Another day, another Venmo competitor. This time we might actually have something worth looking at, though. Zelle — a payment network developed by Early Warning and built on top of ClearXchange — has been announced with integrated support for many different banks and their respective applications, including Wells Fargo, Bank of America, US Bank, CitiBank, and Chase (among a huge list of others). These days everyone seems to think they can edge out Venmo, but with bank integration, Zelle might actually be able to do it.
Venmo has been a pretty big success, if for no other reason than because it was one of the first big mobile P2P payment services to launch. It was so successful that PayPal decided to pick it up last year. But PayPal is also the largest drawback to using Venmo. There are no small number of horror stories out there that stem from dealing with PayPal, and they've built a reputation for both ease of use and a total lack of customer support. The biggest advantages to Venmo have been the widespread acceptance of the service, the simplicity of it, and the lack of fees for non-credit transfers. But, with the support of so many major banks, integration into banking apps, and no fees in itself, Zelle is able to address each of those advantages, bringing some real competition to the P2P mobile payment space.
As of yet, I can't test the service, because it doesn't appear to have gone live on any account I have. Different banks have different dates set for Zelle integration to go live, but the consensus seems to be soon. Some banks, like Chase, are requiring that users manually enroll in the service to use it, while others like Wells Fargo and US Bank plan on rolling support into their apps and site over the coming weeks.
Either way, having the ability to transfer cash to any friend with a supported bank account will be convenient, and that immediately increases the number of people supported by the service over Venmo. Zelle is even not charging any fees of their own, though it is possible the banks might try to impose their own. Any added costs might make Zelle dead in the water when compared to other services like Venmo or Facebook's Messenger payments, so I hope the banks joining the Zelle network can satisfy themselves with the ridiculous fees they already impose.
Each supported bank has their own plan and schedule for Zelle support, so you'll have to check with them for precise details. The full list of banks that have announced support of Zelle is below:
Beginning this week, and continuing on a rolling basis over the next 12 months, Zelle will become available in the mobile banking apps of more than 30 participating financial institutions, including (listed alphabetically); Ally Bank, Bank of America, Bank of Hawaii, Bank of the West, BB&T, BECU, Capital One, Citi, Citizens Bank, Comerica Bank, ConnectOne Bank, Dollar Bank, Fifth Third Bank, FirstBank, First Tech Federal Credit Union, First Tennessee Bank, First National Bank, Frederick County Bank, Frost Bank, HomeStreet Bank, JP Morgan Chase, KeyBank, M&T Bank, MB Financial Bank, Morgan Stanley, PNC Bank, SchoolsFirst Federal Credit Union, Star One Credit Union, SunTrust Bank, TD Bank, USAA, U.S. Bank, and Wells Fargo.
PRESS RELEASE
Zelle℠ Now Live! In Mobile Banking Apps Today, a New Way to Pay
Zelle Changes the Way Money Moves - Makes Sending Money Digitally to Friends and Family Fast, Safe and Easy for More than 86-Million Mobile Banking Consumers
SCOTTSDALE, Ariz., June 12, 2017 – Beginning this month, more than 86-million U.S. mobile banking consumers will be able to send and receive money through Zelle – a new person-to-person (P2P) payments network from bank-owned Early Warning Services. Changing the way money moves, Zelle allows for funds to be sent from one bank account to another in minutes, using only a recipient’s email address or mobile number. “Send Money with Zelle” is conveniently available within the mobile banking apps of Zelle Network℠ participants – a network, which includes banks and credit unions of all sizes. With no additional app to download, Zelle will make digital payments a fast, safe and easy alternative to checks and cash.
Beginning this week, and continuing on a rolling basis over the next 12 months, Zelle will become available in the mobile banking apps of more than 30 participating financial institutions, including (listed alphabetically); Ally Bank, Bank of America, Bank of Hawaii, Bank of the West, BB&T, BECU, Capital One, Citi, Citizens Bank, Comerica Bank, ConnectOne Bank, Dollar Bank, Fifth Third Bank, FirstBank, First Tech Federal Credit Union, First Tennessee Bank, First National Bank, Frederick County Bank, Frost Bank, HomeStreet Bank, JP Morgan Chase, KeyBank, M&T Bank, MB Financial Bank, Morgan Stanley, PNC Bank, SchoolsFirst Federal Credit Union, Star One Credit Union, SunTrust Bank, TD Bank, USAA, U.S. Bank, and Wells Fargo.
In addition to working directly with financial institutions, Early Warning has established strategic partnerships with some of the leading payment processors –– CO-OP Financial Services , FIS, Fiserv, and Jack Henry and Associates. These relationships will allow millions more to experience Zelle through community banks and credit unions.
“Fragmentation has been frustrating for consumers. Inconsistent experiences, have made it difficult to send and receive money between banks,” said Paul Finch, Chief Executive Officer, Early Warning Services. “Zelle unites the financial community behind a single, real-time P2P payments experience for millions of consumers. Together, we are removing friction from finance, allowing money to move seamlessly between accounts in minutes. This revolution in money movement will create for consumers a viable alternative to checks and cash.”
WATCH: Industry leaders talk about Zelle’s impact on the P2P payments industry. Click here.
Moving P2P Payments from Millennials to Mainstream
In May 2017, Javelin Strategy & Research reported explosive growth in digital (PC/laptop or mobile) P2P payment usage from 62 million consumers in 2013 to 84 million in 2016. An estimated 129 million consumers will use P2P services in 2021 (Moeser, Michael, Making Payments Faster: The $20 Trillion Opportunity, May 2017). As consumers get increasingly comfortable with using digital channels as a cash and check alternative in daily commerce, Zelle is well positioned to drive P2P payments to the mainstream.
“The consumer P2P market is experiencing rapid growth and financial institutions have a critical role to play,” said Michael Moeser, Director of Payments, Javelin Strategy & Research. “There is a market opportunity to offer a secure and trusted experience, as well as have greater P2P availability in financial institutions’ digital banking, mobile wallets and voice-driven P2P services.”
In Q1 2017, more than 51 million transactions flowed through the Zelle Network, totaling more than $16 billion. The Zelle Network, built on the foundation of the clearXchange® Network, experienced 39% year-over-year growth in transaction volume. In 2016, a staggering $55 billion in P2P payment transactions were processed by financial institutions participating in the Zelle Network.
Millions more consumers, including individuals at non-participating banks, can experience Zelle through a standalone Zelle app in the coming months. Through partnerships with MasterCard and Visa the Zelle app will enable the customers of participating financial institutions to send money to, and receive money from, nearly anyone with a U.S. based debit card.
Brought to you by Early Warning, an innovator in payment and risk management solutions, Zelle℠ makes it easy, fast and safe for money to move. The Zelle Network℠ connects the nation’s leading financial institutions, enabling consumers to send faster person-to-person payments to nearly anyone with a U.S. bank account. Funds are available directly in consumer bank accounts generally within minutes. To learn more about Zelle and its participating financial institutions, visit http://www.zellepay.com.
About Early Warning Services
Creating the Future of Payments™ - Early Warning delivers innovative payment and risk solutions to financial institutions nationwide. For over 25 years, Early Warning has been a leader in technology that helps money move easy, fast and safer. Learn more at earlywarning.com.
Source: Wells Fargo, US Bank, Citibank, Chase
