There’s a new and interesting entrant into the mobile and online payments market in the US that has directly got PayPal, and it’s millennial payments service Venmo, in its sights. It’s called Zelle (don’t ask me how you say that) and it’s backed by a group of US banks and financial services corporations.
So far 13 US banks and credit unions have added support for Zelle in their own mobile apps and apparently 17 more have plans to connect with Zelle in the not to distant future. The Zelle app will be launching this week.
Who are the backers? Banks already involved include the Bank of America, Wells Fargo and JPMorgan Chase. Payments can be made also using MasterCard and Visa debit and credit cards. Zelle’s new smartphone app will allow users to send and request money to and from their contacts, using only their phone number or email.
So what makes it distinct? Of particular note, is the feature that money will automatically hit the recipient’s bank account without any need for an additional step to withdraw the funds, if they bank with an institution in the Zelle network. That’s definitely going to be attractive to people who want to get their hands on the cash ASAP.
And, it’s reported, that already the new product and functions are proving popular with users with 50k people joining up per day in the past few weeks. That’s pretty impressive.
It’s interesting that a group of banks and credit unions has come together to create what is very obviously positioned as a challenger to PayPal. Banks and others were very slow to appreciate the potential of online and mobile payments and now, to some extent, they are playing catch-up. But with the millennial generation increasingly calling the shots there is a ripe opportunity for developing and delivering new innovative services. We’ll see if the Zelle app fits that bill in due course.