From Mysterious to Mainstream: An Update on Zelle

Zelle has been called the banks' answer to Venmo, but for a while it seemed that nobody exactly knew the right questions to ask. Even after it made a big splash at Money20/20 in the fall of 2016, some major questions remained.

From Mysterious to Mainstream: An Update on Zelle

From Mysterious to Mainstream: An Update on Zelle

Erin M. Sarris

Erin M. Sarris

Erin M. Sarris is the managing editor of n>genuity journal. With more than 10 years of experience in payments, she oversees all aspects of the publication to ensure it covers a variety of topics related to financial services.

More Info

Zelle has been called the banks' answer to Venmo, but for a while it seemed that nobody exactly knew the right questions to ask.

Even after it made a big splash at Money20/20 in the fall of 2016, some major questions remained. How would it differentiate itself? Would it offer a less clunky user experience than its predecessor, clearXchange? Would financial institutions get behind the brand?

One thing was clear, however – there was pent-up demand for a major P2P solution to take hold. Experts predict more than 126 million adult consumers worldwide will make a mobile person-to-person (P2P) transaction by 2020.

And today, the big picture about Zelle seems a bit more in focus. Here are four important updates that have developed since its launch:

The brand is getting big

If you watched the NFL's 'big game' this year, chances are you saw Zelle's 60-second commercial featuring a quirky cast of characters (including Hamilton's Daveed Diggs), along with catchy rhyming as part of a spoken-word poetry dialogue.

It's not often we 'payment geeks' see anything related to our industry on national TV, let alone the most popular sporting event of the year. Billing itself as "the new way to send money from your banking app" in its commercial spot, Zelle claimed its place among other major consumer-facing companies.

It also silenced many of the questions about whether it can garner the brand awareness it needs.

You probably already have it

For customers of Bank of America, Chase, BBVA Compass, Capital One, KeyBank, PNC, U.S. Bank, Wells Fargo and many more, the functionality is already embedded in their banking apps – no separate download necessary.

Zelle has reported that more than 95 million customers now have access to the payment service. Compare that with Venmo, which has 3.5 million users – albeit much of them the coveted millennial generation. Which perhaps begs another question – will Zelle's user demographic be more diverse, age-wise, than Venmo?

Either way, adoption is ramping up. Zelle transferred $75 million in 2017 and boasts 100,000 new enrollments per day.

The Demand for a Major P2P Solution

Real-time is a major selling point

Zelle differentiates itself mainly by offering practically real-time transfers, with payments pushed from the initiating financial institution to the receiving one. Enrolled recipients have funds credited to their accounts in minutes, giving Zelle a leg up on other P2P products that use the rails of the Automated Clearing House (ACH).

Addresses security concerns for older cohorts

Some of the biggest critiques of P2P payments involve perceived security risks. In a recent study by TSYS, those 65 and older had the greatest concern about security, at 45 percent, compared to 29 percent of the 18-24 age group. The fact that Zelle is backed by the country’s leading banks will certainly help allay security concerns – and potentially drive increased adoption.

The formula for adoption? It's the convenience of not having to enter account information plus the confidence of personal information being protected by a bank consumers are already using.

In just a little more than a year's time, the P2P market – specifically the prospects for Zelle – has changed wildly. See how far Zelle has come by clicking here.

The statements and opinions of the writer do not necessarily reflect those of TSYS.

Other Articles by Erin

Erin M. Sarris

Erin M. Sarris is the managing editor of n>genuity journal. With more than 10 years of experience in payments, she oversees all aspects of the publication to ensure it covers a variety of topics related to financial services, including mobile, B2B and emerging technology.

Erin has written for publications of The Chicago Tribune, RedEye and Metromix.com, as well as The Washington Post's Retirement Living, TV Guide, Washington Spaces, Columbus Valley Parent and The Peoria Journal Star. She graduated from Bradley University with a bachelor of science in political science and communication, and from Columbus State University with a master’s in business administration.

Share this story via email or social networks