You’ve heard how BaaS platforms and payments platforms differ when it comes to cost and program management time. Now it’s time to consider the other factors that come into play: risk, customization, and onboarding.
Risk of BaaS vs. Payments Platforms
Deciding to integrate payments into your product can build customer loyalty and help you grow your business. But how you go about it can come with varying amounts of risk. Banking and financial services are heavily regulated industries. This is why very few companies actually choose to build their own payments system, as we discussed above, without enlisting a partner or platform. Depending on whether you go with a BaaS platform or a payments platform, you’ll carry different responsibilities. When evaluating your options, be sure to ask:
- What risks do I take on by partnering with you? What is my company legally responsible for?
- How will you handle fraud, card support, and compliance?
- Who handles the KYC/KYB processes?
The takeaway: BasS platforms often partner with vendors to build their compliance program. This is fine, but it means your business will likely take on some pass-through costs as discussed in the Cost section (since having things like KYC and KYB in place are crucial.) If you partner with a payments platform, your company won’t pay for things like KYC and KYB since the platform should take care of those for you without passing on additional costs.
Customization of BaaS vs. Payments Platforms
Each company has different goals when it comes to what they’d like to achieve by adding a payments component to their product. Some companies want the option to tailor their offering to specific use cases, while others need to find something that simply works and can quickly start delivering business benefits. When evaluating your options, ask the following:
- What payments services do you offer and what can you help me achieve?
- What can I expect to gain by offering these services?
- Do you specialize in one type of payments experience?
- What types of companies do you currently work with?
- How customizable will this be down the line?
The takeaway: If you really want to make the most customizable banking product out there then yes, BaaS will typically be your best bet. Yep, we said it: you’ll find more customization with a BaaS platform than you will with a payments platform like Branch. But…there will be a cost. The time, risk, and resources it will take to implement and run your program may not be desirable at the end of the day. If you’re interested in getting up and running fast with a free, turnkey solution, a payments platform with program management capabilities may be a better fit.
Onboarding of BaaS vs. Payments Platforms
Implementing financial services into your product is one thing; actually sustaining the payments and card program is another. Getting people to use your financial services is an entirely separate task—and one that requires careful planning and management. Ask a potential BaaS or payments platform the following questions:
- Who is responsible for onboarding users?
- How much time does onboarding take?
- What does onboarding entail?
- What sort of communications need to be sent to users and how frequently? Who handles that messaging and execution?
The takeaway: Getting people to use your new payments and card program requires a team dedicated to successful onboarding and adoption. With a BaaS platform, your company will be in charge of onboarding and adoption. With a payments platform that handles program management, these aspects of the launch are taken off your plate. (Branch takes pride in the fact that we can onboard new employees in 60 seconds.)
Finding the best way to embed payments for your business
If you’re searching for a way to add a payments component to your product, there isn’t a one-size-fits all solution. Evaluating factors like cost, program management time, risk, customization, and onboarding are all part of the due diligence required to find the solution that’s best for you.
For some companies, BaaS platforms will offer the true customization they crave. For others, payments platforms that offer program management have the upper hand when it comes to speed, cost savings, and risk mitigation–offering your business a way to implement a payments experience into your product without draining your business of time, money, or resources.
It’s important to remember that while there are APIs for everything these days, orchestrating them all together into one cohesive program is a whole separate task. Building the actual interfaces and managing your payments program is something you can outsource to a payments platform like Branch that offers the added benefits of program management. This allows you to grow your business and outpace your competition—without additional time or money.
Get in touch with us today at sales@branchapp.com to learn how we can work with you to create a payments and card program that will boost loyalty and help you outpace the competition.
You can also click below to get your complete guide to Embedding Payments and a Card Program Into Your Product.
