Tero Vesalainen
Manole Capital Management:
Oct’22
Zelle
P2P (peer-to-peer) payments are a simple way to send or receive money, without going through a traditional bank. P2P payments have become so synonymous with simple payments that most people just say “Venmo me”. Whether you’re paying a babysitter or settling up a lost golf bet (something we know nothing about), P2P payments have become commonplace.
We have discussed the opportunity we see with PayPal’s Venmo platform (click here). We stated that PayPal’s ultimate goal was to gain physical PoS (point of sale) acceptance, with more and more consumers downloading and adopting its Venmo payment app. That is slowly occurring, but most brick-and-mortar merchants still don’t accept PayPal and Venmo.
We haven’t written about the equivalent payment platform for the banks – Zelle. It started in late 2017, as a payment project for big banks to compete with fintech start-ups like PayPal’s Venmo. Now, Zelle reaches roughly 80% of US checking accounts and the network claims to have 10,000-member financial institutions in its network. Zelle is a bank-owned network, essentially run by its Early Warning Services (known as EWS) group. EWS is owned and operated by Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, US Bank and Wells Fargo and it acts as Zelle’s operator and payment network provider.
During its five years of existence, Zelle has processed over 5 billion transactions and nearly $1.5 trillion of dollar volume….
