For those who are yet unaware, Silicon Valley Bank, the 16th largest bank in the US, failed on Friday, March 10, 2023, due to a run on their deposits that was avoidable. A large number of venture capitalist firms withdrew funds simultaneously, creating a bank run. The FDIC has since stepped in, placed the bank’s holdings in receivership, and insured all funds, even those over $250,000. The FDIC transferred all insured and uninsured deposits to a newly created, full-service FDIC-operated ‘bridge bank’ in an action designed to protect all depositors of SVB. All depositors will receive their funds; investors are not guaranteed to be reimbursed at this time.
Which Apps Were Affected?
*The below information is based on research by Specialty Bookkeepers and is not an endorsement by these companies.
NO KNOWN IMPACT
- QuickBooks and QuickBooks Payroll
- Relay Financial For users of Relay 2.0, this is an excellent option for anyone who was affected by SVB’s collapse, as Relay has the ability to spin up accounts quickly. If you are interested in adding a new bank to diversify your wealth holdings, Relay’s partner bank, Thread Bank, holds a very high cash-reserves-to-deposits ratio. There is also a separate product available for a fee with Thread Bank via Relay Financial that will insure amounts above $250,000. Get started with Relay here.
- Stripe Stripe does not have direct exposure to Silicon Valley Bank (SVB) or Silicon Valley Bank UK (SVB UK). Payouts to SVB and SVB UK bank accounts have been suspended in order to safeguard customers’ access to funds. Funds will accumulate in Stripe balances until new payout bank accounts are configured. Stripe’s services are unaffected by SVB’s closure and continue to operate normally.
- Bill.com 11% of the funds BILL held to transfer for their customers was at Silicon Valley Bank. The FDIC will be paying out these funds, though there may be a delay with some payments. BILL is in the process of reaching out to a small group of customers whose payments may have been delayed and is committing to stand behind any pending transactions processed through SVB to ensure they are processed successfully.
- Etsy Etsy utilized SVB’s payment rails (the method of moving money between customers and vendors) for payment disbursements. Approximately 0.5 percent of their active seller base had their payments delayed on Friday. Etsy was working to pay those sellers on Monday and had begun processing payments via another payment partner as of Monday morning.
- Melio Melio both utilized SVB’s payment rails AND held some trust funds in SVB accounts. They have already switched to using JPMorgan Chase for their payment provider, and any delayed funds from over the weekend will be processed this week. Melio will make sure that pending transactions initially processed through SVB will be paid in full and is working diligently to ensure they are completed promptly, regardless of the FDIC SVB recovery process.
- Shopify If your store is located in the US or UK, getting paid with Shopify Payments and Shop Pay Installments isn’t impacted by the SVB shut down. If you have an SVB account on file for Shopify Payments, your payouts have been temporarily paused. Payouts will automatically resume after you update your Shopify account with your new bank account information. The Shopify Capital program has been impacted by the SVB shut down and your Shopify daily repayments have been temporarily paused. Shopify expects to resume all operations for Shopify Capital in the United States within the next few days.
- Corpay One As of 3/14/23, Corpay is resuming payments operations to minimize customer disruption. Payments will continue to be processed through Silicon Valley Bank (SVB) as they establish their processing accounts with other major financial institutions. You can resume processing payments immediately within your Corpay One account using the Pay Now feature. If you have questions about payment reconciliation or see discrepancies in your payments, please contact their support team at firstname.lastname@example.org. Auto-Schedule will resume full functionality Wednesday, March 15, at 9:00 AM ET. At this point, any bill within their system holding a status that appears to need initiation will be issued automatically. If you have made payments off-schedule or outside of Corpay One during their payment pause, please contact their support team to have these bills reconciled.
What should you do next?
First, be concerned, but try not to panic. There is no need to hastily withdraw your funds from all of your accounts and financial institutions. However, if you have more than $250,000 held by one bank that you’re not confident in, do feel free to spread that out amongst other banks. Another solution is to utilize products such as IntraFi, which allows for you to pay in any amount over $250,000 currently held by a single bank, which is then diversified to other banks in CDs until you need to recapture the funds.
Ultimately, the most important thing you can do at this moment is be on alert. Scammers will most certainly take this opportunity to prey on our uncertainties after this large bank collapse. An attempted fraud attack may be in the form of a phone call to gather information from you while posing as a financial institution or other authority, claiming to be calling to confirm your funds weren’t compromised and requesting that you log in to your accounts and give them account information. Be wary of any incoming phone calls, emails, or texts requesting financial or account information over the coming weeks and months. Never provide your login credentials or other security information to an unknown caller or contact claiming to be affiliated with your financial institution or a government authority.
Regarding state taxes, if you have any state tax payments that are delayed due to the situation caused by SVB’s collapse, states allow for circumstances for delays that are outside of the control of the average consumer. I am fairly confident that this exception will apply under these circumstances.
We recommend that all of our clients periodically review their accounts. If any payments are delayed due to the circumstances with SVB, please reach out directly to the support team for that app and CC our team as well so that we may assist with resolving the issue. We are committed to providing support to our clients and will provide any updated information as it becomes available.
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