Payrailz, a bill-pay and peer-to-peer payments startup, is gaining traction in the market, with the CEO touting the onboarding of 100-plus clients since its 2016 formation.
The Glastonbury, Connecticut-based company, owned by 17 credit unions and five banks, set out to meet financial institutions’ needs in being able to offer consumers and businesses easier bill-pay options. The company also provides peer-to-peer payment services and is the white label company behind Chuck, the community banks’ answer to Zelle.
Payrailz nabbed about one-third of its 105 clients just in the first quarter of this year, which makes it the fastest-growing company in the industry, asserted the company’s founder and CEO, Fran Duggan.
“We’re growing which means others are shrinking,” Duggan said. By the end of the year, he suspects his client count will be about 150, which is double what it was at the end of last year, he said.
Payrailz competitors include some of the biggest payment technology companies in the industry, such as Fiserv, Fidelity National Information Services (FIS) and Jack Henry, he said.
While those larger rivals tend to focus on servicing larger companies, Duggan said he’s been told by his new customers that the bigger competitors were a bit surprised to be losing customers to Payrailz. He declined to say how much the privately-held company earns in annual revenue.
His company, in partnership with Alloy Labs Alliance, also took on Zelle, the larger instant payments unit of Early Warning Services that is owned by the biggest banks in the country.
By comparison though, Zelle still dwarfs Payrailz. Along with its partner Fiserv, Zelle announced this month that it has drawn 1,000 financial institutions to its service. Zelle also said earlier this year that its customers made nearly $500 billion in payments using its system in 2021.
Duggan isn’t new to the arena. He founded another bill-pay company, Payveris, in 2011 and led it until 2016. That company was sold to Paymentus last year for $152 million.
With Payrailz, Duggan said he has gathered a management team with extensive legacy experience. The company has 65 employees in all.
Payrailz woos customers by offering to let them make payments in whatever way works best for them, whether that’s with real-time payments, ACH channels or other options. Duggan believes that’s having a winning impact in the industry, allowing the company to poach customers from larger players that don’t as readily offer all payment types, such as real-time payments.
Payrailz has also tapped other partners to get ahead. Earlier this month it linked with Q2 Holdings to extend its P2P payments services to customers on that platform. Earlier in the year, it also locked arms with Alkami to reach more financial institutions through that partner.