Zūm Rails Launches an Embedded White-Label Prepaid Cards Program for Canadian Businesses

Canadian fintech Zūm Rails early Thursday launched a reloadable prepaid card program on the Mastercard network for businesses in Canada, in which Zūm will serve as the card issuer. As the issuer, Zūm Rails says it can reduce by months the time it would take for businesses to launch such prepaid programs through a bank or fintech partners.

The white-label program, which is available in all Canadian provinces with the exception of British Columbia, is expected to help businesses increase customer loyalty and extend the reach of their brands. Zūm Rails says it is awaiting approval from the British Columbia regulator to start issuing cards in the province, which it expects to receive soon.

Businesses can use the cards to track employee spending, provide earned-wage access to gig workers, pay contractors, and disburse funds in “near real time,” the company says. Businesses can also issue the cards in conjunction with credit-building services to provide a new financial product for underbanked consumers.

“By removing the intermediary bank, we not only gain a significant economic advantage, but also the freedom to build more sophisticated software and tailor programs exactly to our clients’ needs,” Zūm Rails chief executive Miles Schwartz says by email. “This direct relationship allows us to design and control card programs without relying on third parties, ensuring faster innovation and greater value for our clients.”

Zūm Rails, which also plans to launch the card program in the United States, chose to become the card issuer and administrator of the program to expand the financial services it can offer through its open-banking and instant-payments platform.

“Today’s world is more digital, and, as a result, fintechs and businesses want to expand beyond their core offerings and provide bank-like services,” says Schwartz. “A physical branch is no longer required to be a bank. Look at the Starbucks card—if Starbucks were to formalize its stored-value program as a bank, it could rank among the top 15 U.S. banks in terms of deposits.”

Prepaid card programs that businesses can embed into their core service offerings enable them to turn “customer trust and engagement into financial utility and growth,” Schwartz adds.  

Zūm Rails’ customer base is split about equally between clients focused on prepaid card programs and secured credit-building cards. “Prepaid cards are ideal for faster payouts in the gig economy or for supporting newcomers to Canada with accessible financial tools,” Schwartz says. “Secured cards, on the other hand, serve credit-repair and lending companies looking to help their customers build or rebuild credit. When an individual pays back the secured credit card, we report it back to the credit bureau and [that] improves the individual’s credit.”