Zelle appears to be winding down transactions on its mobile app, urging its customers to focus exclusively on using the payment platform through banking apps and sites.
The strategy makes a great deal of sense given that Zelle is owned by a consortium of seven banks: Bank of America, Capital One, Chase, PNC, Truist, U.S. Bancorp, and Wells Fargo. They operate Zelle under the umbrella of a company called Early Warning Services LLC.
When Zelle launched in 2017, the group’s marketing focused to a great extent on the mobile app. The idea was to enlist users whose financial institutions had not yet joined the network. But now more than 2,200 banks and credit unions are connected to the Zelle network.
As a result, only 2% of Zelle transactions currently take place through the mobile app. The app is being retooled toward educating consumers about scams and fraud and providing them with a list of participating firms on the Zelle network.
“Today, Zelle is broadly adopted by both consumers and financial institutions,” said Elisa Tavilla, Director of Debit Payments for Javelin Strategy & Research. “Zelle is seamlessly incorporated into most banks’ and credit unions’ mobile banking apps. It makes sense that Zelle would shift away from a standalone app, given most consumers use Zelle as part of their mobile banking experience.”
Business Is Booming
Early Warning Services announced last month that in the first half of 2024 Zelle had 143 million enrolled users and helped consumers and small businesses move nearly a half-trillion dollars. The $481 billion total of payments was up 28% year over year. Transaction volume on Zelle increased by a similar rate of 27% year-over-year, with 1.7 billion transactions sent across the network.
Although precisely comparable figures are not available, Venmo, the chief rival to Zelle, processed $69 billion worth of total payment volume in the first quarter of this year. Venmo, owned by PayPal, showed year-over-year growth of 8%, significantly slower than Zelle’s rate. Venmo was introduced to the public in 2012, giving it a five-year head start on Zelle.
Yet research from Javelin Strategy & Research shows that Zelle still has room to grow. According to Javelin’s 2024 North American Payments Insights, among those sending money via peer-to-peer services, 51% used PayPal, 32% used Cash App, and 25% used Venmo, Meanwhile, 21% said they had used Zelle through online or mobile banking.
