BaaS vs Open Banking: What's the Difference and Which Should You Choose?
Introduction: Two Concepts, Two Logics
BaaS and Open Banking are two terms that come up constantly in discussions about financial services modernization. Yet they refer to very different realities. The confusion is understandable: both rely on APIs, both aim to open up the banking system, and both are presented as pillars of modern fintech.
But confusing BaaS and Open Banking is like confusing a car manufacturer and a car rental service. One builds the vehicle, the other provides access to an existing vehicle. The distinction has concrete implications for any company looking to integrate financial services into its offering in Morocco.
This article clarifies the differences, explores how they complement each other, and helps you determine which one -- or both -- fits your project. If you are new to the topic of BaaS, we recommend reading our introduction to Banking as a Service first.
What is BaaS (Banking as a Service)?
Banking as a Service is a model in which a licensed financial institution makes its banking infrastructure available as APIs. Third-party companies -- fintechs, marketplaces, consumer applications -- can then integrate real financial services into their products without obtaining their own banking license.
How BaaS Works
The BaaS architecture rests on three layers:
- The regulatory layer: a payment institution or bank licensed by Bank Al-Maghrib holds the license and ensures regulatory compliance. In Morocco, Chari Money SA fulfills this role as a licensed payment institution.
- The infrastructure layer: core banking systems, connections to payment networks (Visa, Mastercard, CMI), KYC/KYB modules, account and card management.
- The API layer: a documented technical interface that allows partner companies to access all these services programmatically. See our API documentation for a concrete example.
What BaaS Enables You to Create
With a BaaS platform, a company can:
- Open payment accounts and electronic wallets for its users
- Issue bank cards -- physical or virtual -- under its own brand
- Process online payments directly from its application
- Manage money transfers, top-ups, and bill payments
The key point: BaaS creates new financial products. The partner company does not merely access data -- it offers real banking services to its end customers.
What is Open Banking?
Open Banking is a framework -- often regulatory -- that requires banks to share their customers' data (with consent) via standardized APIs. The goal is to open the banking ecosystem to new players to stimulate competition and innovation.
The Origins: PSD2 in Europe
The concept of Open Banking was formalized primarily by the European directive PSD2 (Payment Services Directive 2), which came into force in 2018. PSD2 introduced two types of third-party services:
- AISP (Account Information Service Provider): read access to a customer's bank accounts (balances, transaction history, account information). This enables, for example, aggregation applications that display all of a user's accounts in a single interface.
- PISP (Payment Initiation Service Provider): the ability to initiate a payment directly from a customer's bank account, without going through a card. This opens the door to alternative payment solutions.
What Open Banking Enables
Open Banking does not create new accounts or new cards. It provides access to existing accounts and services:
- Account aggregation: displaying balances and transactions from multiple banks in a single application
- Payment initiation: triggering a bank transfer from the customer's account to a merchant
- Credit scoring: analyzing a customer's financial history (with consent) to assess creditworthiness
- Personal financial management: categorizing expenses, detecting subscriptions, offering budgeting recommendations
Key Differences Between BaaS and Open Banking
To clearly understand the distinction, here is a structured comparison:
| Criteria | BaaS | Open Banking |
|---|---|---|
| Definition | Complete banking infrastructure via API | Access to existing banking data via API |
| Purpose | Create new financial products | Connect and leverage existing services |
| Data flow | Creation and management of accounts, cards, payments | Reading data and initiating payments on existing accounts |
| Provider | Licensed payment institution or bank | Bank holding the accounts (obliged by regulation) |
| License required for user | No (carried by the BaaS provider) | No for the company, but the AISP/PISP provider must be licensed |
| Concrete examples | White-label wallet, card issuing, payment processing | Account aggregator, transfer initiation, credit scoring |
| Value proposition | Launch financial services without a banking license | Enrich an offering with the customer's banking data |
| Regulatory framework in Morocco | Operational (licensed payment institutions) | Not yet formalized |
The fundamental difference is this: BaaS is a factory that builds financial products. Open Banking is a window that provides a view into existing financial products.
Complementarity: How BaaS and Open Banking Work Together
Despite their differences, BaaS and Open Banking are not in opposition. They complement each other, and their combination gives rise to what the industry calls embedded finance.
A Concrete Scenario
Consider an e-commerce marketplace in Morocco that wants to offer a complete financial experience to its merchants:
- Via BaaS: the marketplace creates an electronic wallet for each merchant, issues payment cards for their business expenses, and processes buyer payments through an integrated gateway.
- Via Open Banking (when available in Morocco): the marketplace aggregates the merchant's existing bank accounts to offer a consolidated view of their cash flow, and uses financial history to offer tailored cash advances.
BaaS provides the infrastructure to create services. Open Banking enriches these services with existing data.
The Convergence Toward Embedded Finance
Embedded finance represents the next step: non-financial companies integrating financial services directly into their user journey. A ride-hailing driver receiving earnings instantly in an in-app wallet. An e-commerce site offering installment payments at checkout. Accounting software that lets you pay suppliers with one click.
This convergence is only possible thanks to BaaS, which provides the underlying infrastructure. Open Banking, when available, will add an additional layer of intelligence by connecting these new services to users' existing banking data.
The State of Open Banking in Morocco
No Moroccan PSD2 Yet
Unlike Europe, the United Kingdom, or certain Middle Eastern countries, Morocco does not yet have a formal regulatory framework for Open Banking. There is no equivalent of PSD2 that would require Moroccan banks to open their APIs to third parties.
Bank Al-Maghrib's Work
Bank Al-Maghrib closely follows international developments in Open Banking. The regulator has engaged in discussions about modernizing payment infrastructure and digitizing financial services. Several areas to watch include:
- The national financial inclusion strategy, which could incorporate Open Banking components
- Discussions around payment system interoperability
- The regulatory framework for payment institutions, which has already paved the way for innovation through the BaaS model
The Current Landscape
In the absence of Open Banking regulation, banking data-sharing initiatives in Morocco remain limited and voluntary. Some banks offer APIs to their partners, but there is no common standard or data-sharing obligation.
It is precisely in this context that BaaS takes on its full importance in Morocco: it offers today what Open Banking promises for tomorrow, in terms of the ability to create and distribute financial services via API.
BaaS in Morocco Today
An Operational Regulatory Framework
Morocco has a mature regulatory framework for payment institutions, licensed and supervised by Bank Al-Maghrib. This framework allows players like Chari Money SA to offer a complete and compliant BaaS infrastructure.
What this means concretely: any Moroccan or international company wishing to launch financial services in Morocco can do so through a BaaS partner, without obtaining its own license. To understand the regulatory framework in detail, read our article on payment institutions in Morocco.
Services Available via API
Moroccan BaaS platforms today offer a comprehensive set of services:
- Accounts and wallets: opening payment accounts, balance management, transaction history
- Card issuing: virtual and physical cards, Visa or Mastercard programs, white-label customization
- Payments: online collection, P2P transfers, bill payment, mobile top-ups
- KYC/KYB: identity verification and onboarding compliant with regulatory requirements
- Agent network: cash-in and cash-out through physical points
For a complete view of available services, consult our API documentation.
Use Cases: When to Use BaaS, Open Banking, or Both
When to Use BaaS
BaaS is the right approach when you want to create new financial services:
- Launch a white-label wallet: your application, your brand, but real payment accounts behind it. See our guide on white-label wallets.
- Issue cards: prepaid cards for your employees, rechargeable loyalty cards, virtual cards for online purchases. Our article on bank card issuing details the technical process.
- Accept payments: integrate a payment solution directly into your application or website.
- Manage funds: store, transfer, and distribute money on behalf of your users.
When to Use Open Banking
Open Banking (when available in Morocco) is relevant for:
- Aggregating accounts: offering your customers a unified view of all their bank accounts
- Initiating payments: allowing your customers to pay directly from their bank account, without a card
- Assessing creditworthiness: analyzing a customer's financial history for a credit or financing decision
- Automating accounting: automatically retrieving bank transactions for reconciliation
When to Use Both
The BaaS + Open Banking combination is most powerful for platforms that want to offer a complete financial experience:
- Neobanks: creating accounts (BaaS) while aggregating external accounts (Open Banking)
- Financial management platforms: offering wallets and cards (BaaS) with a consolidated view of all cash flow (Open Banking)
- Marketplaces: managing financial flows (BaaS) and evaluating merchants for financing (Open Banking)
Embedded Finance: The Convergence Underway
Embedded finance is the natural result of BaaS maturity and the emergence of Open Banking. It represents a paradigm shift: financial services are no longer the exclusive domain of banks -- they become a feature that can be integrated into any application.
Trends in Morocco and Africa
Several factors are accelerating embedded finance adoption in Morocco:
- Mobile penetration: with over 35 million mobile subscribers, Morocco has a massive user base for mobile financial services
- Financial inclusion: a significant portion of the population remains underbanked, creating a market for alternative financial solutions distributed through non-banking applications
- The e-commerce ecosystem: the growth of online commerce creates demand for integrated payment solutions, merchant financing, and cash management
- The regulatory framework: Bank Al-Maghrib's licensing of payment institutions provides the legal foundation for the BaaS model
Concrete Examples of Embedded Finance
- Delivery applications: a built-in wallet for delivery drivers, with instant settlement and a payment card for business expenses
- SaaS platforms: management software that offers payment accounts and cards to its business clients
- Mobility applications: transport, parking, and toll payments from a single app with a unified wallet
- B2B marketplaces: supplier payment management, cash advances, and virtual cards for purchases
How ChariBaaS Can Help
ChariBaaS, the BaaS platform of Chari Money SA (a payment institution licensed by Bank Al-Maghrib), offers a complete infrastructure for integrating financial services into your application:
- Unified API: a single integration to access all services (accounts, cards, payments, KYC)
- Built-in compliance: the license and regulatory compliance are carried by Chari Money SA
- Open Banking ready: our API-first architecture is designed to adapt to future regulatory developments, including Open Banking when it is formalized in Morocco
- Technical support: comprehensive documentation, test sandbox, and dedicated technical team
Whether you want to launch a wallet, issue cards, or integrate online payments, ChariBaaS provides the infrastructure you need.
Contact our team to discuss your project and discover how BaaS can accelerate your embedded finance strategy.
FAQ
What is the difference between BaaS and Open Banking?
BaaS (Banking as a Service) provides complete banking infrastructure via API to create financial products (accounts, cards, payments). Open Banking gives access to existing banking data via API (balances, transactions, payment initiation). BaaS creates new services, Open Banking connects existing ones.
Does Open Banking exist in Morocco?
Morocco does not yet have formal Open Banking regulation like Europe's PSD2. However, Bank Al-Maghrib is working on a regulatory framework. In the meantime, BaaS through licensed payment institutions like Chari Money SA already provides complete banking APIs.
What is embedded finance?
Embedded finance means integrating financial services directly into non-financial applications. For example, an e-commerce site offering installment payments or a delivery app with a built-in wallet. BaaS is the infrastructure that makes this possible.
Do you need a license to use BaaS in Morocco?
No, the company using BaaS does not need its own banking license. It relies on the license of the partner payment institution (such as Chari Money SA, licensed by Bank Al-Maghrib). This is the main advantage of the BaaS model.
Frequently Asked Questions
- What is the difference between BaaS and Open Banking?
- BaaS (Banking as a Service) provides complete banking infrastructure via API to create financial products (accounts, cards, payments). Open Banking gives access to existing banking data via API (balances, transactions, payment initiation). BaaS creates new services, Open Banking connects existing ones.
- Does Open Banking exist in Morocco?
- Morocco does not yet have formal Open Banking regulation like Europe's PSD2. However, Bank Al-Maghrib is working on a regulatory framework. In the meantime, BaaS through licensed payment institutions like Chari Money SA already provides complete banking APIs.
- What is embedded finance?
- Embedded finance means integrating financial services directly into non-financial applications. For example, an e-commerce site offering installment payments or a delivery app with a built-in wallet. BaaS is the infrastructure that makes this possible.
- Do you need a license to use BaaS in Morocco?
- No, the company using BaaS does not need its own banking license. It relies on the license of the partner payment institution (such as Chari Money SA, licensed by Bank Al-Maghrib). This is the main advantage of the BaaS model.