Banks ready to roll out ZellePay

The Big Banks Have Officially Released Zelle Into The Wild To Take On Venmo

Excerpt:

The hype around P2P payments has been fairly turned up over the last few years, and the upcoming battle between big bank-backed Zelle and PayPal property Venmo has certainly gotten quite a bit of attention on these pages and many others. But, curiously enough, when it came time for Zelle to make the great leap forward and out into the marketplace — its emergence yesterday was somewhat muted.

Bank of America announced yesterday that it is officially the first of the big banks to incorporate Zelle into its banking app. That means as of now, BoA customers will have the ability to transfer funds P2P and use the service to even split payments. “When Zelle rolls out among all the partner banks later this year, the platform will provide consumers a faster, easier way to send and receive payments in minutes without leaving the security of their own financial institution,” BoA noted in a release. And that partner banking network, for Zelle, certainly packs a notable punch.

All in all, nineteen banks have signed on for Zelle: BoA, Chase, Citigroup, Wells Fargo and U.S. Bancorp, among others, with one fairly simple objective: catch and pass Venmo in the P2P space. Zelle will most likely be incorporated into other partners in much the way the BoA integration went — as a feature within a bank’s own mobile app.

However, consumers will also have the option of a standalone Zelle payment app by the middle of the year. That app will work with any debit card — regardless of what bank issued it. The race with Venmo will be tough — and Venmo has a big head start, since it was first founded in 2009. It processed $17.6 billion in transactions last year, a 135 percent increase from the previous year. And Venmo’s base is almost inordinately fond of it. “That’s a huge advantage,” said Michael Moeser, director of payments at Javelin Strategy & Research. When presented with another option, ‘‘An avid Venmo user is going to ask, ‘Why do I need something else?’’’

But Zelle has a big advantage all its own — a cemented connection to the big banks where millions of Americans keep their money. Want to request $40 from a friend? Using Zelle means those funds hit the user’s actual bank account within minutes of the transaction.

A Venmo user, on the other hand, would see the funds in the Venmo wallet — but would then have to cash out the balance and wait for its arrival in order to actually turn it into cash. Venmo is working hard to fix that up — PayPal’s deal with Visa and Mastercard earlier this year makes it possible to move money over debit networks, and by the mid-year mark, it should be possible to cash out a PayPal account nearly instantly.

The launch of Venmo’s new competitor has been rolling out gradually — and the first phase will see bank payment apps incorporate Zelle’s options and basic design (though there will be no Zelle branding). Zelle is, in and of itself, a free service — though partner banks can chose to add a charge if they wish. (Few think they will because Venmo is free.)

Comment: Follow the trail: Zelle is a EarlyWarning function and EarlyWarning is owned by the biggest US banks

Early Warning is owned by Bank of America, BB&T, Capital One, JPMorgan Chase, and Wells Fargo

Advantage: Instant transfer of funds

Cash Faces a New Challenger in Zelle, a Mobile Banking Service https://t.co/LvMPwO4Ys5

— James Peet (@jrpeet) June 12, 2017

We use @PayPal for purchases and @Zelle for P2P fundshttps://t.co/NyLwna9BTs

— James Peet (@jrpeet) July 31, 2018

Above "the Venmo Line"

Money Isn’t Free, but Moving It Is Now Cheaper - Payment startups disrupt traditional cash-transfer firms by offering nearly instantaneous, zero-cost services

Excerpt:

Take Venmo, for example. Venmo is the Snapchat of money in that it’s wildly popular with 20-somethings and on college campuses, and yet it is so unlikely to be used by people older than 30 that internally, the company calls that age the “Venmo line.” Venmo’s mobile app makes it easy to pay friends for just about anything, usually things like rent or your portion of last night’s bender. In 2014, the company handled $2.4 billion in transactions, and it is growing so quickly that it did half that amount of business in the first quarter of 2015 alone.

The cost of using Venmo is zero. Early in the company’s history, this business plan, or lack of it, nearly killed the startup, but an acquisition by payments company Braintree (which was later purchased by behemoth PayPal) saved it. Like countless other newfangled payment services, including competitors Square Cash, Google Pay and even payments in Facebook Messenger, the reason Venmo can charge nothing is that payments within its network are just data bits moving around in a database somewhere, rather than dollars being moved between bank accounts.

Comment: See also: Quartz coins “the Venmo Line”: Reminding us that the under-30 crowd lives in a totally different digital world, Read what happens when a bunch of over-30s find out how Millennials handle their money, Venmo

Quartz’s editorial team stumbled upon a generational divide earlier today, describing the phenomenon “the Venmo line.” One one side of the line are millennials and their elders who value privacy and view digital services that threaten it with suspicion. On the other side are youthful, digital natives who view public sharing as foundational an element of their lives as breathing. Judging by Quartz’s unscientific data, this line appears to fall right around 30 years old

Comment: I've used Paypal and money transfer with both Wells Fargo and Capital One 360. The image above is from Logan's Run, where when one reaches the age of 30, they are vaporized. I was 27 when it came out in 1976