Saas vs BaaS vs Software License: which way to go

Are you new to software development in the Fintech industry? For any newbie or serious marketer, our guide to software license , Banking as a Service (BaaS) , and Software as a service (Saas) will be helpful, when making up a decision.

BaaS is an end-to-end platform to successfully operate in the Fintech world. It is a single point of entry for technical and business-related solutions. BaaS means that your business will get a ready-made technical and business solution from a single service provider. There will be no need to acquire new service partners (e.g., Forex exchange, acquirers, issuers, Anti-Money Laundering (AML), etc.) to set up your own platform.

SaaS means that the system and software are deployed on the vendor’s side and you can access it via the Internet using a web browser. In comparison with BaaS, SaaS offers connection to technical solution only.

Another option how to start a business is to purchase fintech software license . This solution is deployed within the client’s infrastructure and may be customized according to the specific client needs.

Before making any decision, we suggest asking providers the following questions:


There are many different solutions and platforms, but first, you should think of flexibility the new platform will provide. The high degree of flexibility and scalability means that the solution can be customized and adjusted to individual needs in the future. When it comes to SaaS/BaaS, it is an out-of-box solution. You just have to pay-as-you-go to get certain functionalities and ready-to-use gateways. When implementing this solution, clients need to be aware of the fact that this kind of platform is difficult to customize. For example, the client decides to upgrade or make changes in payment functionality, but it is very likely that the existing solution may not support them or changes will be available in a year.

In turn, the software license solution is usually more customer-oriented and can be easily customized in the future according to precise customer requirements. However, in the case of all 3 models, it is important to ask the service or software provider before making a purchase. Because sometimes it isn’t about the model, but about the provider or solution functionality and flexibility. It depends on how open the solution or service is. Keep in mind that your business will grow, and you will need a solution that serves more customers, partners and gateways.

Cost-effectiveness and budgeting

The first thing you need to do is to calculate the necessary investments for the first stage of the project. For businesses, which aren’t ready to invest in software, hardware and IT specialists at the very beginning, SaaS and BaaS are the most cost-effective ways to start a business and grow together with the platform. For SaaS and BaaS, you don’t need to allocate a huge budget for the initial phase. Usually, you will need to pay a setup fee and a monthly fee for running the system. It means that you will get the picture how much the software part costs and budget accordingly, without worrying about hidden costs or fees.

BE AWARE: if SaaS is the most preferable model for your business now, keep in mind that after some period this model can become very disadvantageous. Together with increased number of transactions and customers, the cost of service can increase many times over. So, it will be a good time for a smooth transition to software license. In order not to continue to maintain an unprofitable business or to seek a new supplier for your new software solution, ask your existing SaaS provider if they offer a transition to software license solution.

Support and maintenance

For SaaS and BaaS solutions, day-to-day support and maintenance (including compliance) are usually included in the monthly fee. For software implemented internally, you will need to allocate an additional budget for these expenses.

Another important aspect any business has to consider is cost-effectiveness in a long-term setting. You should calculate potential expenses for the next 2-3 years. Monthly fees of SaaS and BaaS services are usually linked to the number of clients and the volume of transactions. The bigger is the quantity – the higher is the price. The fees for the next 2-3 years might be higher than the cost of purchasing ready-made software. It isn’t a cost-effective strategy to use SaaS and BaaS for a long period of time or for a potentially huge customer base or transaction volume.

BE AWARE: Sometimes the monthly fee for the next 2-3 months for a solution powered by one provider can cost the same price you pay for ready-to-use software implemented at your side from another provider.

IT knowledge

SaaS and BaaS are the most popular choices for businesses that are looking to create a unique application without investing a fortune in software and undertaking all the responsibility.

From all the solution available on the market, SaaS solutions offer the simplest and fastest setup. These solutions don’t require recruiting experienced software developers for the in-house environment.

Once you contract a SaaS or BaaS service provider, you usually get detailed instructions on the integration stage. For implementing software and its license onsite, you will need an experienced IT team for both the implementation and support stages.


For BaaS and SaaS, all the data are hosted on a remote server powered by the service provider. Probably your first thought is that it might expose you to higher security risks in comparison to SW licenses. There are the reasons why this might not be true. You just need to evaluate your provider and the security of your technical infrastructure. A recently established company cannot provide the same level of security as a major service provider that has worked for many years to develop a secure infrastructure. The question is how trusted your provider is? Are you able to provide security that is equal or even higher than the security level of the system offered by the selected service provider?

BE AWARE: For SaaS and BaaS solutions, security and compliance support as well as maintenance are usually included in the costs of the service. In the case of a SW license – all the responsibilities for the storage, maintenance and other activities related to security (e.g., both IT staff and costs) are on a Customer side.


SaaS and BaaS win this game. These solutions are fast and easy to implement. As we all know, the Fintech world is evolving quickly and this is why this argument is critical, when setting up a new system. Very often, postponing deadlines brings more problems and the money and time lost will never come back.

On top of that, BaaS offers an exclusive option to connect to different partners with one simple step. Actually, it is in hands of the service provider. As a result, it will reduce the time necessary to access and enable collaborations across the business infrastructure. If you are looking to set up a business in a short period of time, then it will be so much easier to implement the SaaS or BaaS model.

There are many arguments, pros and cons of every model, therefore you need to carefully evaluate your business needs before making a decision to connect BaaS or SaaS or even implement software in-house. If you are worried about getting things wrong, get advice from an expert! This is when we, Advapay, can make a difference and help you put in place the software model that best suits your needs.