Future of Payments
October 6, 2022

How to Embed Payments and a Card Program Into Your Product

Welcome to our weekly blog series on embedding payments and a card program into your product! Over the next several weeks, we’ll explore the most popular options for embedding financial services and payment tools and the pros and cons of each.

Why do this now? Companies are increasingly realizing that embedding financial services into their product is THE next frontier of innovation and outpacing their competition. The prophecy that “every company will eventually be a fintech company” is starting to reveal itself to be true. In fact, some of the most cutting edge companies are already there.

What are my options for embedding payments?

There are three ways to add payments and a card program into your product:

  • Building a solution yourself
  • Choosing a Banking as a Service (BaaS) platform 
  • Partnering with a payments platform

The first method is incredibly time-intensive, and most companies won’t have the bandwidth or desire to take it on. This leaves us with the two most popular options: BaaS platforms or payments platforms. The one that’s best for you will depend on several factors, including cost, program management time, risk, customization, and onboarding. 

What are the differences?

Though each have their strengths, BaaS platforms have a leg up when it comes to customization. In all other areas, however, a payments platform has them beat. Here’s why:

  • With BaaS platforms, you’ll incur pass-through costs for the various components of the payments process, including card management, KYC verification, and more. With a payments platform, those costs are included since they often make their money from interchange (when users swipe their card).
  • The program management time of using a BaaS platform is burdensome, too, requiring you to handle inventory, relationships with card issuers and networks, end-user support, and more. A payments platform with program management (like Branch) handles all of this for you.
  • The risk of using a BaaS vs. a payments platform is more of a draw. While neither is riskier than the other, a BaaS requires you to take responsibility for risk mitigation since you’re managing the program yourself, along with things like fraud mitigation and disputed charges.
  • Though payments platforms are adaptable and will offer different options to suit your specific needs, a BaaS can usually offer the highest level of customization. But in order to achieve this type of customization, you’ll also need to dedicate a fair amount of engineering and management resources. 
  • The onboarding process is one you can’t leave out of the equation. With a BaaS platform, all aspects of onboarding—from sign-up to user support and more—fall on your shoulders. A payments platform takes care of all of that for you.

In the next parts of our series, we’ll dive deeper into each of the above factors—cost, program management time, risk, customization, and onboarding—so you can see the exact differences between these two popular methods and decide which is the best fit for your company.

Stay tuned for the next part in our series, coming up next week! Before then:

To get the complete guide to Embedding Payments and a Card Program Into Your Product, click below.


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