Sunday , September 26, 2021

In Covid’s Wake, Consumers—And Now Businesses—Are Lining up for P2P Payments

Much attention in the payments industry has focused on how the coronavirus pandemic has boosted contactless technology in stores, but it’s also leading more consumers and now businesses to adopt peer-to-peer payments networks, as well.

After initial success with consumers, banks are starting to adapt P2P systems especially for small businesses. “We’ve seen through the roof growth of Zelle person-to-person payments among our retail banking customers, especially in the wake of Covid-19,” says Hisham Salama, executive vice president and chief digital officer at Bank of the West, in a statement. “And we have been receiving significant customer demand from small businesses looking for similar capabilities.”

As a result, Bank of the West, a San Francisco-based unit of France’s BNP Paribas, announced Tuesday it is working with Fiserv Inc. to enable small-business clients to pay suppliers and receive customer payments via the rapidly growing Zelle network, operated by Scottsdale, Ariz.-based Early Warning Services LLC.

Zelle, which many of the nation’s largest banks launched only in 2017, saw fast growth in 2020.  The network processed 1.2 billion transactions last year, up 58% over 2019, Early Warning said Tuesday. Dollar value grew 62%, to $307 billion in money transfers. With Bank of the West joining 10 other financial institutions that last year adopted Zelle for business payments, that dollar volume could climb even more rapidly.

The network now connects more than 850 banks and other financial institutions, with 457 having joined in 2020, Early Warning said. Customers of those institutions can use the service through the banks’ mobile apps. Customers of another 7,000 institutions can access it via the Zelle app. Payments typically clear in a matter of minutes.

“Despite challenging societal circumstances in 2020, we are proud of the role Zelle played in enabling businesses and consumers to leverage digital payments in their everyday lives,” said Al Ko, Early Warning’s chief executive, in a statement. “We are making considerable progress towards our goal of every U.S. financial institution joining our network and look forward to working with our reseller partners in adding more participants every day.”

Other national P2P apps are enjoying similar growth trajectories. PayPal Holdings Inc. disclosed in July its popular Venmo service had seen its volume grow 52% year-over-year in the second quarter to $37 billion. It has not released a more recent number. In a bid to allow users to pay with Venmo in stores, PayPal last year introduced a Visa credit card issued by Synchrony Financial and featuring both QR codes and NFC chips.

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