Articles have been trumpeting the recently published data point that bank owned Person–to-Person (P2P) app Zelle is poised to outpace fintech P2P provider, Venmo in terms of number of users. TechCrunch was one of the publications picking up on this information:
Despite some concerns over its adoption by scammers, new payment service Zelle is shaping up to overtake rival Venmo this year, according to a new forecast from eMarketer. The firm expects Zelle to grow more than 73 percent in 2018, to reach 27.4 million users in the U.S., ahead of Venmo’s 22.9 million. Square Cash will trail with 9.5 million users.
I am not convinced that this really says anything about the state of the P2P market. It doesn’t speak to the number of active users on Venmo and it doesn’t account for the fact that many financial institutions automatically enroll their mobile banking customers into the Zelle feature. What may be a more interesting point is that for 2017, Zelle reported processing $75 billion and Venmo $34 billion and both are seeing high double-digit growth annually. Regardless of the source of the app, P2P is a mobile transaction type that consumers value and are interested in adopting:
Emarketer’s forecast estimates the total number of U.S. p2p mobile payment users will grow 30 percent in 2018 to reach 82.5 million people, or 40.5 percent of U.S. smartphone users. It also expects the total transaction volume of p2p mobile payments to grow 37 percent this year to reach $167.08 billion. By 2021, that figure will reach over $300 billion.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group