Modular Card Issuing vs BaaS
Bo Jiang, co-founder and CEO of Lithic, on the key primitives in card issuing
The real dividing line is control. A BaaS platform is built to get a fintech live fast by bundling the bank relationship, compliance workflows, and processor choices into one package, while a modular issuer like Lithic fits companies that want to choose each layer themselves, from KYC to ACH to transaction monitoring, and change those pieces as their product gets more complex.
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In practice, all in one BaaS often sits between the fintech and the bank, acting as program manager and handling compliance, operations, and vendor orchestration. That is useful for a neobank that wants a faster launch and less direct bank work, but it also means accepting the provider’s defaults and roadmap.
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Lithic’s pitch is that card issuing is only one part of the stack, so a scaling company may want Lithic for issuing, Sila for ACH and ledgering, and another provider for identity or fraud. That setup takes more work up front, but it gives more room to support unusual use cases and swap vendors later.
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This is also why Lithic describes Marqeta as closer to older enterprise issuer processors, and BaaS as a different category again. Marqeta proved API based issuing at scale with large customers like Cash App, while BaaS providers broadened the bundle to accounts, money movement, and bank access for customers that want one roof.
Going forward, the market keeps splitting in two. Smaller and earlier fintechs will keep choosing bundled platforms for speed, while larger programs will unbundle as card controls, compliance rules, and product edge cases become too important to leave inside one vendor’s box. That shift favors issuer processors and interoperable partners that can plug into many BaaS stacks.