What Synapse’s bankruptcy means for the BaaS model

A banking-as-a-service middleware platform’s slide into bankruptcy is another sign of trouble for this business model, where software providers connect licensed banks and nonbank companies that want to take deposits and extend loans — and sometimes promise to offload part of the compliance burden. 

It also suggests the remaining players will have to evolve to survive. 

On April 19, instant payment platform TabaPay announced that it had entered into an agreement to acquire the assets and affiliates of Synapse Financial Technologies after Synapse filed for chapter 11 bankruptcy, pending approval in the bankruptcy court. Synapse, which supported…