P2P Study: Zelle Growing, Brand Recognition Is Not

Peer-to-peer player Zelle Network processed more than 100 million transactions in the first six months of 2017 and is racking up thousands of new users a day, but customers of rival Venmo have hardly heard of it, according to two new reports.

According to a release from Zelle this week, banks and credit unions in its network have seen up to 300% increases in new customer enrollments since June, and more than 50,000 people on average are enrolling daily. Users moved $33.6 billion in the first half of the year, it said. The average financial institution saw a 50% increase in enrollments since June. 

The Phoenix-based company competes against P2P players such as Venmo, Dwolla, Square and even Apple, which announced in June that its new mobile operating system, iOS 11, will allow users to make person-to-person payments directly through the instant messaging feature on their iPhones, iPads and Apple Watches.

Despite the growth, few people know what Zelle is, according to a study released in July from student loan company LendEDU. It found that 94% of 500 Venmo users it surveyed had never heard of Zelle and 63% said they had no plans to try it. However, 57% of Venmo users did say they would feel more secure making peer-to-peer payments with an app supported by their bank.

“Getting consumers to move away from Venmo and towards Zelle is going to be a challenge for the new P2P payment app,” the study said. “Venmo works fine, is easy to use, and has a social media flare to it that appeals to users, especially millennials. Venmo has become so ingrained into our society that the word ‘Venmo’ has become a verb, similar to the way people say ‘just Google it.’”

“Venmo users using a mobile payment platform would feel more secure using Zelle, an app supported by the banks, over Venmo. But, that does not mean security is a huge selling point for consumers, and even if it was, users are not overly concerned with Venmo’s security safeguards. More than three-quarters of respondents said they were not worried about their information getting stolen on Venmo,” it added. 

Zelle has been available inside the mobile banking apps of several major banks for some time, but this week the company released a stand-alone mobile app in the App Store and on Google Play. It allows almost anyone with an account-issued debit card to send money in real-time through Zelle.

“Together with our bank and credit union partners we set out to make it easy, fast, and safe for consumers to send and receive money from almost anyone,” said Paul Finch, CEO of Early Warning Services, which owns Zelle. “Our partners are revolutionizing banking, reducing friction from finance, and making it convenient to send money in the moment. The Zelle App is a perfect complement to the network banks and credit unions as it allows their customers to reach millions more with the power of Zelle.”

Zelle Network is a subsidiary of Early Warning and is owned by Bank of America, BB&T, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank and Wells Fargo. CO-OP Financial Services is processor partner with Zelle, as is FIS, Fiserv and Jack Henry.

Zelle launched in October 2016. That year, it processed 170 million payments totaling $55 billion.

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