Zūm Rails Partners with Fiserv for US-Embedded Finance

Zūm Rails, a Canadian fintech company providing open banking and instant payment services through a unified platform, has partnered with Fiserv. 

The collaboration aims to enable US businesses to offer embedded finance capabilities directly to their customers.

Expanding embedded finance offerings

The partnership will allow Zūm Rails to utilise Fiserv's embedded finance capabilities, positioning Fiserv as the primary transaction processor for Zūm Rails' payments gateway. 

This integration will enable businesses, from large enterprises to small and medium-sized businesses (SMBs), to manage various financial operations without relying on traditional banks or third-party providers.

These operations include facilitating accounts payable and receivable transactions, merchant onboarding, reporting, reconciliation and fraud management. 

Early adopters of the solution include real estate platform Homebase and property management software Passive.

While the embedded finance market, currently valued at US$84bn, presents a significant opportunity for companies across various industries, the high barrier to entry has deterred many from exploring this space.

This is because, historically, each new capability required working with multiple providers to build entirely new integrations.

Sunil Sachdev, Head of Embedded Finance at Fiserv, says: “As companies look for new ways to own and strengthen their relationships with customers, there's growing energy around embedding financial services directly within a software platform.”

Comprehensive payment options

However, through its relationship with Fiserv, Zūm Rails will now provide US businesses and merchants with a single solution for accepting and distributing transactions. 

The Zūm Rails payments gateway aims to simplify and accelerate the integration of new capabilities such as open banking and instant payments directly into companies' platforms.

By combining Zūm Rails' payments gateway with Fiserv's payment facilitator model, businesses can move funds through major US payment networks. 

These include Visa and Mastercard, the Automated Clearing House (ACH), FedNow (the Federal Reserve's instant payment system), WEB Debit and PayPal.

Future expansion plans

As Zūm Rails continues to scale across the US, it plans to introduce additional embedded finance capabilities to businesses using its platform. 

This includes its upcoming Banking-as-a-Service (BaaS) offering, which will enable companies to issue their own debit cards for direct spending.

Miles Schwartz, Co-Founder of Zūm Rails, adds: “We launched Zūm Rails with the goal of providing open banking and instant payments services at a time when it was difficult for businesses to do both. 

“As businesses' needs have evolved, so has our work to enable them to execute on any digital payments, financing or other capabilities that they need to deliver on their customers' expectations.”

Beyond the US market, Zūm Rails plans to expand its offerings throughout North America. 

This includes leveraging its Canadian roots to bring its existing integration with Fiserv to Canada, as well as developing new joint offerings specifically for the Canadian market.

Sunil concludes: “By making capabilities from our merchant acceptance, banking, and card issuing businesses available to clients and partners through a curated set of APIs, we are helping these clients expand their service models, build deeper relationships with merchants, and significantly expanding the revenue potential associated with each relationship.”

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