Zelle processed $1 trillion last year, it says, setting record for payment apps
Zelle processed $1 trillion last year, it says, setting record for payment apps
The digital payment network Zelle announced that it serviced $1 trillion in payments last year — the highest volume ever, it says, for a peer-to-peer payment app. Almost three-quarters of consumers in the U.S. use mobile payment apps like Zelle, Venmo and Cash App, including more than 90% of Gen Z consumers.
What started out as a convenient way to pay your friends back for dinner is becoming a bigger part of how we make transactions throughout the economy.
Though they’re called peer-to-peer apps, these days they’re often used to do peer-to-landlord business.
“This is too convenient. I don’t understand why people bother with paper checks anymore,” said Zeanna Bunch. She rents out a couple of rooms in her house in Morgan Hill, California.
Several years ago, at the suggestion of a tenant, she started accepting rent payments through Zelle and never looked back. “Even if they’re out of town, they just hit the app and send me the rent and … you get a little ka-ching noise on your phone,” she said.
Zelle General Manager Denise Leonhard said the network moved almost $2 million a minute last year. That’s a lot of ka-chings.
“We are now partnering with over 2,200 banks across the network,” she said. “This is enabling their customers to basically go through their daily tasks and be able to pay people that they know and trust.”
That’s landlords, but also babysitters, farmers market vendors, hairstylists, music teachers.
But as the amounts grow, so do concerns about mistakes and fraud, said Lisa Gill at Consumer Reports.
“There’s a lot of onus on the individual to sort out a problem,” she said.
The quick, irreversible transactions on these apps make it easier to send money to the wrong person or fall prey to scammers, Gill said. And there’s little federal oversight.
“They are not a bank,” she said.
Zelle payment systems are usually integrated into banking apps and only transfer funds bank to bank. Other apps can store value within the app, which Gill recommends against, suggesting users transfer funds to a bank account immediately.
Last year, the federal Consumer Financial Protection Bureau finalized a rule that extended the agency’s oversight to include payment apps. It sued several large banks for failing to protect Zelle users from fraud.
Zelle called the suit “meritless,” saying it provides multiple backstops to help users avoid mistakes and scams.
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