The Point

Zelle Plants the Seed for a Real-Time Payments Future

Jun  06 
Author Picture 
Matt Wilcox  SVP, Marketing Strategy and Innovation, Digital Banking Group, Fiserv 

A year after its launch, Zelle® is taking off and taking hold. It's one of the most successful financial product launches I've seen in my career, and speaks volumes about consumer demand for fast, safe and easy payments – and financial institutions' need for a ubiquitous, branded person-to-person (P2P) network.

Every day, more than 100,000 new users enroll in Zelle and total funds moved are up 15 percent quarter over quarter from the previous year. Four months after implementing Zelle, a top-20 bank reported a 370 percent increase in new active P2P users.

What's behind the success? It's a combination of awareness, trust and a great experience.

First, Early Warning Services® and participating banks are doing a phenomenal job promoting the Zelle brand. In addition to a national advertising campaign driving awareness, participating institutions are promoting Zelle front and center in online and mobile banking. As our adoption teams work with clients to support local campaigns, we're seeing positive results from those integrated efforts, which contribute to consumer enrollment and use.

Second, Zelle showcases the innate value financial institutions offer consumers when it comes to payments. People have an existing trusted relationship with their institutions, and the scale of the Zelle® Network makes the bank or credit union app an easy and convenient place for consumers to pay other people and get paid. On average, we're seeing larger dollar volumes with individual Zelle payments than are typically made with other P2P services. That speaks to the trust and security people have in using a solution backed by their bank or credit union.

Finally, by delivering a great experience, Zelle is driving payment usage and stickiness. Zelle is fast. The network makes it easy to send money in minutes. This fast payments experience is something people are coming to expect. We live in an always-on, real-time, all-the-time world where instant gratification is the norm. Zelle helps deliver on consumer expectations for payments at digital speed.

Beyond the instant gratification of seeing the notification that a payment has been received, Zelle reduces the friction caused by giving your account information and authenticating yourself to a third party or keeping track of funds in another site. A great experience drives engagement and payments activity.

Educate Consumers and Staff

As with any consumer payment service, educating consumers is the front line of defense against fraud. P2P is about sending money to friends and family – people you trust. Using it in that way will help discourage fraudsters, especially those looking to exploit the speed of Zelle.

We live in an always-on, real-time, all-the-time world where instant gratification is the norm. Zelle helps deliver on consumer expectations for payments at digital speed.

It's important to review your overall fraud migration strategy to ensure layered defenses. In a real-time world, that includes online banking and new account origination. Working with Early Warning and our clients, we consistently apply the latest fraud protections and are always available with solutions and expertise to help clients address those areas.

View P2P as Part of Your Overall Strategy

In a recent analysis of a top-20 bank, Fiserv found a four-fold surge in P2P transactions one year after implementation of Zelle.

With that kind of result, it's no wonder there is significant demand for Zelle from financial institutions. That's exciting, but remember P2P is just one component of your integrated payments strategy.

100k new Zelle users enrolling daily

As part of that strategy, we're helping clients establish a real-time connection for payments. P2P capabilities are just the first benefit of that strategy. Once your financial institution has been established, the same real-time connection will work for other payments such as account-to-account transfers and bill pay.

Think of it this way: you are planting the seed for your financial institution's real-time future. That opens new possibilities to differentiate the payments franchise for future intelligent payments applications in retail and commercial.

The Payments Wars Aren't Over

Perhaps the best thing about the early success of Zelle is that it is renewing enthusiasm for the financial institution's payments franchise – ground some industry observers ceded to third-parties years ago. Paying people fast and easily is really at the heart of financial services. And for financial institutions, that's a high-value engagement with their customer that continually reinforces their trust and relationship.

Zelle and the Zelle related marks are wholly owned by Early Warning Services, LLC and are used herein under license.