On Wednesday, Bank of America announced it has launched Zelle, available to customers who use the finance industry giant’s banking app.
“Bank of America becomes one of the first banks to incorporate the benefits and features of the Zelle experience, a revolutionary new P2P service, within its mobile banking app,” the bank said in a news release on its website. “The new experience makes it easier for clients to send, receive and request money, allowing them to use the existing contacts on their mobile device to securely transfer money to (or request money from) almost anyone within minutes, regardless of where they bank.”
Zelle will eventually be rolled out to 18 more of the banking industry’s biggest organizations, including Citigroup, JPMorgan Chase and Wells Fargo.
Zelle is often referred to as “the Venmo killer” as it is the banking industry’s response to the Peer-to-Peer (P2P app that allows anyone to send and receive money from anyone.
The app is hugely popular, particularly with the millennial generation, and opened for business in 2009. PayPal Holdings Inc. owns Venmo which processed $17.6 billion in transactions last year alone. That total was a 135 percent increase over the year before.
The downside to Venmo is the amount of time it takes to turn the transfer into actual cash. Similar to depositing a check, it takes a couple of days for the funds to become available to the client. PayPay and Venmo are said to be working out a solution to speed up that process.
But Zelle already eliminates that waiting period and funds are available in the recipient’s bank account within minutes of the transaction. Also, Zelle users can split expenses, say, for a dinner check. They can even add a personal note to the transaction.
It remains to be seen if the banks can pry the P2P market away from Venmo, as some analysts believe their grip on the market is too strong. Another thing to consider is whether offering the P2P service is even profitable — due to its lack of obvious revenue opportunities.
But releasing Zelle to its clients shows Bank of America’s commitment to controlling and streamlining all of its banking and financial services into a single app experience. And therein may lie the value.
“As one of the first banks to offer mobile banking a decade ago, we’re excited to usher in a new era of high-tech, high-touch banking,” said Michelle Moore, head of Digital Banking at Bank of America in the news release. “In 2017, you’ll see a strong focus on payments and intelligent solutions that will deliver personalized experiences clients never imagined were possible.”
Want to know how to make Zelle and Venmo work for your business? Contact National Merchants Association today at (866) 509-7199.