Spurred by consumers’ need to send money to family and friends during the Covid-19 pandemic and an increasing number of financial institutions being onboarded, the Zelle peer-to-peer payment network announced Monday it processed $84 billion in transactions during the third quarter of 2020, up 18% from the second quarter. Consumers made 323 million transactions for the quarter, up 17% from the second quarter.
For the 12 months ended in September, consumers conducted more than 1 billion payment transactions.
In addition, more than $4.5 billion was sent to small businesses, such as landscapers, and nearly $500 billion in business-to-consumer payments were sent via Zelle’s disbursements service, such as insurance payouts and financial aid to college students.
A recent survey by Zelle found that nearly three-quarters of respondents were most likely to use P2P services to provide financial aid to friends and family since the onset of the COVID crisis. One frequent use case is using Zelle to repay consumers that picked up groceries for friends or family members during the pandemic, says Early Warning Services LLC, which operates Zelle. Early Warning is owned by Bank of America Corp., BB&T (now Truist Financial Corp. following a merger with SunTrust Banks), Capital One Bank, JPMorgan Chase & Co., PNC Bank, U.S. Bank, and Wells Fargo & Co.
“We are seeing a lot more consumers move to contactless transactions during the pandemic, and P2P payments to repay someone for picking up for essentials such as groceries are part of that,” says a Zelle spokesperson.
Also fueling growth is an increase in the number of member financial institutions. Currently, 1,000 institutions are contracted to participate in Zelle, with 731 live. In comparison, more 600 financial institutions had contracted to participate in Zelle a year ago, with more than 200 live.
“As more financial institutions come onto the network, we see more volume,” the Zelle spokesperson says.
No timeline is available for when the remaining 269 financial institutions contracted to Zelle will go live, as the timing varies by institution, Early Warning says.
Looking ahead, the network expects to see continued transaction growth during the fourth quarter. Gifting, a popular use case during the fourth quarter of 2019, is expected to remain strong, Early Warning says.
“We continue to grow our network, welcoming financial institutions of all sizes,” Al Ko, chief executive of Early Warning says in a prepared statement. “Zelle is available to more than 140 million consumers in their mobile-banking apps or in the Zelle app and is used for the most important life essentials such as sending contactless payments to local businesses and money to friends and family in need.”
With more consumers shifting banking behavior online, Zelle has partnered with social-change organizations to offer free educational tools. For example, the network has partnered with EverFi Inc., a provider of digital education tools and curriculum, to offer online financial literacy classes to high-school students. The network has also hosted online community learning sessions in conjunction with nonprofit Older Adults Technology Services about safely using digital banking tools, including P2P.