Zūm Rails is a company that sees payments as more than just moving funds faster and smarter, but rather improving the entire financial interaction between a business and its end users. Pulse 2.0 interviewed Zūm Rails’ co-founder Miles Schwartz to learn more about the company.
Details About Zūm Rails
Can you tell me more about Zūm Rails? Schwartz said:
“Zūm Rails provides the technology that businesses and merchants need to power customer payments. We currently work with nearly 500 clients, including Questrade, Fairstone, Shakepay and Desjardins, North America’s largest federation of credit unions.”
“Companies need to overcome a few hurdles when processing payments. Typically, a financial institution handles incoming and outgoing payments. However, payments are more than simply moving money from one account to another. When moving money instantly you need to adjust for risk which includes collecting key financial details and personal data prior to moving the funds.”
“Zūm Rails combines all of these requirements in a single platform and enables companies to power payments themselves through their customer interface. On the back end, Zum works with financial providers, including Fiserv, Mastercard, and Visa, to move money where it needs to go.”
Differentiation From The Competition
What are your key offerings, and what market problems do they solve? How is this different from competitors? Schwartz shared:
“Most fintech providers focus on a single aspect of the payment journey, such as risk management, data aggregation, invoicing, or data insights. We take a different approach—bringing all those capabilities together on one gateway.”
“Our approach allows our customers to eliminate the need for up to seven third-party providers. Further, integrating these providers is typically arduous, and some companies won’t go through the trouble, resulting in a lack of data sharing and poor analytics. Providing these functionalities through a single gateway also helps reduce onboarding timelines, due diligence risk management, and more. Rather than needing to go through each of those processes seven times, companies can now go through them once and benefit from added functionality.”
Formation Of The Company
How did you come up with the idea for Zūm Rails? Schwartz reflected:
“I have always been an entrepreneur at heart, but the idea for Zūm Rails came up when I worked at my previous job, Flinks. In my early days at the company, I was responsible for building the entire sales pipeline as we worked to solve data aggregation challenges for banks and other financial services providers. As I began working with our clients and prospects and understanding the challenges keeping them awake at night, I came across more significant market challenges—one for which there was no solution.”
“I knew the market needed a platform that merged open banking and instant payments. I pitched Flinks on the idea to build this themselves, but theys declined as they did not want to go into payments. It was in that moment I knew it was the right decision to quit my job in order to bring this idea to life.”
“My co-founders and I immediately got to work building the concepts and technology that would allow us to combine these capabilities in one place. At the time, most companies were thinking about each of these capabilities separately or not at all, and we started our mission to bring them all together in 2019.”
Challenges Faced
What challenges have Schwartz and the team faced in building the company? Schwartz acknowledged:
“Our most significant roadblock in the early days of Zūm Rails was attracting enterprise-level clients. As a company that’s been around for only a fraction of our initial target prospects, we needed to find a way to build trust. We had no client success stories to validate us at the time—especially amongst enterprise clients. This was further complicated as almost all our clients operate in the highly regulated financial services space—where compliance and trust are the cornerstones of partner interactions.”
“To overcome this challenge, we needed to demonstrate to prospects that we could deliver on the capabilities that we said we could, using each successful deployment as a case study when we talked to future prospects.”
Significant Milestones
What has been your biggest milestone so far? Schwartz cited:
“We have achieved numerous milestones, from the day we signed our first enterprise client to the day we hit 50 employees. But, by far, our biggest milestone was when we saw 50% growth in just under six months. We sat down and looked at the numbers and realized we achieved the same level of growth we had seen over the past five years in just six months. We hit well into the triple-digit growth percentage year over year and show no signs of slowing down.”
“Getting to the milestone came down to our ability to solve challenges that no other company or product in the market could solve. We are deeply committed to building trust with our clients by speaking with them, truly understanding their pain points, and setting out to build a solution that uniquely solves their specific issues.”
Growth Over The Last Year
Can you tell us more about your growth over the first half of the year? Schwartz replied:
“Over the first half of the year, we have seen exponential growth as a company. From achieving 50% growth to our significant headcount growth and new client wins, the past six months have been integral on our growth trajectory on the path to hit a $500 million valuation.”
“We recently announced our new large-scale Banking as a Service (BaaS) initiative to expand our platform’s bank-like capabilities for enterprise clients. Fintech and payments veteran Miro Pavletic is leading the initiative to introduce North America’s first AI-powered BaaS platform that allows businesses to harness open banking and stay ahead of regulators. The new capabilities will enable consumer-facing companies across industries to offer services historically provided by banks, including card issuing, program management, transaction settlement, identity validation, and real-time fraud assessment, directly to their own customers.”
“We have seen immense growth over the past six months and look forward to building on this momentum as we work towards a new goal: Generating 50% of our annual income from the U.S. market over the next 18 months.”
Evolution Of Zūm Rails’ Technology
How has the company’s technology evolved over the past year? What influenced these changes? Schwartz noted:
“Over the past year, we have continued to invest in enhancing our product offerings. We are extremely thankful to our clients for working with us, providing feedback and helping us evolve our offerings in a way that best meets market needs. As we work to provide an all-in-one payments gateway that allows clients to use any payment rails while accounting for risk, our customer feedback plays an integral role in our product roadmap and growth strategy.”
“Our clients are on the ground using our products daily in their workflows. They know where it excels and what they wish the platform could achieve. We take all of this positive and constructive feedback and use it to influence our product development. Speaking with the larger market, prospects, strategic advisors and more also provides us with invaluable insight into larger market trends and emerging issues that we can solve.”
Partner Network
What is your partner network and how has it contributed to your growth? Schwartz emphasized:
“Our partner network allows for SaaS businesses to integrate Zūm downstream and provides us further distribution—we sell to one, they sell to many. The partner portal allows these SaaS companies to manage operations, automate onboarding and add payments as an additional revenue stream.”
“It has also played an integral role in our growth and brought Zūm into the same networks as major financial players, including Visa, Mastercard, MX, and Fiserv. Each of our partners can serve all their clients, meaning hundreds of businesses can use our platform with a single partnership. This has significantly contributed to our sustained growth trajectory thus far, and we look forward to continuing to forge new partnerships to expand our network.”
Future Goals
What are some of your future goals over the next six months and more long term? Schwartz concluded:
“The U.S. market is our primary focus over the next 18 months as we look to build on our current momentum while expanding in the region. This includes working with new partners, and launching new products including our BaaS offering. With each of these new initiatives, we also look forward to expanding our team in the region and supercharging our growth.
“Over the long term, we want to change what companies should expect from their payment provider and set a new universal standard for a payments gateway that seamlessly facilitates payments while adjusting for risk in seconds. We also look forward to continuing to expand our offering into new regions based on market demand.”
