BaaS versus getting your own licence: cost, time and obligations
Two routes to offering accounts: rent regulated infrastructure, or become the regulated institution. What each actually demands, and when each makes sense.
There are two ways for a platform to put a bank account in front of its users. Rent regulated infrastructure through a Banking-as-a-Service programme, or become the regulated institution yourself. Most teams ask the question the wrong way round, as a cost comparison, when it is really a comparison of obligations.
What each route actually is
Under a BaaS programme, a licensed institution holds the permissions, the safeguarding arrangements and the client contract for the accounts. You hold the brand, the interface and the customer relationship, and integrate over an API. Under your own licence, all of that sits with you: capital requirements, governance, reporting, a compliance function with named individuals, and direct supervision by a regulator.
Time
A licence application in the EU is measured in quarters, not weeks, and the clock does not start until the file is complete. A BaaS programme is measured by how long diligence and contracting take. Integration is rarely the bottleneck in either case; the paperwork is.
Cost shape, not cost level
The two routes have different cost shapes. A licence is heavy upfront and then largely fixed: capital, people, audit, systems. A programme is light upfront and then variable: setup, recurring platform fees, per-transaction pricing and a monthly minimum. Fixed costs get cheaper per unit as you scale; variable costs do not, which is why the crossover exists at all.
There is no universal volume at which the crossover happens. It depends on your transaction mix, how much of your revenue is FX margin, and whether you need capabilities the programme cannot give you. Model the programme side properly before you guess: the BaaS revenue model gives you the earning side of the equation on your own pricing.
Obligations you keep either way
- Onboarding standards for your users, to the partner's rulebook or the regulator's.
- Transaction monitoring, and the operational capacity to act on it.
- Complaints, disputes and the audit trail behind both.
- Evidence that your model does what your application said it does.
The difference is who you answer to. Under a programme you answer to the partner's risk team, who can restrict or exit. Under your own licence you answer to a supervisor, who can do considerably more.
When each makes sense
A programme makes sense when banking is a feature of your product rather than the product itself, when time to market matters, and when you want the option to change partners later. Your own licence makes sense when the economics of the flow are the business, when you need product control a partner will not give you, or when the licence itself is the moat.
Most platforms run a programme first and revisit the question once the volume is real and the model is proven. That order is usually cheaper than the reverse.
Next
Related reading: what BaaS actually costs, and why nobody publishes a price and embedded finance versus Banking-as-a-Service.
Written and reviewed by the Crosswire advisory team, which designs and places Banking-as-a-Service programmes for platforms in Europe. Reviewed 15 August 2026.
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Published by Crosswire - financial infrastructure for the businesses others won't bank.