Scottsdale, Ariz.-based Early Warning said Zelle’s volume totaled $49 billion, up 58% from 2018’s third quarter. Over the same time, transactions increased 73% to 196 million.
Dollar volume on the Zelle peer-to-peer payments service increased more than 50% year-over-year in the third quarter while the transaction count jumped even more, Zelle operator Early Warning Services LLC reported Tuesday.
Consumers access Zelle through their bank or credit-union’s online site or mobile app, or through the standalone Zelle app for customers of financial institutions that haven’t joined the Zelle network. Some 254 financial institutions are live on Zelle’s network today, and more than 346 others have contracted to join, according to Early Warning, a bank-owned risk-control and technology firm. In addition, customers of 5,516 financial institutions have used the Zelle app.
The average Zelle transaction is $250, down about 9% from $274 a year ago. That drop happened even with rental payments, a big-ticket item, reigning as Zelle’s top use case. A spokesperson wouldn’t give the percentage of rental payments, but tells Digital Transactions News that the other top uses for Zelle are gifting and meal sharing.
Zelle’s chief P2P rival is PayPal Holdings Inc., especially its Venmo service, which posted $24 billion in payment volume in the second quarter, up 70% year-over-year. PayPal also posted another $22 billion in P2P volume on its own branded network and through its Xoom online wire-transfer service. PayPal is scheduled to report its third-quarter financials Wednesday.
“Zelle is the dominant P2P payment method in the U.S. banking sector, however, it is not the most utilized P2P method by consumers—consumers heavily rely on fintech solutions for the same reasons consumers use Zelle,” Krista Tedder, head of payments research at Pleasanton, Calif.-based Javelin Strategy & Research, tells Digital Transactions News by email. “The population of consumers who use P2P is also stable from year to year, so although there is growth in volume and dollar amounts posted by Zelle this past quarter, the U.S. consumer population joining Zelle, PayPal, Venmo, and other solutions remains stable.”
To continue building growth, Tedder says P2P payments providers need to develop “more use cases, better security features, and communication tools.” Javelin expects to release study results about the P2P market in the upcoming weeks.