As reports about its vulnerability to fraudsters surface, US bank-backed P2P payments app Zelle says that it was used for 85 million transactions, moving more than $25 billion in the first quarter, up 15% on the same period last year.
Launched in 2016, Zelle is the banks' answer to Venmo, enabling Americans to send money to each other using just an email address or mobile phone number.
In addition to a standalone app, the service is being made available through participating banks' own apps, helping Zelle to quickly blast past PayPal's Venmo, which processed $12.3 billion in Q1.
"Zelle is replacing cash and checks for sending gifts for birthdays to distributing funds to those in need, changing how money moves safely for millions of consumers," says Paul Finch, CEO, Early Warning Services - the network operator behind Zelle.
However, recently, Zelle's security has come under the spotlight. According to a New York Times report, the service's ease and speed of use has seen many customers become victims of fraudsters.
The scale of the problem is not known. A PwC partner told the Times that she knew of one bank experiencing a 90% fraud rate but the company quickly backtracked on the outlandish claim. In contrast, Early Warning says "there are very few incidents" of fraud.
Meanwhile, as Zelle eats into Venmo's P2P business, the PayPal unit has been busy extending into commerce. In its quarterly results, PayPal says that the ability to pay with Venmo is now available at more than two million merchants across the US.