Years ago, Janis Weiss became an early adopter of person-to-person payments, which allowed her to send and receive money with her smartphone. She has used them routinely — from sharing the cost of a Mother’s Day gift with her sister to paying back a friend for dinner.
Now, she’s part of ZelleSM “nation” — an expanded person-to-person (P2P) digital payment network that covers more than 86 million U.S. customers — thanks to Wells Fargo and more than 30 other financial institutions that are launching Zelle. Through its broad reach, the service allows customers to send money via desktop, smartphone, or other mobile devices to virtually any financial institution or credit card customer in the U.S., with funds typically available within minutes.
Weiss, a Wells Fargo customer, said the move to Zelle has been seamless from Wells Fargo SurePaySM — no extra download or registration needed. Wells Fargo upgraded SurePay months ago to the Zelle capability; now it plans to officially take on the Zelle name June 24.
“It is so easy to send money to people; I don’t even need to know what their banks are,” said the former Silicon Valley marketer. “All I need is the email address or cell number associated with their account. It’s something that is already part of my routine; I don’t even have to think about it.”
The June debut of the Zelle NetworkSM marks a milestone for the banking industry in its effort to bring mobile and online P2P payments into the mainstream, establish Zelle as the secure payment channel of choice for consumers, and compete with other commercial P2P services already in the marketplace.
“The consumer P2P market is experiencing rapid growth, and financial institutions have a critical role to play,” said Michael Moeser, director of payments for Javelin Strategy & Research, a leading financial technology research and advisory firm. “There is a market opportunity to offer a secure and trusted experience as well as have greater P2P availability.”
Evolving, and disrupting, P2P services
Wells Fargo brings 28 million digital banking customers to Zelle — making it one of the largest groups of customers in the Zelle consortium, which includes Bank of America, BB&T, Capital One, JPMorgan Chase, PNC Bank, and U.S. Bank. The group created the Early Warning Services company five years ago to launch and manage Zelle’s predecessor — clearXchange, the first industrywide P2P service. Like Wells Fargo with SurePay, each member created its own P2P service that linked to the clearXchange network.
Leading up to the launch of Zelle, Wells Fargo implemented a number of improvements to SurePay, said Brett Pitts, head of digital for Wells Fargo Virtual Channels. They included faster transaction speed; the addition of a “Request Money” feature; and a cleaner, simpler user interface that makes it easy to identify the transaction recipient.
“The rollout of Zelle at banks across the country represents an advance in the speed, connectivity, and security of P2P payments,” Pitts said. “We’re so excited for more of our customers to discover Zelle in the weeks and months ahead.”
Through its convenience, security, and expanded footprint, Zelle has a compelling appeal to busy consumers, said Paul Finch, chief executive officer of Early Warning Services.
“Zelle unites the financial community behind a single, faster P2P payments experience for millions of consumers,” Finch said. “Together, we are removing friction from finance, allowing money to move seamlessly between accounts in minutes. This revolution in money movement will create for consumers a viable alternative to checks and cash.”
Zelle should be a formidable competitor against Venmo and other fast-growing P2P players, which have become well known in social media for their use of emojis and other interactive features, said Moeser, the Javelin analyst. Citing a 2016 Javelin survey, he noted consumers are far more interested in P2P convenience and ease of use than they are in social sharing features.
“A new P-to-P service such as Zelle will not be handicapped by the lack of social media integration or failing to offer users the ability to paste pizza emojis into their payment transfers,” he said in a Javelin blog post. “It will, however, require Zelle to be successful in other areas, such as cross-bank ubiquity, ability to send money in real time to almost anyone, and providing an intuitive experience … all features it has built into its launch product.”
For Weiss, the Wells Fargo customer, the ultimate appeal of Zelle comes from its familiarity and security. She was never totally comfortable with using third-party P2P services in the past, she said.
“It made me nervous,” Weiss said. “I was always concerned about having to put my bank information into a third-party system, knowing how often breaches seem to occur these days. For me, it’s better to use a system attached to my bank because it’s familiar and more secure. That makes a real difference.”