Banks Trade Interchange for Customers

This is the core bargain that makes BaaS work for sponsor banks. A small bank gives up part of interchange because the fintech is delivering depositors and card spend the bank would not win through branches, brand marketing, or its own product team. In practice, the bank keeps the charter relationship and deposit base, the fintech keeps most of the card economics, and the BaaS platform sits in the middle translating old bank systems into APIs and operations.

• In a typical B2B card payment with roughly 2.5% interchange, about 1.5% can flow to the fintech, leaving the remaining 1% to be shared by the BaaS provider, sponsor bank, card network, and other infrastructure. That split explains why fintechs often get the biggest share, they own the customer and create the volume.
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• This is especially attractive for banks under $10B in assets, because Durbin exempt sponsor banks can earn higher debit interchange than large banks. That gives them room to trade away some economics while still gaining low cost deposits and lending fuel from customers they otherwise would not reach.
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• As fintech programs scale, more bargaining power moves upward. Research across the BaaS market shows bank take rates can fall to just a few basis points at scale, while fintechs and sometimes BaaS providers capture more of the pool. The reward for the bank is not margin per swipe, it is distribution into new niches.
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Going forward, the winners in BaaS will be the platforms and banks that can turn this trade into a durable channel. The more banks treat fintechs as outsourced customer acquisition and balance sheet feeders, the more interchange will keep shifting upward to the fintech layer, while bank value concentrates in deposits, lending, and compliant access to the rails.