Land and Expand BaaS Strategy
Andy Su, co-founder of Pry, on how fintechs choose the right BaaS partners
This is a land and expand view of BaaS, where the first goal is proving card usage and customer pull, not optimizing the banking stack. For an early product like Pry, the bottleneck is getting a card program live in weeks, seeing whether customers actually issue and use vendor specific virtual cards, and avoiding heavy KYC steps that slow onboarding. A direct sponsor bank relationship matters later, once volume is large enough for better economics to justify the extra complexity.
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Pry wanted card issuing mainly to make bookkeeping and budgeting more concrete. The workflow was, set a budget for a vendor, issue a dedicated virtual card for that vendor, then let spend flow back into the books cleanly. That makes speed and easy card setup more valuable than bank level optimization at the start.
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The money reason to add a sponsor bank shows up only after scale. In B2B card programs, interchange can be about 2.5% of spend, and as volume grows the sponsor bank take can compress while more economics shift to the fintech and platform. That is why founders wait until they have real transaction volume before renegotiating the stack.
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This matches how newer BaaS platforms ramp customers. Synctera described onboarding small startups first so bugs are found with 10 users, not 150,000, and said there are more fintech and embedded finance ideas than available bank homes. In practice, bank relationships become a scaling constraint after product fit, not before it.
The next step in this market is a split between fast launch infrastructure for early embedded finance products, and bank connected setups for companies with proven volume. As more software companies add cards, accounts, and payouts, the winners will be the ones that can move customers from prototype to scaled bank partnership without forcing them to rebuild the product experience.