Zelle Shifts Focus

Zelle is shifting its focus from a standalone mobile app to integration within banking apps and websites. The company, owned by a consortium of seven banks including Bank of America, Capital One, Chase, PNC, Truist, U.S. Bancorp, and Wells Fargo, aims to streamline transactions for users through financial institutions.

Initially launched in 2017 with an emphasis on the mobile app, Zelle now sees only about 2% of its transactions processed via this platform. The app is being repurposed to educate customers on scams, fraud, and highlighting participating firms on the Zelle network.

According to Elisa Tavilla, Director of Debit Payments for Javelin Strategy & Research, Zelle has broad adoption by consumers and financial institutions. It makes sense that Zelle would transition away from a standalone app as most users access it through their mobile banking experiences.”

Booming Business

Early Warning Services announced in April 2024 that Zelle had 143 million enrolled users and facilitated nearly $481 billion in transactions during the first half of the year. This marks a 28% increase from the previous year, with transaction volumes growing by a similar rate.

In comparison, Venmo, owned by PayPal, processed approximately $69 billion worth of payments in the first quarter of this year, showing only 8% year-over-year growth despite having launched earlier in 2012.

However, Javelin Strategy & Research indicates that Zelle still has potential for expansion. The report notes that among users sending money via peer-to-peer services, 51% use PayPal, 32% use Cash App, and 25% use Venmo, with only 21% reporting the use of Zelle through online or mobile banking.