If social-payments app Venmo is something you think is just for your kids, the big banks would like to have a word.
A consortium of 19 banks and credit unions has formed a new payments network, named Zelle, that will allow consumers and businesses to transfer money instantly using their existing banking apps.
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The platform, which is expected to launch early next year, is meant to give consumers an inclusive alternative to cash and checks, says Paul Finch, the CEO of bank-owned Early Warning, which on Sunday introduced the network and associated standalone app at the Money 2020 payments conference in Las Vegas.
When launched, more than 76 million banking users will be able to send and receive payments instantly. But anyone in the U.S. with a valid checking or savings account will be able to access the network – even if their bank isn’t a part of the partnership.
“I think what they’re trying to do is a lot bigger than Venmo does,” says Andrew Tilbury, founder of Soho Advisors, a strategic marketing firm working with Zelle on the launch.
Building on a banking relationship
Zelle could be a payments network that allows roommates to coordinate on rent, but Finch envisions business uses as well. Think employers pushing out payroll or insurance companies instantly paying out a claim.
While young adults have embraced alternative payments services – Venmo is on track to process $20 billion in payments annually – the bank consortium hopes brand trust will help distinguish Zelle for consumers who aren’t typically first adopters.
Consumers will be able to send payments directly between bank accounts without sharing banking information with a 3rd party, Finch says.
At launch, these firms will be part of the Zelle network: Ally Bank, Bank of America, Bank of the West, BB&T, BECU, Capital One, Citi, Fifth Third Bank, FirstBank, First Tech Federal Credit Union, Frost Bank, JP Morgan Chase, Morgan Stanley, PNC, USAA, U.S. Bank and Wells Fargo.
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