Zelle Has Monumental Year, Effectively Competes Against Venmo

Peer-to-peer payment platform Zelle had a strong 2019, handling $187 billion worth of payments via 743 million transactions last year.

Data also showed that year-over-year payment values increased by 57 percent, while transaction volume increased by 72 percent. The platform also reported its Q4 2019 results, which revealed it had processed 230 million transactions, leading to $56 billion in money sent — an increase of 14 percent and 17 percent quarter-over-quarter, respectively.

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The Zelle payment network is owned by a group of seven major US banks, including JPMorgan Chase, Bank of America and Wells Fargo, and currently has 766 financial institutions participating on the network, representing nearly 70 percent of all U.S. checking accounts. More than 100 financial institutions joined the network in Q4 alone.

“2019 was a monumental year, with one in two U.S. adults with a bank account gaining access to Zelle in their mobile banking app,” said Lou Anne Alexander, Chief Product Officer at Early Warning, which runs Zelle. “We achieved strong growth across the network including onboarding hundreds of national and regional financial institutions. We will continue growing and evolving Zelle with the hope that everyone with a bank account in the U.S. will have access.”

The report also showed that gifting and splitting shared everyday costs such as utilities, rent and meals, are the most common usages of Zelle, as well as sending money for birthday and holiday gifts. And P2P payments aren’t just for the younger generation. In fact, a Zelle survey found that more than half of first-time P2P service users were at least 45 years old, and 52 percent of Generation X and 46 percent of baby boomers said they “trust” P2P payments.

But Zelle’s growth hasn’t come without controversy. Late last year FinTech firms started accusing banks of blocking access to end users’ financial data. PNC Bank clients, for example, complained that they were unable to connect accounts to Venmo, which is owned by PayPal. Instead, PNC was suggesting that these clients switch to Zelle, which counts PNC as an owner.

While Venmo urged affected customers to tweet complaints, PNC defended its actions, saying that the issue occurred because multiple data aggregators attempted to sidestep PNC security protocols.