One of the fastest growing segments in the US over the past few years has been the peer-to-peer (P2P) payments space, which has given rise to a fragmented approach adopted by several leading lenders in the country. This strategy already looks obsolete, with as many as thirty US banks and credit unions opting for a new unified P2P service called Zelle.
The launch of Zelle will effectively supplant existing efforts amongst US banks, which for years have pushed to varying degrees for a more integrated P2P framework. With other groups also having success and making inroads into the US P2P space, such as Square, Venomo, and Apple Pay, Zelle looks to threaten the status quo and solidify itself as the paramount service in the banking space moving forward.
While many lenders routinely tout a range of new initiatives and ambitions regarding disruptive technology and other innovations, the future may be here sooner than many skeptics think, as Zelle will soon be made available across upwards of 86 million mobile-banking accounts, according to a recent Bloomberg report. Zelle will be recognized by its symbol, combining a ‘Z’ with a familiar ‘$’. Zelle’s launch will also coincide with its presence across many other mobile devices, allowing for the transfer of funds through the service.
As early as next week, myriad financial institutions will begin educating their clients about Zelle’s functionality and deployment, which will likely mirror that of traditional P2P services already in service. If early estimates in usage and scope are any indication, the service could have major repercussions across cash and check payments, according to estimates from bank-owned risk-management firm Early Warning Services, a group that oversees the network.
Zelle could also be inking partnerships with existing payments venues Visa and Mastercard, which could easily expand its user base to most US clients. The P2P service is hardly a new construct, as banks on the Zelle network have already processed more than 51 million transactions, totaling $16 billion in Q1 2017. The notable difference now is that customers will finally be able to send money in real-time via a wider selection of institutions, which could increase its use exponentially.