Reports of major trouble back in 2020.[1]<p>Evolve, the bank that actually stores the money, says "Synapse’s abrupt shutdown of essential systems without notice and failure to provide necessary records needlessly jeopardized end users by hindering our ability to verify transactions, confirm end user balances, and comply with applicable law.".[2]<p>So much for "money as a service".<p>[1] <a href="https://www.forbes.com/sites/jeffkauflin/2020/04/01/broken-synapse-why-employees-and-customers-are-fleeing-this-andreessen-backed-fintech-startup/" rel="nofollow">https://www.forbes.com/sites/jeffkauflin/2020/04/01/broken-s...</a><p>[2] <a href="https://www.getevolved.com/about/evolve-responds-to-fridays-court-hearing/" rel="nofollow">https://www.getevolved.com/about/evolve-responds-to-fridays-...</a>
Are these US payment startups not regulated?<p>Here and unblock the EU payment systems are themselves regulated , distinctly from banks but along very similar lines. A big motivation for this was to avoid such failures.
So, there was a big failure of paperwork, but as the co-founder say, why is there a million dollar shortfall? Where did the money go?<p>I wonder if having fdic.gov basically say "beware of fintechs" is going to negatively impact the sector: <a href="https://www.fdic.gov/resources/consumers/consumer-news/2024-06.html" rel="nofollow">https://www.fdic.gov/resources/consumers/consumer-news/2024-...</a><p>Remember when Voyager said it was FDIC insured?
I don't think there's anything wrong in theory with digital-only banks but I just haven't found anyone I'm willing to give my money to. Maybe the first digital credit-union will get my cash.
I wish so much that FedNow would put CashApp, PayPal, Venmo, etc. out of business.<p>We don't need to gamify finance. Just make it fast, easy and safe to transfer money between parties, please.