WaaS for Finance: How Banks and Retailers Can Leverage Wallet-as-a-Service? by@walletfactory

WaaS for Finance: How Banks and Retailers Can Leverage Wallet-as-a-Service?

Wallet-as-a-Service (WaaS) concept and advantages for financial enterprises are still underappreciated. Unlike SaaS or BaaS, this approach is more of a business-first nature, with laser-focus on end customer needs. See what WaaS can give financial businesses.
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Wallet Factory

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We are living in unprecedented yet great times, with lots of new trends and concepts, appearing every day. The world of Finance is no exception.

The Wallet-as-a-Service (WaaS) concept and its advantages for financial enterprises are still underappreciated, even though the SaaS (Software-as-a-Service) business model has become a mainstay for corporations. This article aims to clarify the benefits of utilizing WaaS as new revenue streams for banks, growing mobile wallet operators, telecoms, and large retailers.

FinTech primer: WaaS, BaaS, SaaS

Confusing technical jargon is a constant problem. SaaS appears to be the phrase most frequently used to describe cloud-based services. The global market for SaaS is expected to reach about $146 billion in 2021, according to Statista. SaaS refers to the provision of any form of mobile or online application, making it accessible to users as a subscription-based service.

Let's look at why SaaS as a concept is no longer sufficient when it comes to elaborating on the digitalization of financial services. The scope of software-driven services provided to enterprises under the SaaS model is growing quite large and diverse, and this is the only real explanation. Currently, the word "SaaS" is used as a catch-all for more commercially focused strategies.

Also, some countries across the pond tend to use BaaS (Bank-as-a-Service) instead of WaaS. As the name implies, however, this approach is more of a bank-centered than business-first nature. What’s more, some of their service packs might look excessive, especially for emerging markets. Market players like wallet operators, chain retailers, and telecom providers are not oftentimes going to assume bank functions. All they need is to ensure open digital access to their financial services for merchants and end customers.

For most developing countries with vast underbanked communities, electronic wallets mean way more when it comes to having digital financial services on their smartphones. As our key countries of operation are in such emerging regions as LatAm, MENA, and Southeast Asia, WaaS seems to be a way more suitable word for digital financial services. According to Forbes, what most business clients actually expect from WaaS is creating new customer-first channels that are capable to accelerate financial inclusion in their region.

The WaaS model actually appeared to address the ever-growing needs of various financial companies that want to have reliable ready-to-use digital services at scale. But before going any further, let’s see what a WaaS business model is.


Wallet-as-a-Service: Where and how to use the model

Giving digital financial services a name that is relatively new may sound a bit weird to those who are not familiar with it. WaaS, however, is not a brand-new concept for the financial sector.

The decision to widespread the term was partially influenced by the many client inquiries we have been getting lately. Our team considered this demand as we responded to it and came to the conclusion that WaaS is a wonderful fit for what we do as a FinTech business. Although it is right to speak your clients' language, those who are less tech-savvy may want a more thorough explanation.

What’s inside: The product range of WaaS

WaaS is essentially a business strategy that enables organizations to digitalize their value chain of business operations through the scaled integration of numerous digital financial services. Compared to traditional out-of-the-box software suites, the WaaS delivery paradigm enables financial organizations to swiftly and effectively launch any B2B or B2C finance projects online.

  • eWallets
  • Digital cards
  • mPOS for payment acceptance
  • Cloud-based rewards programs
  • Built-in loans management tools
  • In-app mobile gifts and vouchers
  • And many other online payment services can be included in Wallet-as-a-Service, depending on the FinTech provider.

With all this, businesses do not require to choose all the WaaS offerings. Financial firms can only choose the services that are popular with their consumers based on their unique business demands. Furthermore, WaaS is a great approach to integrate digital services into your existing infrastructure or launch a new financial wallet business from scratch. The model can be useful for new businesses exploring the market for digital services. It enables more customer-focused channels for conventional financial institutions to connect with new consumers across new digital channels.

The benefits of WaaS for financial businesses

WaaS is a great way to launch an online-first finance service for a variety of reasons. In the first place, there is no need to spend a lot of money on software that might not seem to work with your company's infrastructure. WaaS allows you to take the pay-as-you-grow strategy, which is more cost efficient. Until you decide to scale up, you may easily add more services of your choice and pay a set amount.

I'd like to point out the following characteristics as some of the most beneficial opportunities the WaaS delivery model presents to financial businesses:

  • Simple to launch. WaaS, as I've already mentioned, is a fantastic method to go digital with blazing-fast go-to-market rates.
  • White label. Any ready-made software typically goes with its brand name, giving you fewer opportunities to advertise your own company as such. In contrast, it would take a fair amount of time to build, for example, a web or mobile eWallet software from scratch if you choose to work with an outsourced team. WaaS excels in this area as well.
  • Service assortment and personalization. As was already indicated, you are able to select only one or multiple WaaS alternatives to test their effectiveness in your particular industry. In contrast to working with software that comes out of the box, installing additional services while in use is no longer problematic.
  • KYC compliance. In terms of compliance, it is difficult for ready-made software with a set architecture to adhere to local rules and regulations. When it comes to following different local compliance rules and policies, service-based models have far greater flexibility.

Key use cases of the WaaS delivery model

Here are at least four typical use cases for WaaS that can demonstrate its enormous potential as it opens up several business options for the financial sector. Bluntly put, WaaS makes it easier for your business growth strategy efforts to reach more clients who prefer digital transactions.

  1. Providing online access to cashless transactions and other financial services for your customers and merchants.
  2. Launching a neobanking startup with market-ready mobile eWallet and online payment apps for any financial service, which are accessible to wallet operators, agents, retailers, and end users.
  3. Using business and customer apps to implement customer and merchant rewards and gifts programs to stimulate engagement and retention.
  4. Utilizing secure tokenization processes to digitalize proprietary cards will enhance the user experience with your financial services.

Final thought

All the market players in the financial industry, including wallet operators, telcos, banks, and chain merchants, can have access to powerful tools for digital transformation thanks to the WaaS delivery model. WaaS is a superb option for local firms because it is way simpler to set up and less expensive than ready-made software systems. Your financial organization can use WaaS while operating in emerging regions to:

  • Install your own online payment infrastructure
  • Strengthen customer engagement, retention, and loyalty
  • Make your customer base a consistent revenue stream
  • And much more.

So, if you are a forward-thinking bank or wallet operator—it’s never too late to go digital.

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