Published on Tuesday, October 18, 2022

Taking Steps to Solve the P2P Provider Problem

It comes as no surprise that P2P payment providers have been taking the U.S. by storm. The likes of PayPal, Cash App, Venmo, and others consistently have been demonstrating off-the-charts user and volume increases, and they have expanded beyond person-to-person transactions into business use cases, further bolstering growth. For example, Venmo touted a volume increase of 6 percent to $61 billion in Q2, reporting commerce volume growing at a rate of more than 250 percent. And Cash App pointed to business gross payments volume of $4.2 billion, up 86 percent on a three-year compound annual growth rate (CAGR) basis.

Impressive as they are, these numbers just scratch the surface of the impact payments apps are having on the market. If you look at their collective effects on today's landscape, you will see billions of dollars flowing in and out of non-insured accounts, resulting in a corresponding disintermediation of the bank account.

"Financial services have become fragmented over the last 10 years and that accelerated through the pandemic," said Tede Forman, President, Payment Solutions at Jack Henry. "I think financial institutions are starting to realize now that it's death by a thousand duck bites and are looking for ways to offer a better customer experience."

Bank-Based Solutions

Bank-centric offerings have waged a valiant effort as comparable solutions. In fact, Zelle® growth has outpaced that of other providers, resulting $155 billion and 554 million transactions in Q2, with an 87 percent quarter-over-quarter increase in disbursement transactions. And new market entrant CHUCKTM, a white-labeled P2P solution powered by Payrailz, which was recently acquired by Jack Henry. Chuck is offered by   a consortium of community institutions who are collectively members of the Alloy Labs Alliance, who partnered with Payrailz (a Jack Henry company) and continues to pique interest in the industry. (For more information, see our previous piece, "Top 6 Things FIs Should Know about CHUCK.")

"Payments are quickly becoming, if not already, a primary touch point consumers and businesses have with their FIs," said Jason Henrichs, founder and CEO of Alloy Labs. "That puts them in a quandary because today's payment apps force FIs into the space of being a taker, not a maker. CHUCK powered by Payrailz (a Jack Henry company), is looking to solve that issue by asking, 'How can I use payments to provide better user experiences and do it in timetable and cost in line with the size of my institution?'"

Payrailz's proven P2P technology which powers CHUCK offers cloud-native, API-first, AI-enabled consumer and commercial digital payment solutions. This infrastructure then allows FIs flexibility over individual customer experiences and the rails on which payments flow.

"With the relationships Jack Henry has, we're really looking at expanding the 'funding from' and 'funding to' side within the solution," said Forman. "So, if you think in terms of a community financial institution offering those services to their customers, to me it really opens up the ability to allow choice from the consumer in an open-loop network."

And providing that level of choice may just translate to increased use. Because CHUCK originates in a bank's mobile app or internet banking interface, it couples the safety and security of a bank environment with the option for the FI's customer to send the funds to the payee's preferred account, whether it be another bank account or a payment app. As announced at Finovate Fall 22, CHUCK has the intent to integrate with Prizeout, a new rail that can support the network's expansion and will offer a way to enhance the transaction.

The Path Forward

"Banks and credit unions can't afford to give up the payments rail; it's an important point of differentiation," remarked Henrichs. "Venmo volume alone shows that if you don't offer a solution that they want, your customers will go somewhere else. So, now's the time to ensure you have one that meets them where they are and provides maximum flexibility for them to transact how they see fit."  

While Jack Henry's Payrailz acquisition only closed on September 1, the company is making the P2P solution available as soon as possible. The P2P solution has had significant growth since launching in 2021, and now as part of Jack Henry, the plan is to ramp up their innovation with exciting new capabilities. Financial institutions intrigued by what this may mean for their offerings can contact Jack Henry.

In addition, the future of bank-centric payment networks will be featured in a session at NEACH's Future of Payments Symposium. Julie Thurlow of Reading Cooperative and Henrichs will discuss how CHUCK differs from other offerings and provides the customer with the choice they seek in making payments in today's landscape. For more information or to register visit



Joe Casali, AAP, NCP


AUTHOR: Joe Casali, AAP, NCP
Executive Vice President

As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.




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