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Partnerships between organizations end all the time. Sometimes it\u2019s amicable, and sometimes it\u2019s complicated. In the instance of Synapse and Evolve, it was complicated.<\/p>\n
Synapse operates a platform enabling banks and fintech companies to easily develop financial services. It was providing those types of services as an intermediary between banking partner Evolve Bank & Trust and business banking startup Mercury.<\/p>\n
When Evolve and Mercury decided to end their respective relationships with Synapse and work directly with each other, each entity had concerns that they were working through, according to the companies. Private conversations between Evolve and Synapse became public knowledge in a lengthy Fintech Business Weekly post<\/a> from Oct. 8 that claimed the companies were at odds with each as the relationship was winding down.<\/p>\n Included in the allegations laid out in the post, Jason Mikula reported that the entities are blaming each other \u201cover who was responsible for a \u201cdeficit\u201d of over $13 million in \u201cfor benefit of\u201d accounts holding customer funds at Evolve, among myriad other issues\u201d going back at least three years. Neither company addressed this or commented on this allegation when asked directly.<\/p>\n Mikula\u2019s post also focused on, among other things, a letter that Synapse reportedly sent to Evolve on September 27 alleging that Evolve made an error that resulted in \u201cinappropriate debits from customer funds.\u201d<\/p>\n Sankaet Pathak, founder and CEO of banking-as-a-service platform Synapse, wrote in a Medium post<\/a> Friday that this communication between Synapse and its banking partner (Evolve is not mentioned by name) reported on was \u201cintended to be a candid exchange of thoughts\u201d and \u201cnever meant for public eyes.\u201d<\/p>\n Pathak wrote that the letter was actually meant to \u201cprovide a clear articulation of our stance on certain matters\u201d and find resolutions related to ongoing discussions Synapse was having with its banking partner.<\/p>\n He highlighted four items within that communication, including bank charges Pathak wrote \u201cshould not have occurred,\u201d instances of underpayments, rebate revenue withholding and challenges Synapse was having with the reconciliation process.<\/p>\n With regard to the revenue withholding in particular, Pathak wrote that \u201cwe firmly believe that this issue has not only impacted our partnership but has also had adverse effects on our valued fintech customers.\u201d<\/p>\n For the reconciliations, Pathak wrote that Synapse was asking for \u201cincreased attention and resources.\u201d The company did not directly respond to requests for comment.<\/p>\nWhat Synapse says<\/h2>\n