Brief:

• Zelle, the person-to-person payments network that connects U.S. banks, saw a 36% jump in transactions to $75 billion in 2017 from a year earlier, according to a press release by parent company Early Warning Services. The number of transactions surged 45% to 247 million last year from 2016 as more bank customers started using Zelle, the banking industry's answer to PayPal's Venmo and Square's Cash app.
• Bank of America, Citi, Chase, Capital One, PNC, U.S. Bank and Wells Fargo are among the more than 60 financial firms that support Zelle on their mobile apps, making it available to more than 95 million consumers. The service enables payments from one bank account to another for enrollees using only an email address or a U.S. mobile phone number. The standalone Zelle App is available in Apple's App Store and Google Play.
• Meanwhile, Zelle this month launched a media campaign featuring Daveed Diggs, the actor who originated the twin role of Marquis de Lafayette and Thomas Jefferson in the Broadway smash "Hamilton."

Insight:

The growth in P2P payments points to how a solution like Zelle, which spans many of the major bank and credit union players, can offer consumers added convenience with a coordinated solution for mobile payments and drive wider adoption of the payment system.

Banks have been relatively slow to respond to the growing threat from P2P payment services from companies like PayPal and Square, but they do have an advantage in being able to build upon pre-existing, trusted relationships with their customers. Apple, Google and Samsung also have moved into the payments space as part of making mobile devices more useful to their customers.

Zelle is essentially a re-branding of an existing network called clearXchange that's used to move money among major U.S. banks, and its services are expected to grow into other areas like bill payments and charitable donations. Corporations can use the Zelle disbursements service to send electronic payments to individuals using only their mobile phone number or email address.

Zelle's marketing push and overall pervasiveness among established financial firms will likely help to change consumer habits down the road. The implementation of mobile payment services is speeding up as banks respond to competitive pressure and industry momentum for mobile platforms, per a survey by the Federal Reserve Bank of Boston. In addition to the 24% of banks that already offer mobile payments, 40% plan to do so within two years.

Meanwhile, U.S. consumers have been more resistant to mobile payments than people in other markets like China, given the ease of paying with cash or debit and credit cards. However, trends show growing popularity of contactless transactions, as researcher eMarketer estimated that mobile P2P payments would grow 55% in 2017, and 63.5 million Americans — about one-third of smartphone users — would use a P2P payment app at least monthly last year.