Early Warning Systems announced new growth numbers for fourth quarter 2018 for person-to-person app Zelle. Here’s the quick summary of the data points:
- Zelle processed $35 billion and 135 million in transaction volume.
- For the full year 2018, that makes $119 billion and 433 million in transactions
- There are now 60 banks integrated to Zelle reaching 58% of U.S. checking accounts
- An additional 169 financial institutions have signed commitments to also join Zelle
The average transaction value for a Zelle transaction has steadily declined in 2018 from $294 in Q1 to $259 this past quarter. That is a trend that will continue as consumers find more everyday uses for the product. Interestingly enough, the fastest growing demographic for Zelle are from the baby-boomer generation.
PayPal has an earnings announcement next week and hopefully they will shed some light on their Venmo volumes so we can get a broader view of the P2P market. I suspect that they will post strong numbers as well for fourth quarter. One reason for the strength of fourth quarter for P2P, beyond net new growth, is the prevalence of using P2P for giving gifts.
Early Warning is increasing its client base beyond that of its large-bank owners to smaller community banks and credit unions. This is most often managed through partnerships with core providers like FIS, Fiserv and JackHenry:
Zelle is not just for large national banks. Eighty five percent (85%) of participants in the Zelle Network are regional and community banks or credit unions with assets less than or equal to $10 billion, while 77% of participants list assets less than or equal to $1-billion. Together, participants are helping more than 100-million consumers replace checks and cash for the convenience and speed of person-to-person (P2P) payments.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group