Until a few years ago, offering digital accounts, cards, or Pix was largely limited to banks. Today, retailers, marketplaces, and mobility apps can integrate these features into their own products without having to build a banking operation from the ground up.
One of the main drivers of this transformation is Banking as a Service (BaaS), a model that enables businesses across industries to integrate financial solutions quickly and securely.
The numbers reflect this growing trend. According to Market Research Future, Brazil's BaaS market was valued at $1.5 billion in 2024 and is expected to reach $4.8 billion by 2035, driven by growing demand for digital financial services and the expansion of the fintech ecosystem.
In this article, you'll learn what BaaS is, how it works, which industries use it most, and what to consider when choosing a provider.
What Is Banking as a Service?
Banking as a Service (BaaS) is a model in which a licensed financial institution makes its infrastructure available through APIs, allowing businesses across industries to offer financial services without becoming a bank themselves.
For example, a fintech can launch a digital account, a marketplace can automate payouts to sellers, and an exchange can integrate Pix into its platform without building its own banking operation.
Instead of obtaining a license directly from the Central Bank of Brazil, the company uses the licenses and technology of a licensed partner to offer services such as:
Digital accounts
Cards
Pix and bank transfers
International payments
Foreign exchange
As a result, end customers can deposit, transfer, and make payments directly through a company's app or platform, while the underlying financial operations take place behind the scenes.
How Does BaaS Work?
BaaS connects three participants, each responsible for a different part of the operation:
Licensed financial institution: provides the regulatory infrastructure and safeguards customer funds.
BaaS provider: provides the APIs that connect this infrastructure to the company's systems.
Business using the service: integrates the APIs into its product and delivers financial services to its customers.
For the end user, this process is invisible: they interact only with the company's platform.
The integration takes place through APIs (Application Programming Interfaces), which allow different systems to communicate in real time. When a customer makes a Pix payment, for example, the request is sent to the BaaS provider, which processes the transaction and returns confirmation within seconds.
Embedded Finance, Open Finance, BaaS, and White-Label Banking
These concepts often appear together because they are all part of the financial industry's digital transformation. However, each serves a different purpose. While some enable companies to offer financial products, others facilitate data sharing or accelerate the launch of new solutions.
Banking as a Service
BaaS provides the financial and regulatory infrastructure businesses need to offer digital accounts, Pix, cards, foreign exchange, and payments through APIs. It is the layer responsible for processing transactions and moving funds.
This model is well suited to companies that want to build their own financial solution, giving them the flexibility to integrate these capabilities directly into their products.
Embedded Finance
Embedded Finance represents the experience delivered to the end customer. In this model, financial features are integrated into non-financial products, such as a marketplace with a digital wallet or a mobility app with built-in payments.
In most cases, this experience is powered by a Banking as a Service platform that handles the underlying financial operations.
Open Banking and Open Finance
Open Banking and Open Finance enable the sharing of financial data between institutions with the customer's authorization. This increases interoperability across the financial system and enables more personalized products and services.
Unlike BaaS, Open Finance does not process payments or move funds. Its role is to facilitate the exchange of information between institutions, while BaaS handles the execution of transactions.
White-Label Banking
White-label banking allows companies to launch a financial app under their own brand and visual identity using a largely ready-made solution. Implementation is typically faster, but companies have less flexibility to customize the customer experience or develop specific features.
In short, BaaS provides the operational foundation, Embedded Finance represents the customer experience, Open Finance enables data sharing, and white-label banking allows companies to launch a financial product faster.
Although they serve different purposes, these models are complementary and can be used together to meet the needs of different businesses.
BaaS vs. Building Your Own Banking Infrastructure
To offer financial services, a company can take one of two approaches: build its own infrastructure and obtain the necessary licenses and authorizations, or use the infrastructure provided by a Banking as a Service (BaaS) provider.
The right choice depends on the company's goals. However, for many businesses, BaaS significantly reduces implementation time, upfront investment, and operational complexity.
The Challenges of Building Your Own Infrastructure
Operating independently in Brazil requires authorization from the Central Bank of Brazil and compliance with a range of regulatory requirements. In addition to the time required to obtain these approvals, a company needs specialized teams and must maintain ongoing compliance, risk management, and anti-money laundering processes.
Building a financial infrastructure in-house also requires significant technology investments. This includes implementing a core banking system, integrating with payment systems, deploying security and transaction-monitoring mechanisms, and continuously maintaining the platform.
This helps explain why many companies choose Banking as a Service: they can leverage an already licensed infrastructure to accelerate the launch of financial services while reducing operational complexity.
The Benefits of Banking as a Service
By using an already licensed infrastructure, a company eliminates much of the technical and regulatory complexity involved in offering financial services. Instead of building the entire operation from scratch, it can integrate the APIs provided by a specialized partner.
This model reduces time to market, allowing companies to launch new products in weeks or months rather than years. It also replaces large upfront investments with a more scalable model that can grow alongside the business.
Another benefit is greater operational efficiency. By centralizing processes such as settlement, reconciliation, payment routing, and orchestration on a single platform, companies can reduce manual processes, simplify financial management, and improve operational efficiency.
This allows teams to focus their efforts on product development and business strategy while a specialized partner manages the underlying financial infrastructure.
Industries That Use BaaS
BaaS is used by companies that need to embed financial services without building their own banking infrastructure. Common use cases include:
Fintechs
Offer digital accounts, Pix, cards, and other financial services without building their own regulatory infrastructure.
PSPs, Payment Gateways, and Payment Aggregators
Process transactions, automate settlements, and centralize financial management for customers and merchants.
Marketplaces and E-commerce Platforms
Offer digital accounts, automate payouts to sellers, and integrate payment methods into the customer journey.
Betting Platforms
Integrate Pix deposits and instant withdrawals into their platforms while complying with Brazilian regulations.
Exchanges and Digital Asset Platforms
Connect the traditional financial system with the digital asset market through BRL accounts, Pix, deposits, and withdrawals.
Wallets and Financial Apps
Embed banking capabilities into the customer experience through outsourced financial infrastructure.
Mobility and Logistics Companies
Make real-time payments to drivers, delivery workers, and other partners without being limited by traditional banking hours.
Payroll Platforms
Automate salary, benefits, and other financial payments.
International Trade and Cross-Border Payments Companies
Centralize collections, payments, and foreign exchange operations on a single platform, simplifying international transactions, speeding up supplier payments, and reducing operational costs.
Regardless of the industry, BaaS enables companies to embed financial services faster, reduce operational complexity, and scale their businesses without building their own financial infrastructure.
What Should You Look for in a BaaS Provider?
Choosing a Banking as a Service provider involves more than comparing features and pricing. Because this infrastructure processes third-party funds, factors such as regulatory compliance, security, and operational stability should be carefully evaluated.
This became even more important in 2025, when the Central Bank of Brazil published Resolution CMN/BCB No. 16/2025, Brazil's first regulatory framework specifically focused on the BaaS model. Until then, applicable requirements were derived from other financial system regulations.
The resolution establishes requirements related to governance, risk management, cybersecurity, and contractual transparency between providers and their business customers. It also establishes a minimum capital requirement of R$19.9 million for authorized providers, raising the bar for the market and reinforcing the importance of choosing partners with a strong compliance structure.
Key criteria for evaluating a BaaS provider include:
Licensing and regulatory compliance of the institution responsible for the infrastructure
AML (Anti-Money Laundering) and KYC (Know Your Customer) processes
Well-structured documentation and APIs to facilitate technical integration
A sandbox environment for testing integrations before going live
Availability and settlement SLAs to ensure operational predictability
The ability to scale transaction volumes as the business grows
Specialized technical support with responsive assistance when incidents occur
Additional services, such as foreign exchange and international payments, if they are part of the company's roadmap
How to Choose a Banking Infrastructure Partner
Banking as a Service accelerates the launch of financial services while reducing technical and regulatory complexity. That's why choosing the right provider is critical to ensuring security, scalability, and operational efficiency.
Transfero offers a Banking as a Service solution that enables businesses to integrate BRL accounts, Pix, bank transfers, international payments, and foreign exchange through APIs, all within a single platform.
Want to learn how this solution can centralize financial operations, simplify payment management, and accelerate the launch of new services? Talk to our sales team.
