Community Banks Launch Chuck, Their Own Peer-to-Peer Payments Network

A new competitor in the peer-to-peer payments landscape emerged Wednesday with the introduction of CHUCK, an open-loop P2P network founded by 10 community banks. The new network uses technology from digital payments platform provider Payrailz that enables customers of any of the member banks to send money to a debit card or bank account outside the CHUCK network, as well as within it. 

The 10 founding bank members of CHUCK are part of the Alloy Labs Alliance, a consortium of community and mid-size banks that work together to develop and bring new ideas to market. Payrailz is a provider of digital payment technology that banks can white-label. CHUCK will be made available to all banks in the United States.

“CHUCK is a network name like Visa or Mastercard,” says Jason Henrichs, chief executive of Alloy Labs Alliance, in an email message. “Banks can add their own branding to the network. We are also plugging in other networks and payment rails. Just as you would change out the drill bits in a drill (using a chuck), we can add and change out the rails.”

Consumers initiating payments through CHUCK can send them in real time or next day. Payrailz enables the transfer of funds outside the CHUCK network using a variety of networks, such as the automated clearing house and debit networks, to make CHUCK ubiquitous. That ubiquity is what differentiates CHUCK from other P2P networks such as Zelle or Venmo, says Mickey Goldwasser, vice president of marketing and chief of staff for Payrailz.

“With CHUCK, a consumer doesn’t have to send money to someone who also has an account at a bank that is a member of the network,” Goldwasser says. “That’s what makes it an open-loop network. The banks behind CHUCK wanted an alternative to Zelle, and they created something that caters to them.”

The member banks participating in the launch of CHUCK are American Bank NA, of Le Mars, Iowa, American State Bank of Sioux Center, Iowa, Chesapeake Bank of Kilmarnock, Va., Citizens & Northern Bank of Wellsboro, Penn., First Northern Bank of Dixon, Calif., Five Star Bank of Warsaw, New York, Mercantile Bank of Michigan in Grand Rapids, Mich., Reading Co-Operative Bank of Reading, Mass., Savers Co-Operative Bank of Southbridge, Mass., and Union Bank of Morrisville, Vermont.

“This is a network for community banks, by community banks,” Reading Cooperative Bank chief executive Julie Thurlow says in a prepared statement. “The first product we are launching is an innovative approach to peer-to-peer (P2P) payments. We have an extensive roadmap of applications that will provide community banks with the fast, flexible infrastructure they need to remain competitive over the long term.”