Starbucks has set a precedent in the business world not merely by selling cups of coffee but by harnessing billions loaded onto its gift cards and app balances, positioning itself as a significant player in the unofficial banking sector in the U.S.
Miles Schwartz, co-founder and CEO of Zūm Rails, aims to enable businesses across various sectors to adopt similar ‘bank-like’ strategies.
Since its inception, Zūm Rails has experienced remarkable growth, expanding from a team of six to 75 employees, including around 20 in the U.S. over one year.
This Miami and New York-based fintech company has nearly tripled its revenue, primarily fueled by its expansion efforts in the U.S. and the launch of a major offering: card issuance.
According to Schwartz, “Now we’re not just moving money, we’re giving our clients the ability to issue prepaid or secured cards, both physical and digital.”
This innovation paves the way for companies like Western Union to provide newcomers in Canada with banking solutions despite their lack of credit histories.
Additionally, platforms such as Robinhood and Questrade can now offer users the opportunity to invest directly from their accounts while managing bills.
Zūm Rails’ client base is diverse, catering to investment brokerages, marketplaces, lenders, and cryptocurrency exchanges.
The core focus remains on instant money movement, ensuring funds transit smoothly while implementing safety measures like name matching and risk assessments to mitigate fraud.
Schwartz believes that establishing trust with users will naturally lead companies to incorporate more banking services into their offerings.
He poses a pertinent question: “What’s the difference between them and a bank anymore? If you’re holding someone’s money in your app, why not provide them a card, a deposit account, bill payment, and savings options?”
Crafting this vision of a ‘business bank in a box’ was no simple task.
Entering the U.S. market required starting from scratch, which included building brand awareness, forming essential banking partnerships, and navigating a complex regulatory landscape.
Schwartz took a hands-on approach, attending numerous conferences, engaging with various banks, and thoroughly mapping the ecosystem himself.
He attributes much of Zūm Rails’ success to perseverance, stating, “In Canada, after a while, everyone knew who we were. In the U.S., we had to earn that trust from the ground up. I didn’t want to hand something that critical to a new hire without knowing it inside and out myself.”
Looking ahead, Schwartz envisions a future where companies can stay ahead of customer needs in the next two years.
He recognizes that the act of merely moving money is becoming obsolete, emphasizing that the competitive edge lies in integrating software, maintaining compliance, and providing value-added services.
Zūm Rails aspires to take the hassle out of building banking infrastructure, affording businesses the opportunity to create a service that emulates a traditional bank without needing to piece together numerous vendor solutions.
Schwartz asserts, “We can build your entire bank in a box in 30 days—one API, one platform, one portal. It’s a no-brainer compared to stitching together five or six different providers.”
The dynamic environment of a startup presents immense excitement for Schwartz, stemming not only from the ambitious product roadmap of Zūm Rails but also from the personal development that occurs at such a rapid pace.
He concludes, “If I’m the same leader I was three months ago, Zūm would become obsolete. I’ve technically been underqualified for every stage of the company. My job is to get qualified fast. That’s the fun part: leveling up constantly so the business can too.”
image source from：refreshmiami
