More than 500 small business clients left in banking limbo as Volt closure hits SME money app Parpera
SME money app Parpera told clients to empty their accounts after Volt, the neobank providing banking services, revealed it is shutting shop.
The closure of neobank Volt has left more than 500 sole traders and entrepreneurs in banking limbo, after business money app Parpera told customers they too would need to withdraw their funds.
Parpera launched in October last year, offering a money management platform tailored to sole traders and micro-businesses.
The Parpera platform includes banking, payments, and tax management services, and the company launched business debit card options in March 2022.
The company provided those banking tools through a partnership with Australian neobank Volt and fintech Railspay, which offered its ‘banking as a service’ model to customer-facing clients like Parpera.
But Volt on Wednesday announced plans to hand back its banking license and close its customer accounts by July 5, after the company failed to secure the investment needed to power its mortgage-lending plans.
Volt’s decision means Parpera customers must withdraw their own holdings, says Parpera founder and CEO Daniel Cannizzaro.
Parpera has also ceased access to its business debit card system. In addition, invoices issued from Parpera accounts must be re-issued with alternative banking details.
Parpera is “working with our other partners and taking steps towards identifying alternative options to resume our services to our members as soon as possible,” Cannizzaro said Wednesday in a company blog post.
“We are taking this matter very seriously and apologise for the inconvenience caused and understand the impact this will have on our members and their businesses.”
The decision also means Parpera is unable to onboard new members, hampering its growth trajectory: last week, Cannizzaro revealed the company has onboarded more than 500 small business clients and processed in excess of $3.5 million in transactions since launching its debit card service.
Cannizzaro did not specify which alternative banking service providers are being targeted after Volt’s demise, but maintained Parpera is “adequately capitalised” to withstand the turbulence and will endeavour to support its customer base.
“We’ve seen fintechs in other markets experience, recover, and grow out of similar events, and I remain confident that we will find a way forward to better serve our members,” he said.
