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Nium Guest Blog: How BaaS Unlocks the Customer Experience

Apple, Amazon and Facebook’s core portfolio are fundamentally different. Yet all of them have their own digital payment experiences. Why? Among other reasons, it’s the role payments play in user experience, trust and ultimately, the customer experience. The problem is, most enterprises don’t have the network, engineering talent or infinite pool of resources that Apple, Amazon and Facebook do. In this world of payments, it’s simply not feasible for a smaller company to create the kind of payment experience these tech giants can offer. But that competitive advantage is eroding thanks to fundamental shifts that are underway in how payments — across and within borders — are made. These shifts have enabled Banking as a Service (BaaS) to proliferate and break down previously insurmountable barriers to entry in the payments industry. The result is improved customer experience, plus a whole lot more.

Banking as a Service and the No-Longer-High Cost of Entry

Before we explain why BaaS is so important, let’s review exactly what it is. BaaS is an end-to-end process that enables third parties to directly connect with banks’ systems so they can build products on top of the banks’ regulated infrastructure. The reason BaaS is a big deal is that it makes it far easier for everyone—from startups to multinational enterprises—to create seamless, scalable payment experiences across and within borders. According to Angela Strange of Andreessen Horowitz, a VC firm in Silicon Valley, BaaS has proliferated in recent years thanks to:

  • APIs provided by new financial services infrastructure companies.
  • New distribution channels that lower customer acquisition costs.
  • Better data for assessing and assigning risk.


Strange equates this new era in financial technology to the “AWS Phase” for FinTech.

In the same way AWS slashed the cost and complexity of running a software business, APIs, distribution channels and data have slashed the cost of running a fintech business.

Thanks to AWS, sales executives plug into Salesforce and they use the platform to manage pipelines and scale interactions across the customer lifecycle.  Similarly, customer success managers plug into Zendesk to provide omnichannel customer support across channels including email, social media, chat, and phone. Both Salesforce and Zendesk, as well as countless other tech companies, rely on Amazon Web Services. APIs, new distribution channels, and better data have enabled the financial industry to create a similar infrastructure for fintechs and other third parties.

For Strange’s detailed and insightful breakdown of exactly how and why this is happening, read her article in full.

What this Means for You and Your Customers’ Experience

In the same way sales execs and customer success managers “plug into” Zendesk or Salesforce, you can now plug into a platform like Nium’s to provide seamless, instant and efficient payment experiences throughout the globe. For your customers, that means having the payment options they want, when they want them, in the way they want them, without the exorbitant fees, wherever they are in the world. And for you, it means that the customer experience that only Apple, Facebook and Amazon have been able to provide is within reach. As Apple, Facebook, Amazon and other market leaders have shown, a scalable, delightful customer experience unlocks all sorts of potential for your business.

There’s More to BaaS Than Customer Experience

It’s not just more sales or improved customer loyalty that BaaS unlocks for your business. BaaS also enables your company to generate revenue in an entirely new way—through financial services. Thanks to BaaS, you can develop financial products or offer white-labeled financial services to vendors, contractors, consumers and more. All sorts of companies that you wouldn’t think of as a FinTechs are already doing this. In fact, as Angela Strange points out, Shopify, a provider of website services for merchants makes “nearly 50 percent of their revenue through financial services.” MindBody, a company that provides business management software for gym owners, has a similar proportion of their revenue coming from financial services. Consumer-facing companies are doing the same; Uber’s Visa Debit Card is designed with rewards that specifically appeal to drivers and Lyft offers debit cards so drivers can bank with them for free. In the heated competition for drivers, these financial services can tip the scales for Uber or Lyft. As you can see, the ways financial services can add value for your business are no longer constrained by resources and capabilities.

What it Means Today

As exciting as these possibilities are, it’s easy to get overwhelmed by the new era of Banking as a Service. So it’s worth taking a step back and understanding how BaaS can help you out of the box. To do that, we’ll use Nium as an example: Existing methods, such as a wire transfer, by which you make and receive cross-border payments are inefficient, expensive, slow and risky. They come with exchange rate risk, fees and cumbersome customer experiences. Because you can make same-day or real-time payments across borders with Nium’s platform, the risk of significant exchange rate swings is mitigated. And with access to Nium’s Open Money Network, you can offer local funding and settlement options to reduce or avoid cross-border fees. All this also comes with real-time, same-day payment capabilities for you and your customers.

So by working with a company like Nium, you can quickly:

  • Lower foreign exchange rates and fees on cross-border payments.
  • Speed up cross border payments.
  • Improve the payment experience.


In short, Nium’s infrastructure means, for you, the possibilities are endless. This is the new world of payments.

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