Zelle P2P network zooms past Venmo

The American bank-backed Zelle network processed 170 million person-to-person payments last year boasting an aggregate transaction volume of $55 billion, more than double that of PayPal-owned rival Venmo.

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Zelle P2P network zooms past Venmo

Editorial

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Run by Early Warning for its owners - Bank of America, JPMorgan, Wells Fargo, Capital One and US Bank - Zelle lets users send funds directly from their bank accounts to the recipients' using only an email address or mobile phone number.

The network now has 20 banks and credit unions onboard, and is poised to reach 85 million people through member apps this year. So far Bank of America, US Bank, and Wells Fargo have already embedded aspects of Zelle within their mobile apps, and more network banks are scheduled to launch in the second quarter.

The transaction figures demonstrate the power of big-bank backing. While Venmo has established itself as the most talked about P2P payments service in the US, its standalone app processed just $17.6 billion last year.

Thong Nguyen, president, retail banking at Bank of America., BofA, says: "With Zelle, we’ll collectively reach more US bank consumers than any other person-to-person payments network and deliver a faster, safer and easier payments experience that will enable our customers to live more convenient financial lives."

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Comments: (3)

A Finextra member 

Having once made a similarly embarrassing error in an article headline, I can sympathize with the author. But that in no way diminishes how amusing your comment is, David. Post-arithmetic, indeed! 

Gerard Hergenroeder

Gerard Hergenroeder Retired IBMer and Banking Executive at Payments Shark

This makes sense to me. Once the U.S. banks put their "will" behind something collectively success comes quickly. In the U.S. I expect Zelle and The Clearing House Faster Payments initiatives to be equally successful, overshaddowing the early Fintech start-ups.

 

 

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

@GerardHergenroeder:

+ 1. Banks may or may not do better digital than fintechs but they surely do more with digital than fintechs.

Ever since my bank launched its mobile wallet, it has become my go-to method of payment, ahead of the fintech mobile wallet I used to use before. HDFC Bank's PayZapp Ends My Bill Payment Woes  

One question: Fintechs use VC funding to offer digital services, even at a huge loss. As traction increases, their paper valuation goes up. VCs exit at handsome profits during the next round of funding. Everyone is happy. Life goes on, seemingly forever. In your experience in payments, will banks use their huge profits to fund similar loss-making digital services forever?

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