CHUCK Takes on Zelle With Alloy Labs, Payrailz Partnership

Community and midsize banking association Alloy Labs Alliance is launching CHUCK, an open network for instant payments to compete with Zelle, a payment network owned by the nation’s largest banks.

Alloy partnered with digital payments company Payrailz to launch the new payment network. The introduction of CHUCK gives financial institutions another option for instant payment capabilities, according to a press release on Tuesday (Dec. 21).

The open network offers customers the ability to send money from their banking app and gives the recipient the option of choosing where they want the money to go — even to some of the most popular payment networks. The process doesn’t require logging into multiple apps or moving funds between apps.

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“This is a network for community banks, by community banks. The first product we are launching is an innovative approach to peer-to-peer (P2P) payments,” said Julie Thurlow, CEO of Reading Cooperative Bank, a $730 million bank in Massachusetts that has played a leading role in advancing the CHUCK effort.

“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,” she added.

While launched by an alliance of community banks, the network will be made available to all financial institutions that are based in the U.S.

Read more: Even Same-Day ACH Too Slow for Consumers as Instant Payouts Rewrite the Rule

“We chose Payrailz not only because of their industry-leading technology but also because of their strategic and cultural alignment,” said John Schulte, chief information officer of Mercantile Bank of Michigan, which has $4.42 billion in assets and is headquartered in Grand Rapids.

Joel Westra, first vice president at American State Bank, an Iowa-based bank with $1.11 billion in assets, said community banks are indispensable to people and play an essential function in their lives, “… and that includes delivering the best digital experiences.”