America’s biggest banks will take on Venmo with Zelle
What is Zelle? We hear you ask.
Zelle is actually the name for the revamped clearXchange, the person-to-person payment service that is meant to be Venmo’s competition, although it was never promoted as a corporate brand.
Now however, the US banks are intending to release the new Zelle brand in October at a payments industry conference (presumably Money20/20) to take on the PayPal owned Venmo, which is very popular with young Americans for paying for things such as rent, bills and meals.
The Wall Street Journal first reported the new brand name and the potential October launch, citing people close to the matter, although Early Warning, the bank-owned organisation that is running the payment service, did not comment on the launch or the name-change.
Reuters later cited an Early Warning spokesman, Andrew Tilbury, who said the product would be launched in the first half of 2017.
Instant transfers a ‘special weapon’
Head of Payments at Icon Solutions recently wrote that with the likes of TransferWise, PayPal’s Venmo and Facebook Payments it is clear that payments will be a key battleground with instant transfers the ‘special weapon’. One of the attractions of services like Venmo is that it is instant, functional and user-friendly.
“If clearXchange can replicate this experience it presents a significant opportunity for banks to catch up in the race against fintech companies and gain popularity among younger generations.”
This is where the name Zelle steps in apparently. The WJS says it is unclear how the US banks ended up with the name but cite a person familiar with the matter who says that it’s meant to conjure up images of fast gazelles.
Tilbury said that the banks chose it because it “feels more personal than product-like” and has “approachable personality”. He added that “will help financial institutions create and build relationships.”
Americans have gradually been moving away from cash towards mobile payments. A recent US study found that 51% of Americans check their mobile banking app during working hours, whilst viewing of account balances has increased by 21%. The study also said that money transfers are up by 8% on mobile and 35% more online. Furthermore, online is seeing big increases across the field as the amount of people paying bills online has increased by 37%. ATM transactions are up by 17%.
This was echoed by a later Gallup poll which found that just under two-thirds of Americans believe that cash will die out within their lifetime with payments being made with credit/debit cards and other electronic forms of payments.