Jack Henry & Associates, which provides payment technology services to banks, credit unions and other financial firms, announced the acquisition of Payrailz, which offers bill-payment and peer-to-peer payments.
The addition of Glastonbury, Connecticut-based Payrailz will enable Jack Henry to offer bill-payment services to commercial and consumer clients, along with real-time person-to-person payments, and business-to-consumer payments, according to a Tuesday press release.
Jack Henry views the Payrailz deal “as a strategic addition to our payments ecosystem, which enables our clients to simplify the complexity of payments, modernize their existing payment channels, and remain at the center of their account holders' payment experiences,” Jack Henry President Greg Adelson said in the press release.
The Payrailz deal will add between $8 million and $10 million to Jack Henry’s annual revenue, which is equal to about half a percent, according to an investor note from financial firm Robert W Baird analyst David Koning.
“This acquisition will help modernize (Jack Henry) in supporting banks and credit unions as a strategic addition to their payments ecosystem,” the Baird report said. That will build on Jack Henry’s payments-as-a-service strategy, the report said.
Formed in 2016, Payrailz is currently owned by a credit union service organization, made up of 17 credit unions, and five banks as well as its founders and other investors, according to a spokesperson for the company.
The 65-employee company has competed against larger rivals such as Fiserv, Fidelity National Information Services (FIS) and Jack Henry. In a June interview earlier this year, CEO Fran Duggan said Payrailz had won about one-third of its then 105 clients in the first quarter,
A spokesperson for Monett, Missouri-based Jack Henry declined to provide financial details of the transaction, which is expected to close by the end of this month.
The combined company will have 6,865 employees, and Jack Henry plans to retain all of the Payrailz workers, the spokesperson said.
Duggan also said earlier this year that his company’s new customers had told him that the larger companies were surprised to be losing business to his firm.
"Joining Jack Henry also enables us to build on our market reputation and accelerate our vision of providing smarter payment experiences, “ Duggan said in the press release.