Amid breakup, Synapse, Evolve address allegations about how their relationship ended
Reading Time: 3 minutesSynapse and Evolve Bank & Trust on Friday addressed a lengthy Fintech Business Weekly post from Oct. 8 that claimed the companies were at odds with each other after Evolve decided to end the relationship. Business banking startup Mercury, which was working with Evolve, also confirmed the termination of its relationship with Synapse.
In the post, Jason Mikula reported that the entities are blaming each other ‘over who was responsible for a ‘deficit’ of over $13 million in ‘for benefit of’ accounts holding customer funds at Evolve, among a myriad of other issues’ going back at least three years. Neither company addressed this or commented on this allegation when asked directly.
Mikula’s post focused on, among other things, a letter that Synapse reportedly sent to Evolve on Sept. 27 alleging that Evolve made an error that resulted in ‘inappropriate debits from customer funds.’
What Synapse says
Sankaet Pathak, founder and CEO of banking-as-a-service platform Synapse, wrote in a Medium post Friday that this communication between Synapse and its banking partner (Evolve is not mentioned by name) reported on was ‘intended to be a candid exchange of thoughts’ and ‘never meant for public eyes.’
Pathak wrote that the letter was actually meant to ‘provide a clear articulation of our stance on certain matters’ and find resolutions related to ongoing discussions Synapse was having with its banking partner.
He highlighted four items within that communication, including bank charges Pathak wrote ‘should not have occurred,’ instances of underpayments, rebate revenue withholding and challenges Synapse was having with the reconciliation process.
With regard to the revenue withholding in particular, Pathak wrote that ‘we firmly believe that this issue has not only impacted our partnership but has also had adverse effects on our valued fintech customers.’
For the reconciliations, Pathak wrote that Synapse was asking for ‘increased attention and resources.’ The company did not directly respond to requests for comment.
Meanwhile, this is all coming as Synapse confirmed on Oct. 6 that it made another round of layoffs, this time impacting 40% of its staff.
What Evolve says
In August 2022, Evolve had informed Synapse of its intentions to terminate the relationship, according to a person familiar with the matter, who was granted anonymity. The reason? Evolve wanted to work directly with Mercury rather than using Synapse as an intermediary, according to the source.
The institution did not address the alleged deficit noted in Mikula’s report, but rather focused on that it believed Synapse was given a proper amount of time to transition customers to a new banking partner.
‘Any suggestion, in media reports or otherwise, that these intermediary clients did not have sufficient time to prepare for a transition of customer accounts is inaccurate,’ according to the company.
Addressing the status of its relationship with Synapse, Evolve’s spokesperson wrote that there are ‘several inaccuracies in the media coverage’ including about the reconciliation process, which the company said it could not discuss due to ‘confidentiality obligations.’
What Mercury says
Mercury published its own post on X, dated Oct. 9, in which the startup confirmed that it no longer was working with Synapse following the reconciliation of customer funds it had with Evolve. ‘Importantly, no customer funds ever moved during this transition and all account numbers and routing numbers remain the same, although some customers received new debit cards,’ the company wrote.
What’s next
Meanwhile, Pathak’s Medium post said that Synapse intends to ‘actively and productively collaborate with our partner to resolve all the issues mentioned in the (Sept. 27) letter.’ Similarly, Evolve said its responsibility is to the end user depositor to protect their funds, adding, ‘we work closely and diligently with fintech platforms, who are required to perform reconciliations on a daily basis, and we proactively ensure that platforms have the right data and tools to assist with that process.’
Reference: https://techcrunch.com/2023/10/13/synapse-evolve-mercury-fintech/
Ref: techcrunch
MediaDownloader.net -> Free Online Video Downloader, Download Any Video From YouTube, VK, Vimeo, Twitter, Twitch, Tumblr, Tiktok, Telegram, TED, Streamable, Soundcloud, Snapchat, Share, Rumble, Reddit, PuhuTV, Pinterest, Periscope, Ok.ru, MxTakatak, Mixcloud, Mashable, LinkedIn, Likee, Kwai, Izlesene, Instagram, Imgur, IMDB, Ifunny, Gaana, Flickr, Febspot, Facebook, ESPN, Douyin, Dailymotion, Buzzfeed, BluTV, Blogger, Bitchute, Bilibili, Bandcamp, Akıllı, 9GAG