Bank of America, Venmo and Zelle have all reported data recently on their respective person-to-person (P2P) transaction. The following takes a look at all three announcements to see what we can tell about the state of the market beyond the point that it’s showing great adoption rates.
- Early Warning reported Zelle Q1 2019 volumes of $39 Billion on 147 Million transactions for an average transaction amount of $265. The processes volume is up 54% over Q1 in 2018.
- A subset of the Zelle volumes includes activity from Bank of America. They reported 58 million transactions and $16 Billion in volume from 5.4 million users. So doing the math, Bank of America was 41% of Zelle’s dollar volumes.
- We don’t have the same details from Chase bank, but we do know that they have 40% more active users than Bank of America. (7.6 million in Q1 2019).
Two take-aways here:
- The overwhelming Zelle volume belongs to Chase and B of A customers.
- The average transaction amount is coming down as consumers use Zelle for more varied use cases, including gifts to other consumers. Chase responded to this use case by rolling out the opportunity to use Zelle to buy gift cards.
- Venmo also reported recent P2P numbers for Q1. Their 40 million active Venmo users (used Venmo at least once in the last year) generated $21.3 in processed volumes. Venmo still does not make money, but monetization is an important focus for Pay Pal. They look to make money on an optional, faster cash-out solution that charges a fee and also by allowing balances to be used to make purchases which generates interchange income.
- Square disclosed little about the Square Cash App, other than to they have 15 Million active users. Like Venmo, offer the opportunity to store funds and use the app to make purchases.
The take-away here:
- The non-bank solutions are still showing fantastic growth.
- Soon, Venmo and Square Cash App won’t really be considered as much P2P apps as they will be prepaid debit cards. The distinction means little to the consumer, but it means everything to the regulatory treatment.
Here’s a snapshot of recent reported growth from Venmo and Zelle:
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group