Jack Henry acquires Payrailz

Payrailz provides cloud-native, API-first, artificial intelligence-enabled consumer and commercial digital payment solutions and experiences that enable money to be moved in the moment of need, and banks and credit unions to compete with industry disruptors.

Acquiring Payrailz supports Jack Henry's technology strategy that helps banks and credit unions innovate and meet the evolving needs of consumer and commercial accountholders.

This acquisition also reinforces the company's mission to strengthen connections between people and financial institutions through technology and services that reduce the barriers to financial health.

This acquisition improves Jack Henry's Payments-as-a-Service (PaaS) strategy, which is an extension of its commitment to Open Banking and the ability to enable embedded finance and embedded fintech.

Jack Henry supports the demand for PaaS with a virtual payments hub that consolidates money-moving solutions and supports different payment channels and types. Payrailz complements this hub with next-generation capabilities for consumer and commercial bill pay, real-time person-to-person (P2P), account-to-account (A2A), business-to-customer (B2C) payments, and more.

Payrailz’s integration

Payrailz’ P2P solution features an open-loop system, real-time transfer capabilities, and fraud mitigation controls, along with a more modern payments experience for users. This flexibility is important for today’s financial institutions, as their users want solutions that are convenient, secure, and easy to use.

Moreover, in January 2022, Payrailz has completed an audit by a qualified security assessor in accordance with the data security standards set forth by the PCI Security Standards Council, meaning that a qualified security assessor company reviewed Payrailz’ security measures and found it was compliant with PCI’s DSS standards. Subsequently, Visa added Payrailz to its Global Registry of Service Providers, and Mastercard has done the same.

PCI Data Security Standard (DSS) is the standard in the industry when it comes to securing cardholder data. It consists of 12 basic requirements grouped in six categories for establishing and maintaining a reliable and secure payment processing environment.

Merger and acquisitions in financial services

M&A activity has slowed from its record-setting 2021 pace, with economic headwinds stunting deals in the first half of 2022. However, activity has merely returned to 2019 levels and dealmaking is expected to play an important role in corporate growth strategies over the next six months, according to PwC’s Global M&A Industry Trends: 2022 Mid-Year Update.

The industry-wide need for digital capabilities, combined with pressure from regulators and disruption from platforms and fintechs, means the financial services (FS) industry remains primed for transformation. This will lead to merger & acquisition (M&A) activity during the second half of 2022, with a focus on the formation of strategic partnerships, consolidation and deals that help drive digital transformation.

Although M&A activity has slowed in the first half of 2022, it has merely reset to pre-pandemic levels, which averaged around 25,000 deals per half of the calendar year.