Thought Leaders in Financial Technology: Sankaet Pathak, CEO of Synapse (Part 1)

Sankaet is building interesting infrastructure products for FinTech. Lots of insights, also, on open opportunities within the field for new entrepreneurs to latch onto.

Sramana Mitra: Let’s start by introducing our audience to yourself as well as to Synapse.

Sankaet Pathak: I’m the Founder and CEO of Synapse. If you haven’t heard of Synapse, we are what’s considered a Banking-as-a-Service provider based in San Francisco.

If you are a non-bank who wants to provide financial services products like loans, debit cards, and savings accounts, we give developers and builders a one-stop shop platform where they can just come and integrate with our APIs and embed a financial product or capability. We work with about a hundred-plus FinTech companies that build various kinds of products. We provide the backbone and infrastructure.

Sramana Mitra: How do you charge?

Sankaet Pathak: We have a couple of different pricing levers. One is our SaaS monthly fees. Depending on whatever product you use, we have three main products – Deposit Hub, Credit Hub, Crypto Hub. Based on that, there’s a flat SaaS monthly fee. Then there’s a per active user per month rate as well. Then we monetize deposits that come through the platform like payment processing and card usage.

The plus of doing a financial infrastructure is that we make money, and our customers make money as well. As our deposits grow, our customers make revenue on those. As card usage grows, our customers make money on the cards as well. It’s a rev share in those areas.

Sramana Mitra: Who are your largest customers?

Sankaet Pathak: Tons of FinTech companies. These are companies doing various things like business banking. We have a customer called Nomad that does this global cash product which gives folks in Brazil access to US accounts for just safekeeping and even more utilization as they’re traveling. Recently, we also started working with Inter which is a public bank based in Brazil.

Then a couple more public companies are currently going live and will make announcements in the near future. In the early days, I used to have much more early-stage FinTech companies. Now we also have some public companies, banks, and non-banks.

Sramana Mitra: I heard you refer to a bunch of Brazilian use cases. Is there a particular affinity towards Brazil?

Sankaet Pathak: There is an affinity that is more situational. We have a product called Global Cash which is a cash management account through our broker-dealer in the US. That enables people who live in the US and also people who don’t live in the US to be able to hold USD. Given the current financial environment, some currencies have had much larger impacts on inflation than others.

So far, USD seems to be staying ahead. We’ve seen an uptake in Brazil, Mexico, and also some Asia-Pacific use cases that we’ll probably launch early next year. This is just around being able to hold USD. It’s to be able to reduce the impacts of inflation for people.

Sramana Mitra: What role does regulation play? I assume you are of Indian origin. Let’s take an example of India. I’m sure there is a market for this. Does the Reserve Bank of India allow something like this?

Sankaet Pathak: From Synapse’s perspective, our primary regulator is US-based. This is a US-based product. We provide this product through a broker-dealer license that we hold in the US. A lot of time and attention goes into making sure that we are doing a good job around our regulatory obligations within United States, which is around identity verification, transaction monitoring, and money laundering.

We spend a lot of time, money, and people in compliance and risk. Global Cash is new. Over time, we feel like we will have more local and regional obligations to abide by. RBI already has a stipulation for this. The way they enforce it today is there are thresholds around how much you can move outside of the country.

This segment is part 1 in the series : Thought Leaders in Financial Technology: Sankaet Pathak, CEO of Synapse
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