LAS VEGAS – TabaPay’s 2024 near-acquisition of Synapse Financial may have been ill-fated, but TabaPay CEO Rodney Robinson credits the miss for his firm’s decision to pursue a bank deal instead.
“The idea to get a bank actually germinated from then because we looked at their lending licenses and their brokerage,” Robinson said in an interview at the Money20/20 conference in Las Vegas. “But we couldn’t do everything we wanted to do with that, so [buying] a bank was the next logical choice.”
The money movement platform announced plans to buy Denver-based Transact Bank in September. The deal has been in the works for two years, he said, and was spurred when someone on his team spotted a “for sale” sign in Transact’s branch window. (The sign was for the building, but the bank, as it turned out, was also for sale.)
Synapse, though, was the first acquisition target that caught TabaPay’s attention. The middleware company had an in-house issuing platform, lending licenses, and a captive brokerage, and its technology would have made for “an interesting acquisition,” Robinson said.
But more than a year of closed-door talks started and stopped well before TabaPay later almost bought Synapse out of bankruptcy in April 2024.
“We walked away because the books were a mess,” Robinson said. “The technology was interesting, but you couldn't separate the two.”
Ultimately, buying Synapse would have been “a half measure,” he said. “So we learned to go full measure and get a bank.”
The deal is expected to close in the fourth quarter pending final regulatory approvals, after which Transact Bank will be renamed TabaBank and operate alongside TabaPay under TabaHoldings, a newly registered bank holding company. Robinson expects TabaBank to be operational by April.
TabaPay has been working with the Federal Reserve and the Office of the Comptroller of the Currency for about two years, he said, and in preparation to become a bank holding company, it’s composed a board of 50% bankers, 50% fintech folks.
“We had to change the nature of the company from a fintech company to a bank holding company,” Robinson said. “We put on a very, very transparent management structure in the company. I think it's a much better way to manage the company.”
TabaBank’s focus won’t stray far from Transact Bank’s focus, however. Transact is heavily focused on the payments sector, as it’s been owned by European payments processor Transact Pro since 2018.
New location, long-term relationships
TabaBank will maintain its Denver branch but also open a branch on Cambridge Avenue in Palo Alto, California.
“We're going to be a fintech-focused bank in the middle of Silicon Valley,” Robinson said. “You have all the venture companies in Silicon Valley that fund fintech, and they need a partner bank. We're sitting just right down the street from all those companies.”
As for TabaPay’s 20-some partner banks, Robinson said they’re not going anywhere, as they provide both capacity and diversification.
“We’re going to keep on growing with them,” he said. The proposed TabaBank “is about delivering all products out of one bank and innovation in the market, so you're going to see unique parts of acquiring out of our bank, but our partner banks are great. We're going to keep on doing business with them.”
Payment facilitators and independent sales organizations are a segment of business that TabaBank will serve. Partner banks will continue to hold TabaPay’s cross-border payments business, for instance, and process payments for some of its largest merchant customers, Robinson said.
