Can I "Zelle" you the money? The big banks are hoping this phrase catches on.
76 Million Users
Early Warning, a bank-owned technology firm, today announced its foray into the mobile person-to-person (P2P) payment market. Zelle, a new app, is set to launch in 2017 and will have over 76 million users come day one. “Zelle will transform how people manage their financial lives, providing them faster, safer, and more convenient payment options with their friends and family,” said Paul Finch, chief executive officer of Early Warning.
Zelle will have a good head start with 19 financial institutions already registered including banking giants Citigroup Inc. (C), Bank of America Corp. (BAC), JPMorgan & Chase Co. (JPM), Morgan Stanley Inc. (MS) and Wells Fargo & Co (WFC).
The Zelle app - short for gazelle - will allow anyone with a checking or savings account to sign up to the user friendly app and send or request payments using registered phone numbers or email addresses. These funds will be available immediately. (See also: Venmo vs. Square Cash vs. Google Wallet: How They Compare.)
New PayPal Rival
The P2P money transfer market is growing rapidly with an estimated 20 percent of all P2P payments done via non-bank methods. The biggest of these is Venmo,(owned by PayPal, which processed $4.9 billion in payments in the third quarter of 2016, up 131 percent from 2015, according to PayPal (PYPL) CEO, Dan Schulman. Venmo is popular among young people who "Venmo" each other money when splitting payments, often for small purchases like food and drinks. (See also: Venmo Is Not a Scam: Here Is Why.)