The recent performance of Zelle Network, the P2P payments platform with the funny name, is no laughing matter for competing P2P providers. Early Warning Services, a provider of real-time payments, authentication and risk mitigation services, announced April 17 that its Zelle Network processed more than 170 million P2P payments in 2016, totaling $55 billion in transaction value. By comparison, the popular PayPal-backed Venmo processed $17.6 billion P2P payments last year, according to PayPal’s annual report.
The Zelle Network currently includes 20 banks and credit unions, giving it access to approximately 85 million consumers in the U.S. through the mobile banking apps of its participating financial institutions, according to Early Warning. The joint venture is comprised of Bank of America, BB&T, Capital One, JPMorgan Chase, PNC, U.S. Bank and Wells Fargo.
Zelle’s recent success might have raised a few eyebrows in the industry. However, Sarah Grotta, director, debit advisory service, Mercator Advisory Group, is not surprised. “Banks and credit unions have been offering P2P solutions for many years and have built up a significant user base,” she tells Paybefore.
Grotta adds that Zelle will continue to help banks compete with the likes of Venmo, Square and Facebook because there will be consistency of brand and user experience across the financial institutions using Zelle. “This [helps] consumers understand that regardless of where the sender and receiver hold their [bank] balances, they can always execute a transaction,” she says. “When financial institutions sold P2P under separate identities, consumers didn’t get that message.”
Early Warning will be releasing a Zelle standalone app later this year. Consumers who don’t bank with one of the participating network partners can enter their bank debit card information to use Zelle, according to the company. Zelle enables payments to be sent, received and split using a registered mobile phone number or e-mail address.
“We’re on a mission to replace cash and checks with a faster, safer and easier way to pay,” said Lou Anne Alexander, group president, payments, Early Warning Services. “With more and more of the nation’s leading financial institutions joining the Zelle revolution, we’re making mobile payments ubiquitous, opening up new opportunities for an entire industry.”
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