Zūm Rails Raises $7.8 Million to Merge Open Banking and Instant Payments – Finovate

• Zūm Rails landed $7.78 million (CAD $10.5 million) in a Series A funding round led by Arthur Ventures.
• The company will use the funds to scale its U.S. growth and to further expand its payments offerings, including the launch of new banking-as-a-service features.
• Zūm Rails currently processes more than $1 billion in payments through its platform every month.

Canadian fintech Zūm Rails (pronounced zoom rails) brought in $7.78 million (CAD $10.5 million) in funding this week. The Series A round, which was led by U.S.-based Arthur Ventures, marks the company’s first VC funding round.

Founded in 2019, Zūm Rails seeks to make the payments experience less disjointed by integrating open banking and instant payments into a single gateway. This removes the need to stack technologies on top of one another and ultimately creates a better and more secure customer experience. The company launched in the U.S. market late last year, leveraging partnerships with Visa Direct, Mastercard, and MX.

Zūm Rails will use today’s funds to scale its U.S. growth and to further expand its payments offerings. Specifically, the company plans to launch new banking-as-a-service features for merchants and has plans to unveil a FedNow offering in the U.S. that will enable businesses to send and receive FDIC-insured payments in near-real-time. FedNow, the U.S. government’s real time payment service, launched last July.

“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,” said Zūm Rails Co-founder and CEO Marc Milewski. “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.”

As part of building out its U.S. operations, Zūm Rails has been working with financial service providers such as Fiserv to democratize access to open banking capabilities and real-time, FDIC-insured payments for businesses. “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,” said Arthur Ventures Vice President Jake Olson.

As for what’s next, company Co-founder and Chief Sales Officer Miles Schwartz said that the company’s long-term vision transcends its individual capabilities. “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.,” explained.

Zūm Rails, which up until now has been self-funded, currently processes more than $1 billion in payments through its platform every month. Among the company’s clients are Questrade, Coinsquare, and Desjardins.

Photo by Jonathan Petersson

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