Payment as a Service: the model that is redefining the payments market

As the number of users of digital financial services increases, making the digital payment process more efficient and user-friendly is fundamental for companies in the sector that want to remain competitive. It is against this backdrop that Payment as a Service (PaaS) has arisen; it is a model that allows organizations to easily integrate payment solutions, offering a means of payment as a product in and of itself.

By allowing companies to offer their clients advanced payment services and products – that is, going beyond physical money and debit and credit cards – by means of a ready-made solution, the PaaS model has advantages such as reducing the cost of investing in internal development. There are also benefits for the other end of the relationship: the end user.

A report published by Grand View Research states that the main factors driving growth in the Payment as a Service Market include optimized client experience, with fast and secure means of payment .

Also according to the study, the global PaaS market is expected to have a compound annual growth rate of 15,2% between 2023 and 2030, from the current US$ 17 billion to $ 45,8 billion by 2030This article will delve PaaS, explaining the benefits and impacts on the financial market.

What is Payment as a Service?

Payment as a Service, or simply PaaS, refers to a solution already developed by a provider that may be purchased by companies that wish to offer a means of payment as their own white label product without having to develop a project internally from zero.

That is, Payment as a Service allows a third party to offer complete solutions for processing payments to other organizations. And since in this type of a contract payments are made according to the financial transactions performed, we say that the technology is provided “as a service”.

In addition to saving time and resources, this model provides access to technology and expertise that many organizations might not have internally.

Read also | White label digital bank: 5 advantages for your business

Examples of Payment as a Service

As this is a ready-made solution that does not require internal development, Payment as a Service is a great option for companies that are not part of the financial universe, but that wish to offer products and services in the financial segment.

PaaS might also be an interesting alternative for institutions that work in the financial arena and want to expand their portfolio of products, but don’t have the expertise to develop new solutions.

Among the practical examples for using PaaS are the so-called transparent checkout in virtual stores, which is when payment is finalized on the same page as the e-commerce transaction, without having to be redirected. That functionality provides a better purchasing experience and makes the client feel more secure when inputting their payment information and concluding the operation.

Another example in the same checkout context is the possibility of offering payment with Pix using the Pix Checkout tool. The functionality offered by Dock allows clients to make online or in-person purchases easily, instantly, and securely.

Dock handles the entire technological piece, allowing transactions to be approved in just a few seconds, and funds from sales to be received within the hour. Additionally, with this solution the financial flow is completely automated and integrated into the client’s accounts.

Read also | White label credit card: what are the advantages for companies?

The benefits of PaaS

Payment as a Service has a series of advantages that directly impact the companies choosing this approach. For example:

• Low cost to develop products and services: the model reduces the expenses associated with developing and maintaining own payment systems, in addition to eliminating the need to handle regulatory and compliance matters, which will be handled by the solution provider.
• Fast implementation: since it isn’t necessary to develop a product from zero, the time to market is much more agile. Consequently, companies that use PaaS can create more innovative products and services.
• Profitability with an expanded portfolio: PaaS allows a more diverse offering of products, representing an additional source of revenue for companies.
• Increased competitiveness: by providing personalized financial services companies can attract and gain the loyalty of more clients, strengthening the brand.

Universe as a Service: where Payment as a Service is located

As we saw, the term “as a service” is a business model that offers solutions as a service and not as an inflexible and limited product. This is the case of Innovation as a Service. Acquiring as a Service and Fintech as a Service.

Payment as a Service, for example, means that instead of acquiring and managing assets and financial infrastructure internally, companies can contract these services from specialized providers..

This dynamic is only possible because of the API system, a group of programming methods that allows connections to be made among different systems.

Simply, APIs function like a bridge that allows one application to communicate with another. Therefore, APIs are fundamental when we talk about offering products as a service, because they allow communication and interaction among the different components of the solution.

In this scenario, Banking as a Service is a well-known API-based solution in the financial markets. However, from capture to transaction processing, including the bureaucratic aspects of businesses, there are many other options available, such a Payment as a Service.

Payment as a Service and Banking as a service: what is the difference?

If you are more familiar with the “as a service” financial universe, maybe you’re asking yourself what the difference is between Banking as a Service and Payment as a Service. Both allow companies to offer fast integration of financial products and services.

However, while BaaS is a solution that allows any company or institution to have their own bank, with its brand and business model, offering a complete financial experience to its users, PaaS focuses specifically on payment services, PaaS focuses specifically on payment services.

In summary, Banking as a Service offers a wider range of services, including accounts and loans, while Payment as a Service is more specific, serving businesses that would like to offer their own payment solutions.

Expanding Payment as a Service: Dock’s BaaS has a complete solution for your business

Dock is a pioneer in Banking as a Service in Brazil and Latin America, and has a complete Bankingsolution through Dock One, a unique Banking and Payments platform that companies can use to easily scale their financial transactions anywhere in the world.

Through this platform, users are offered the experience of a complete digital accounts , quickly and securely,, including:

• Bill payment;
• Instant payment;
• Transfers;
• Invoice generation;
• Recharges and vouchers;
• Personal loans;
• Remunerated accounts.

In addition to providing the platform, Dock is also responsible for treasury management, processing and monitoring transactions, and authorizing settlements. Since everything is integrated into the solution, you don’t need to worry about opening payment accounts, processing transactions, or meeting regulatory requirements.

And to guarantee the security of transactions, in addition to providing digital onboarding of clients (with KYC, biometry , etc.), managing payment accounts (debit and credit ledger), and API gateways with public and complete documentation, Dock also has anti-fraud systems in in place for every transaction.

With Dock, banks, fintechsand companies from other segments ( retail, agribusiness, telecommunications, e-commerce, transporters, direct saleetc) can unlock the potential of their businesses and accelerate their innovation cycle.

Find out more about our Digital Banking solution:

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Payment as a Service: what you saw in this article

• Making the digital payment process more efficient and friendly for the consumer is fundamental for companies that want to remain competitive.
• Payment as a Service (PaaS) is a model that allows organizations to offer a means of payment as their own product, without high investment in internal development costs.
• An optimized client experience with fast and secure payment methods are some of the factors driving growth of the Payment as a Service market.
• Transparent checkout, a functionality that keeps the consumer on the store’s virtual site when finalizing a purchase, is one of the examples of how PaaS is used.
• Companies that use Payment as a Service obtain benefits such as low costs when creating products and services, agility when launching, increased competitiveness, and client loyalty.
• Although PaaS is restricted to payment services, Banking as a Service allows any company or institution to have their own bank that uses their brand, providing a complete financial experience to their users.
• Dock is a pioneer in Banking as a Service in Latin America, and has a complete Banking solution through Dock One, a unique Banking and Payments platform that allows companies to easily scale their financial transactions anywhere in the world.

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