As more big banks start to integrate Early Warning’s person- to- person (P2P) payment solution, Zelle, the comparison to PayPal’s Venmo product is inevitable. One of the questions raised is if Zelle will ever overtake Venmo. CrowdFund Insider reported:
Zelle is entering the game a bit late since Venmo started in 2009. In economic terms, Venmo by far has the first mover’s advantage — people are already accustomed to “Venmoing” each other payments for rent, dinners, and carpools.
The Chicago Tribune reported that Venmo “processed $17.6 billion in transactions last year”, which is “a 135 percent increase from the previous year.”
So how is Zelle to successfully enter the competition late?
The truth of the matter is that financial institutions have been providing P2P services for over a decade. It has been occurring through internally developed solutions, ‘pay anyone’ bill pay services, plus processor provided services such as Popmoney and People Pay. Bank volumes far exceed the reported Venmo figures, as remarkable as they may be. Where Venmo has succeeded is in the effective and consistent marketing that assures users that they can use the service to pay anyone. As Zelle and its bank and credit union customers roll out a consistent user experience and marketing strategy, they may level the playing field. Of course there isn’t anything preventing a banked individual from using both Venmo and Zelle.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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