Big Banks Declare War on Venmo

by Sarah Grotta 0

The bank roll out of Zelle, the newly branded ClearXchange product from Early Warning has begun. Bank of America publically announced the launch of their Zelle P2P app. From Bloomberg News:

Nineteen banks, including Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo, are teaming up to start Zelle, a website and app that will let users send and request money much as Venmo does. Bank of America says it is the first to incorporate all of Zelle’s capabilities—including the ability to split bills between users—into its own mobile app, starting today. A standalone Zelle payment app should be available to anyone with a debit card, regardless of where he or she banks, by the middle of the year.

Zelle is taking aim at Venmo, PayPal’s very popular P2P solution in hopes that Venmo doesn’t attract core, mainstream banking clients:

“This is a great time for us to move [person-to-person payments] from millennials to mainstream,” said Lou Anne Alexander, Early Warning’s group president for payments. The use of mobile banking apps is expanding exponentially, creating many more opportunities for people of all ages to send and request money. “Any place we see checks and cash, that’s our target,” she said.

Zelle has the product advantage of offering a real-time solution where the recipient will receive their funds within seconds. Venmo requires additional steps and time for user to actually get their hands on their money. But, Venmo has been in market for years, has attracted younger, early adopters and has cemented the market price point for P2P service at “free”

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

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