Zum Rails, the all-in-one payments gateway that merges Open Banking with instant payments, closed a USD 7.78 million Series A funding round. The round was led by Arthur Ventures, a US-based growth equity company that specialises in B2B software.
In the US, adoption of Open Banking and instant payments lags behind global standards. Despite upcoming regulations and initiatives like FedNow, businesses face fragmented options to offer seamless transaction experiences. Integrating various capabilities across the payments ecosystem is necessary to ensure speed, flexibility, and security for consumers.
Zum Rails integrates 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. The company’s ‘omni-rail’ approach to payments includes both traditional credit, debit, and electronic funds transfer (EFT) options, as well as real-time options through partners such as Visa Direct, Mastercard, MX, and Canada’s Interac network.
Officials from Zum Rails said that companies that want to move money instantly need to adjust for risk, and Open Banking is one of the greatest gift to payments in this regard. They’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, they’re positioned for further expansion of their solution through the addition of Banking-as-a-Service and other new capabilities.
Since its founding in 2019, Zum Rails has self-funded its way to profitability. Now, the company is setting its sights on continued expansion in the US, where it’s working with financial service providers such as Fiserv to democratise access to Open Banking capabilities and real-time, FDIC-insured payments for businesses.
In addition to scaling its US growth, the company will use the funding to further expand its payments offerings, including the introduction of new Banking-as-a-Service features for merchants. The company is additionally working on a forthcoming FedNow offering in the US that will enable businesses to send and receive FDIC-insured payments within seconds.
Zum Rails processes more than USD 1 billion in payments through its platform each month for companies including Questrade, Coinsquare, and Desjardins, one of the largest federations of credit unions in North America.
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