Next up on Synapse’s fintech services platform: White-labeled credit products
When Sankaet Pathak co-founded Synapse in 2014, he had a vision of doing more than just building a platform that enables banks and fintech companies to easily develop financial services.
He wanted to build a company that helped provide greater access to financial services to a larger pool of people — regardless of their net worth or their country of origin.
Over the years, San Francisco-based Synapse has steadily grown its Deposit Hub, its product that is aimed at making it “faster and easier” for fintech companies to launch and scale foundational financial products to their customers. Synapse’s banking-as-a-service platform provides payment, card issuance, deposit, lending, compliance, credit and investment products as APIs. Through those white-labeled developer- and bank-facing APIs, Synapse aims to make it easier for companies to connect with banks, and, in turn, for banks to automate and extend their back-end operations. And that line of its business has been doing well. Last year, for example, Synapse doubled its revenue, and this year, so far, it has increased it by 150%.
Today, the company is going a step further and announcing a new platform — its Credit Hub, a full-stack API platform designed to give fintech companies and neobanks a way to make credit products “easier and smarter” for everyday Americans. The platform is designed to allow any company to build white-labeled credit products — including card issuance, credit-building tools, lending accounts and cashback rewards — in as little as six weeks.
Or, as Pathak puts it, “We want to democratize credit, so that the credit invisible can build, and get access to, credit.”
In private beta until now, the company’s Credit Hub has so far helped facilitate the issuance of one million credit accounts, and the platform has extended more than $40 million in credit.
Synapse is launching its Credit Hub by leveraging the Mastercard network. With the Synapse Credit Hub platform, companies can offer a “comprehensive” suite of products, including card issuance, credit-building tools, accounts and cashback rewards, among other things, Pathak said.
“We realized that no good solution existed for the credit market. Companies would have to piecemeal it together,” Pathak said. “It takes a year or 18 months to take products to market, at a minimum. So we’re taking the same speed we brought to the deposits space to the credit space so developers can democratize credit for everyday Americans and hopefully in the future, globally.”
Synapse was founded in 2014 by Bryan Keltner and Pathak, who came to the U.S. from India to study but grew frustrated at the difficulty of opening a bank account without U.S. social security history. Specifically, as an astrophysics grad student at the University of Memphis, Pathak was denied a bank account that he applied for alongside an American colleague.
Even today, Pathak says he — as CEO and co-founder of a company that in 2019 raised over $33 million in a Series B funding round led by Andreessen Horowitz (a16z) –– considered himself one of the “credit invisible.”
“Pretty much the American dream is to essentially get a house. But If you’re a person who is credit invisible, you cannot get a house. I could not get a house in America — and I’ve done decently well for myself — because I’m an immigrant,” he said.
But of course, the underbanked doesn’t just include immigrants. It also includes minorities and other populations who have been caught in a cycle of not having access to certain banking services, including credit. He said that the goal is that people with little to no financial expertise can take financial services to market. That’s not the case with other providers that require more expertise to get products and services to market, he said.
The Synapse Credit Hub, he said, specifically supports a new class of flexible, personalized accounts, cash advances and lines of credit for businesses, and increases access to credit-building and borrowing services for end-users. The platform also gives companies the ability to go to market in as little as six weeks with “out-of-the-box” access to multiple bank partnerships; a full suite of KYC and card issuance features; and a full stack of payment tools, including ACH, checks, wires, bill pay and card processing.
“Until now, nobody could provide a comprehensive solution that enables the developer to go live with a feature-rich credit product in just weeks,” Pathak said. “We created Synapse to democratize and drive innovation in fintech, and our Credit Hub operates alongside our deposit products to provide a full-featured digital banking experience.”
The various types of credit accounts that can be built using Credit Hub offer different services, such as a credit card, a spend card, buy now, pay later and the ability to issue one-time or revolving loans to enable customers to build credit.
“Synapse shares in Mastercard’s commitment to offering and delivering a frictionless payments experience that is easy to access and always on,” wrote Sherri Haymond, executive vice president of digital partnerships at Mastercard via e-mail. “With their Credit Hub platform, Synapse is enabling partners to accelerate the launch of credit products, allowing new solutions to go to market in a matter of weeks instead of months. We’re pleased that Synapse is leveraging the Mastercard network to make credit products more accessible.”