In their quarterly announcements, Bank of America reported that their person to person (P2P) solution Zelle is doing quite well, with growth exceeding 130% over last year. MarketWatch provided some more details regarding the announcement:
Bank of America said in conjunction with its first-quarter earnings report Monday that it processed 29 million peer-to-peer payments during the quarter through Zelle, a joint platform that many big banks use to let customers send and receive money from friends who belong to any participating bank. That marked 130% growth from a year earlier and represented $9 billion in volume.
A couple of other points were made in the article which deserves highlighting. P2P growth is occurring across the board with the bank and with Fintech organizations like PayPal and PayPal’s Venmo. P2P is reaching the stage of a mainstream banking product. And P2P payments are expanding far beyond a money movement tool for millennials. Like when parents and grandparents starting using “The Facebook”, P2P transactions are now being adopted by old people too:
By introducing their own peer-to-peer option, the big banks aren’t necessarily out to destroy PayPal and Venmo. During Bank of America’s conference call Monday, Chief Executive Brian Moynihan cited Zelle in response to a question on how the company’s digital initiatives were helping to cut costs.
Zelle and peer-to-peer payments are “getting more meaningful,” he said, and are just one way the company is working to displace cash and checks, which are costly for banks to process and handle. Things are “not going to be immediately changed,” he contended, but Bank of America is taking some steps in the right direction.
The various peer-to-peer offerings serve different types of users, and it’s likely that winning in this space won’t be a zero-sum game, especially when Americans are spending trillions of dollars in cash each year.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
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