As you’re choosing whether or not to go with a BaaS platform or a payments platform, the factors to consider are cost, program management, risk, customization, and onboarding. This blog will cover the first, perhaps most important considerations: cost and time. Let’s explore what you should ask in regards to both of these factors before you sign a contract. 

Cost of BaaS vs. Payments Platforms

Most likely, you want to enable financial tools in order to cut costs or generate more revenue—not add another line item. As mentioned, there are more hidden costs than you might think when signing on with a BaaS platform, who partners with different vendors for things like underwriting or the KYC (Know your Customer) and KYB (Know your Business) verification processes. A BaaS platform will pass those costs on to you.

These types of pass-through costs aren’t always advertised, so be sure to read the fine print. When evaluating your options, be sure to ask:

• How much will this cost?
• Are there hidden fees?
• What fees will I be responsible for?
• What fees get passed down to the end user?
• What types of pass-through costs will I incur for things like KYC or KYB?
• What is the cost to keep it running after it's implemented?

Here’s a quick rundown of the typical costs of a BaaS platform vs. Branch: a payments platform that comes with program management and support.

The takeaway: With a BaaS, you’ll end up taking on per transaction fees, monthly fees, and inevitably, the pass-through fees of card printing, ATM usage, KYC, and fraud management. A payments platform like Branch, however, is built with a revenue model based solely off of interchange. This means that you don’t end up taking on any hidden fees, pass-through costs, or additional expenses.

Program Management Time of BaaS vs. Payments Platforms

Monetary costs aren’t the only thing you need to consider. Launching a payments and card program will require program management time to stitch everything together and handle the various relationships, programs, and experiences that will constitute your new program. Ask a potential platform the following:

• How fast can we get to market? 
• What will this require from my IT / engineering / product departments?
• What parts of this experience will you manage, and what will I be responsible for managing?
• What can I expect in terms of implementation and onboarding support?
• Once this is up and running, what resources will it take to maintain?

Here’s an overview of the different aspects of program management with a typical BaaS platform vs. Branch: a payments platform who handles your program management.

The takeaway: With a BaaS platform, you’ll take on the responsibility of operating a card program, onboarding, issue management, and other aspects of the user experience.
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To get the complete guide to Embedding Payments and a Card Program Into Your Product, click below.