Will Zelle Eliminate the Wrinkles and Challenge Venmo?

This article in Business Insider suggests that Zelle is on a roll with 65,000 new Zelle enrollments daily and more than 60-million real-time person-to-person (P2P) payments totaling more than $17.5 billion. We fully recognize the impressive enrollment rate but are a tad baffled by the $17.5 billion given that Zelle has refused to transfer money between any Mercator analysts after accepting our enrollment:

“A year after its unveiling at Money20/20, Zelle returns to the “Ball” with significant momentum behind its banking industry-led, real-time mobile payments network. Zelleenables money to move from one bank account to another typically within minutes, using only an e-mail address or a mobile phone number. In Q3 2017 (July – Sept.) Zelle payments surged, with an average of 65,000 consumers enrolling daily, resulting in the network processing more than 60-million real-time person-to-person (P2P) payments, valued at $17.5 billion.

This success comes as the number of financial institutions in the Zelle Network grows to more than 50, including new participants, America First Credit Union,Bank of Central Florida, Bank of York, City National Bank, Collins State Bank, First National Bank of Central Texas, Guadalupe National Bank, Huntington Bank, Provident Bank, Quontic Bank™, Regions Bank, Renasant Bank, Seacoast National Bank, Surrey Bank & Trust, and United Bank. Already 13 financial institutions are currently live with Zelle, with more launching weekly.”

Perhaps these stats are driven by the fact that Zelle is deployed by several of the largest banks, including Bank of America, BB&T, Capital One and Chase, to name just a few. It is also possible that Zelle’s real niche is in corporate disbursements more than it is P2P, although it is also unclear what volume was disbursed by Zelle versus “other payment tools:”

“ ‘Early Warning’s Zelle and other payment tools allowed the Red Cross to distribute emergency financial assistance donated by the general public in a fraction of the time,’ said Steve Casey, treasurer at the American Red Cross.  ‘The team at Early Warning was pivotal in helping the Red Cross progress from concept to execution, and while we have more work to do drawing from lessons learned, we are excited that the Red Cross can help families so quickly on such a large scale.  We could never have provided this financial assistance without the compassionate outpouring of financial donations from the public.’  ”

Having so many captive banks will certainly help Zelle grow fast, but it continues to have a few bugs that need to be ironed out.

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

Read the full story here

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