Zelle launches peer-to-peer mobile payments app
Zelle has launched a peer-to-peer mobile payments app for Apple and Android users. Zelle users can transact using a mobile number or email address, irrespective of where the user banks. Payments can also be split as necessary. Zelle has a longstanding relationship with such banks as Bank of America and JPMorgan Chase, but with the launch of its standalone app opens its services to a much broader userbase.
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Zelle, a bank-based P2P offering operated by Early Warning, is launching its long-awaited standalone app for both Apple and Android users on September 12. (It has been available within its partners' banking apps since late 2016.)

To use Zelle, the sender and recipient can download the app and conduct transactions using an email address or mobile number — regardless of bank affiliation. Customers can also use Zelle to split payments, if need be. The app will compete directly with other mobile and digital P2P services like Venmo and Square Cash.

This app will provide consumers with another channel to access Zelle's services.

Almost anyone with a debit card can now use Zelle. Zelle is partnered with many major banks — including Bank of America, JPMorgan Chase, and Citi, among others. The app will also allow consumers with accounts at smaller banks and credit unions that don't support Zelle on their digital platforms to use its services. And through partnerships with Visa and MasterCard, almost anyone with a debit card linked to a US bank account can use the app. Additionally, the Zelle app won't support credit cards, allowing it to offer free transfers. That could extend its reach to up to 86 million users.

Zelle is partnered with many major banks — including Bank of America, JPMorgan Chase, and Citi, among others. The app will also allow consumers with accounts at smaller banks and credit unions that don't support Zelle on their digital platforms to use its services. And through partnerships with Visa and MasterCard, almost anyone with a debit card linked to a US bank account can use the app. Additionally, the Zelle app won't support credit cards, allowing it to offer free transfers. That could extend its reach to up to 86 million users. A standalone app makes Zelle a competitor for millennials' P2P business. Digital P2P payments tend to be favored among millennials, but Zelle's bank-app focus has helped it target an older generation, by introducing them to digital P2P in a familiar environment. But as a standalone service, the app will more directly compete against players like Venmo and Square Cash in the crowded market. That could heat up the space — Venmo, the market leader, saw $14.8 billion in volume in the first half of 2017, while Zelle partner banks' P2P services were used for 100 million transactions worth $33.6 billion.

It remains to be seen how Zelle will fare on its own, but its current success, combined with an appetite for mobile P2P, could position it well. Zelle already counts about 50,000 new enrollees a day. But the app could broaden its reach, especially since it has a much more inclusive audience than third-party services, like Venmo, which might have a more sophisticated sign-up process. And the differentiating features, like free instant cashouts, could help it stand out, though other providers have similar offerings. That means that, though Zelle is off to a good start, the firm could stand to build out its in-app offerings in order to establish a unique need, or a specific use case, to grow its own audience and beat out the competition in a market where no one player holds a majority share.

Jaime Toplin, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile P2P payments that:

Forecasts the growth of the P2P market, and what portion of that will come from mobile channels, through 2021.

Explains the factors driving that growth and details why it will come from increased usage, not increased spend per user.

Evaluates why mobile P2P isn’t profitable for companies, and details several cases of attempts to monetize.

Assesses which of these strategies could be most successful, and what companies need to leverage to succeed in the space.

Provides context from other markets to explain shifting trends.

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