partner directly with a bank, many companies that make financial products available to their customers choose to do so with the help of a banking-as-a-service (BaaS) platform, which facilitates the partnership between the bank and the tech company.