Scale Determines BaaS Cashback Economics
Andy Su, co-founder of Pry, on how fintechs choose the right BaaS partners
The real issue is not a missing 50 basis points, it is who in the stack has enough scale to give that value back to the customer. In B2B cards, commercial interchange is roughly 2.5%, and as volume grows the sponsor bank and infrastructure layers get squeezed while the fintech at the top keeps more of the economics. That is why a smaller product like Pry worries about looking overpriced next to Ramp’s richer cashback offer, even if the difference is mostly upstream bargaining power rather than extra margin kept by Pry.
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Pry’s target is very explicit. It wants to pass through 1.5% cashback, keep about 0.1%, and leave about 0.9% for the BaaS provider and bank. That makes cashback a visible test of whether its partner stack is cheap enough, not just a marketing perk.
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The usual B2B split leaves the fintech with about 1.05% and the BaaS provider with about 0.5%, after the card network and bank take their cuts. At scale, bank fees can fall to 2 to 3 basis points, which is why bigger programs can afford better end user rewards.
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Ramp shows what scale does in practice. It built around card and expense first, with interchange of about 1.6% of TPV, then added bill pay, procurement, travel, treasury, and SaaS pricing. That broader revenue base lets it use cashback and free software as acquisition tools in a way a smaller single product startup cannot.
Going forward, the winners in BaaS enabled cards will be the companies that turn scale into visibly better economics for the customer. As more fintechs bundle cards into software, cashback will keep moving from a nice feature to a pricing signal, and smaller players will either negotiate sharper partner terms or add more products so they are not judged on interchange alone.