Businesses Adopt Zelle As the Network’s Numbers Climb in the Face of the Pandemic

Peer-to-peer payments networks like Zelle were introduced as a means for consumers to pay each other, but business acceptance now appears to be ramping up along with consumer usage in the face of the Covid-19 pandemic. 

Seven major financial institutions are now enabling property owners, home-services companies, and other small businesses to receive Zelle payments from consumers, Early Warning Services LLC reported Wednesday morning. Scottsdale, Ariz.-based Early Warning runs the network for the bank-owned Zelle service.

All told, the network handled $133 billion in the first half of 2020. Transactions totaled 519 million, up 63% from the same period last year, according to Early Warning. Restrictions stemming from the Covid-19 pandemic, such as physical distancing, helped drive activity, the company said, as enrollment grew 17% year over year, while the count of active senders jumped 43%. Active senders are those who have sent at least one payment in the past 90 days.

The average number of transactions users sent during the period grew 10%, with the pandemic causing consumers to shift to services like Zelle to repay others for groceries or other essentials, Early Warning said. 

As with other P2P services, Zelle works through a mobile app, cutting down on the need for physical interaction with others. “Consumers across all generations have embraced Zelle during these challenging times as a contact-free way to safely exchange funds,” said Lou Anne Alexander, chief product officer at Early Warning, in a statement.

The banks enabling Zelle for small businesses include Bank of America, Chase, Citi, Frost Bank, FirstBank, Morgan Stanley, and U.S. Bank, Early Warning said. Some of these businesses are also using the service for payroll and to pay other businesses, the company added.

Early Warning cited one project in which the Jacksonville, Fla.-based Wounded Warrior Project disbursed $8 million through BofA to injured and ill veterans who had sustained a sudden loss of income. WWP serves veterans of military actions that have taken place since Sept. 11, 2001.

Consumers also used Zelle to share with others some of the stimulus checks they received from the federal government, according to Ravi Loganathan, chief analytics officer at Early Warning.

All told, out of some 924 financial institutions that have agreed to participate in the network, more than half are now processing transactions, Early Warning said. More than 7,000 institutions are involved in the system because their customers use the app or access Zelle through a mobile-banking app.