Fintech Nexus Newsletter (May 23, 2024): A Fintech Mess: Synapse, Evolve and locked customer funds
The slow-moving dumpster fire that is the Synapse-Evolve meltdown has turned into a nightmare for many fintech customers.
Synapse acted as a middleman between banks and fintechs, but there have been several disagreements between Synapse and these banks and fintechs. Consumers who assumed their money was safe are caught in the middle.
Synapse had contracts with 20 banks and around 100 fintechs with a total of 10 million end users. Many of these end users have been locked out from accessing their funds.
There are multiple stories of consumers with tens of thousands of dollars that they are unable to access. The money does not appear to be gone, only frozen in place, while Synapse works out its differences with one of its largest bank partners, Evolve Bank & Trust.
Hearings in Synapse’s bankruptcy case have been ongoing this week in California as the judge tries to understand a complex and messy situation.
It is not a good look for banking-as-a-service and for fintech in general. This needs to be resolved quickly, or we can expect policymakers to step in.
Featured
> Fintech nightmare: ‘I have nearly $38,000 tied up’ after Synapse bankruptcy
Synapse is a middle man between customer-facing fintech brands and FDIC-backed banks, but it has had disagreements about how much in customer balances it owed.
From Fintech Nexus
>Fintech’s future predicted in Team8 report
By Tony Zerucha
A Team8 report charts the industry’s path by predicting what remains and changes while taking a few big swings at potential mega-trends.
> Aplazo bags $45B from QED investors to expand BNPL in Mexico
By David Feliba
Mexican fintech Aplazo concluded its Series B funding round, securing $70 million, with an additional $45 million in new equity financing.
Podcast
Brendan Carroll, Co-Founder & Senior Partner of Victory Park Capital, on the growth of private credit
The Co-Founder of Victory Park takes us through the history of asset backed lending, how the industry has grown, and what…
Editorial Cartoon
Webinar
Instant payments orchestration: an essential tool now for lending and factoring
Jun 5, 2pm EDT
In today’s on-demand economy, instant payments are moving from a nice-to-have to a must-have. In the small business space,…
Also Making News
- USA: Varo Bank faces lawsuit over March data breach
The lawsuit accuses the online bank of failing to protect personal information stored within its network, including customer phone numbers and the last four digits of Social Security numbers.
- USA: Freelancers See Instant Payments as Financial Lifeline
Being a freelancer requires constantly drumming up work while hoping for prompt payment. Moreover, consumers who work freelance, contract or consulting rely on disbursement payments for part, if not all, of their income. Failure to receive timely payment can lead to financial strain. Instant payments can relieve this for freelancers.
- USA: Winning When Customers Win: Transforming Consumer Finance
LendingClub CEO Scott Sanborn discusses the company’s transformation since acquiring Radius Bank in 2021, the strategies they’re employing to navigate a challenging economic environment and their vision for leveraging technology and data to redefine consumer banking.
- UK: Zopa enters renewable energy market
Zopa Bank has entered the UK’s £23 billion renewable energy market, making its suite of buy now, pay later and retail finance products available to Octopus Energy customers across the country.
To sponsor our newsletters and reach 180,000 fintech enthusiasts with your message, contact us here.
