Teen fintech Copper forced to abruptly halt banking and debit products

Copper Banking, a fintech startup aimed at teens, has been hit hard by the collapse of banking-as-a-service startup Synapse, leaving its customers in a financial bind. On May 12, Copper notified its customers that it would be discontinuing bank deposit accounts and debit cards the following day due to Synapse sunsetting its services.

CEO Eddie Behringer explained that despite prior planning, the sudden closure of accounts was necessary. Synapse had filed for Chapter 11 bankruptcy in April with plans to sell its assets, but the sale fell through, leading to a potential Chapter 7 liquidation bankruptcy.

As a result, some Copper customers were left without access to their funds. Behringer assured that the company is working with its banking partners to return the money to customers promptly. While most customers received their funds before the shutdown, a small number did not.

Despite this setback, Copper remains operational with its financial education product, Earn, which rewards teens for various activities. The company plans to launch a white-labeled family banking product later this year in partnership with large banks across America.

Copper’s revenue has been primarily driven by Earn, which has seen significant growth over the past year. The company raised $29 million in a Series A funding round in April 2022 and remains on track to near profitability this year.

The collapse of Synapse has had a ripple effect on the fintech industry, with other consumer-focused fintechs like Copper shifting towards B2B models. The impact of Synapse’s troubles has been widespread, affecting millions of people and potentially hundreds of millions of dollars in deposits.