Zūm Rails – an all-in-one payments gateway that merges open banking with instant payments – announced the closing of a C$10.5 million Series A funding round. This funding round was led by Arthur Ventures – a Minneapolis-based growth equity firm specializing in B2B software.
Compared to other markets worldwide, the U.S. was slower to standardize practices around open banking and instant payments. And while this is now changing with forthcoming data-sharing regulations and new programs such as FedNow, the options for businesses to offer these experiences to their consumers are still fragmented. This means businesses have to weave together individual capabilities from across the payments ecosystem to provide consumers with a holistic transaction experience that doesn’t compromise speed, flexibility, or security.
Zūm Rails combines open banking and instant payments into a single gateway that powers the entire transaction journey. This includes everything from verifying a customer’s identity to linking directly with their bank account to reduce fraud and failed transactions to facilitating payments via the method of the customer’s choosing. Zūm Rails’ omni-rail approach to payments includes traditional credit, debit, and electronic funds transfer (EFT) and real-time options through partners such as Visa Direct, Mastercard, MX, and Canada’s Interac network.
Since being founded in 2019, Zūm Rails has self-funded its way to profitability – establishing itself as a leading payment gateway across North America. And now the company is setting its sights on continued expansion in the U.S, where it’s working with financial service providers such as Fiserv to democratize access to open banking capabilities and real-time, FDIC-insured payments for businesses.
Along with scaling its U.S. growth, Zūm Rails will utilize the funding to further expand its payments offerings, including the introduction of new Banking-as-a-Service features for merchants. And the company is additionally working on a forthcoming FedNow offering in the U.S. that will enable businesses to send and receive FDIC-insured payments within seconds.
Zūm Rails processes over $1 billion in payments through its platform each month for companies including Questrade, Coinsquare and Desjardins, the largest federation of credit unions in North America.
KEY QUOTES:
“Companies that want to move money instantly need to adjust for risk, and open banking is the greatest gift to payments in this regard. We’ve brought open banking and instant payments together in an omni-rail solution that enables companies to check off all of their payments needs from a single gateway. With Arthur Ventures’ investment, we’re positioned for further expansion of our solution through the addition of Banking-as-a-Service and other new capabilities.”
– Marc Milewski, co-founder and CEO, Zūm Rails
“Payments are the lifeblood of every business, but too often, keeping up with the ever-evolving array of services needed to process payments quickly, efficiently and securely stands in the way of success. Zūm Rails’ explosive growth is validation of its ability to solve this problem. Having already transformed the Canadian payments landscape, the company is well-positioned to increase this growth with the investments it’s making in its product and scaling its presence across all of North America.”
– Jake Olson, Vice President, Arthur Ventures
“From open banking to instant payments, Zūm Rails has been on the front lines of the biggest payment technology advancements before many of them were even a thought in businesses’ minds. Our long-term vision, however, goes far beyond the individual capabilities we offer. Integrating these capabilities into a single solution that makes businesses’ lives easier will continue to be our focus as we double down on our expansion in the U.S.”
– Miles Schwartz, co-founder and Chief Sales Officer, Zūm Rails
