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Peer-to-Peer Payments Service 'Zelle' Debuts With Support From Major US Banks for Speedier Transfers

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Last week at WWDC, Apple announced a new feature coming to Apple Pay that will let iOS users pay one another directly within Messages, placing the funds in a new "Apple Pay Cash" card that can then be transferred to a bank account or spent anywhere Apple Pay is supported. In addition to current competitors in the peer-to-peer payments space, including Venmo and Square Cash, a coalition of five U.S. banks are this week launching support for a new P2P payments service that promises speedier fund deposits, and support coming from more banks in the future.

The service is called "Zelle," and it will be rolled into the apps and websites of the banks supporting it, which will begin with JPMorgan, Bank of America Corp, Wells Fargo, U.S. Bancorp, and Capital One (via Reuters). Another two dozen banks and credit unions are predicted to join Zelle over the course of the next year. Zelle was originally announced last October.

zelle-pic.jpg

Zelle's supporters are focusing on its ability to deposit funds "in minutes" into a friend's bank account, using only an email address or phone number, "because the banks are finally linking to each other." Apps like Venmo and Square Cash normally take up to one day to transfer money into a bank account, with potential for instant transfers available at additional costs.
The long-awaited network will allow tens of millions of bank customers to send money to each other instantly - known as person-to-person payments - with a few taps on their smartphones. That is an improvement over Venmo, which immediately alerts users that a money transfer is in progress, but takes time to shift funds between bank accounts.

"By coming together to offer Zelle, we are providing a large majority of Americans with a safe, fast and easy way to move money," said Bill Wallace, head of digital at JPMorgan Chase & Co (JPM.N), the biggest U.S. bank by assets.
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Zelle was created by an industry consortium called Early Warning Services, whose CEO Paul Finch also cited payment service fragmentation as a major frustration for customers. Besides Venmo and Square Cash, even Facebook, Snapchat, and Google have their own peer-to-peer payments solutions, which Finch references as "inconsistent solutions."
"Fragmentation has been frustrating for consumers. Inconsistent experiences, have made it difficult to send and receive money between banks," said Paul Finch, Chief Executive Officer, Early Warning Services. "Zelle unites the financial community behind a single, real-time P2P payments experience for millions of consumers. Together, we are removing friction from finance, allowing money to move seamlessly between accounts in minutes. This revolution in money movement will create for consumers a viable alternative to checks and cash."
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The banks supporting Zelle "are being careful not to confuse customers" with the introduction of another payments app, so it's said that a company like Chase will slowly introduce Zelle into its existing QuickPay app, calling it "QuickPay with Zelle." Later in 2017, Zelle will also allow customers with banks that don't connect with the service to use its instant payment features by pairing an upcoming Zelle app with a Visa or Mastercard debit account.

Zelle has a full list of banks and financial institutions launching support for the service, although it hasn't detailed which will be available first beyond the five banks mentioned today, and encourages users to check with their financial providers for more information.

Apple's own peer-to-peer payments solution will launch alongside iOS 11 this fall.

Article Link: Peer-to-Peer Payments Service 'Zelle' Debuts With Support From Major US Banks for Speedier Transfers
 
Article Link
https://www.macrumors.com/2017/06/12/zelle-debuts-speedier-transfers/
Super excited for this. I honestly believe this will replace many P2P clients since this is your account to another account in minutes.
 
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Instant depositing is the future of money transfer services. Google Wallet (and sometimes with Facebook Messenger) this is already possible (at least for me, with a Bank of America debit card linked). When I receive money from my roommates, the money is instantly available within 2 minutes of sending in my available balance, which I absolutely love. Hopefully Apple Payments is the same. Nobody wants to wait 1, 2 or 3 business days for money to finally be available to them.
 
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frozen220 said:
Instant depositing is the future of money transfer services. Google Wallet (and sometimes with Facebook Messenger) this is already possible (at least for me, with a Bank of America debit card linked). When I receive money from my roommates, the money is instantly available within 2 minutes of sending in my available balance, which I absolutely love. Hopefully Apple Payments is the same. Nobody wants to wait 1, 2 or 3 business days for money to finally be available to them.
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The reason for that is because it's using the Zelle network.
 
jmh600cbr said:
how is this different than square cash?
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Why even use square cash?

Honestly with something like this, I have a hard time seeing why anyone would use a 3rd party option. Why sign up for another service giving out your bank account/debit/credit card info? Why have someone download an app, signup, transfer money to it only to have you then take that money and transfer it to your bank account?

Just cut the middleman out. I'd say that's more than reason to use it. I mean heck, they state over 86 million Americans will be on the network. It'll already be built into your banking app.
 
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In before someone posts that their country has had a similar service for years and years.

Kaibelf said:
The banks are controlling it, so they will magically be able to provide a level of service that was "impossible" on something they didn't control.
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It also helps to keep people in their ecosystem. Square and Apple's solutions have attached debit cards, for example, so using those in many of the same ways as normal bank accounts isn't completely out of the question--especially as NFC becomes more accepted.
 
drewyboy said:
Why even use square cash?

Honestly with something like this, I have a hard time seeing why anyone would use a 3rd party option. Why sign up for another service giving out your bank account/debit/credit card info? Why have someone download an app, signup, transfer money to it only to have you then take that money and transfer it to your bank account?

Just cut the middleman out. I'd say that's more than reason to use it. I mean heck, they state over 86 million Americans will be on the network. It'll already be built into your banking app.
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What is the alternative? My girlfriend and I have separate Capital One accounts. She helps me with bills by giving me cash monthly. We used to physically go to the ATM and withdraw from her account then deposit to mine (Which I know, is really dumb). So we use Square cash so we don't have to leave the house at all. How can I "cut the middleman"?

Now that this is out, yes, this can kill off Square cash in my case
 
jmh600cbr said:
how is this different than square cash?
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The main difference to services like Venmo and Square is that you don't need another account, and then transfer money to your bank when you want to cash out. The transactions go directly from the sender's to the receiver's bank account. Besides saving time, this also means you are not beholden to the terms of service of a 3rd party (that often isn't subject to the same consumer protection regulations that banks are).

Zelle is really just a rebranding of the ClearXChange system that banks have already offered for a while under brands like Chase Quickpay or Wells Fargo Surepay. These always worked across banks, but most people didn't know that. That's why they are introducing Zelle as a unified brand.
 
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lostczech said:
What is the alternative? My girlfriend and I have separate Capital One accounts. She helps me with bills by giving me cash monthly. We used to physically go to the ATM and withdraw from her account then deposit to mine (Which I know, is really dumb). So we use Square cash so we don't have to leave the house at all. How can I "cut the middleman"?

Now that this is out, yes, this can kill off Square cash in my case
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Right, sorry if I wasn't clear. I meant moving forward from here on out.
 
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lostczech said:
What is the alternative? My girlfriend and I have separate Capital One accounts. She helps me with bills by giving me cash monthly. We used to physically go to the ATM and withdraw from her account then deposit to mine (Which I know, is really dumb). So we use Square cash so we don't have to leave the house at all. How can I "cut the middleman"?
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You probably could have used Zelle/ClearXChange all along:

https://helpcenter.capitalone360.com/Topic.aspx?category=C3BNKEOECK
 
Ohples said:
If this becomes big enough, does anyone think Apple will just integrate with this and replace the GreenDot card.
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"big enough". To answer your question, over 86 million bank accounts will have the ability to use this, built in to their current banking app.

Why even use apple? I get the possible convenience but if a few extra taps is too much for someone that owes you, or you owe them, then there's bigger issues.
 
lostczech said:
That's the confusing part of Capital One. This is for "Capital One 360" accounts, I have a regular account through their branch (360 is an online only product.. Didn't exist when I became a customer with them)
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Yes, but haven't they integrated all offerings by now? Anyway, apparently it also works for "Total Control" checking accounts (whatever that is):

https://p2ppayments.capitalone.com
 
Sounds a lot like the Interac eTransfer system we've been using in Canada for the past several years. Our banks had an existing network connecting them all for debit, Interac, so they just added an email layer on top of it.
 
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Interestingly, my credit union has announced support for what sounds like an awful lot like this starting on July 17th. They aren't even on the list of supported banks/credit unions.

As for why we weren't all happily using Square Cash, at least in my case, two reasons: one, I hate binding arbitration agreements, because in practice they always find for the big company and so they could literally take ten thousand dollars out of your account and 'lose' it and you'd just be SOL, having to prove what happened to it without recourse to lawyers, discovery, or an actual judge who was actually accountable to anyone except the company that you're trying to sue.

And two, square cash only takes debit cards from big banks. Small banks and credit unions are allowed to charge a little more, square cash doesn't like that because it eats into their profits (although not by much, because only a very small percentage of their customers bank with these institutions) and so they have disallowed them. And because I refuse to do business with a company that makes me sign a binding arbitration agreement ahem all the big banks mentioned ahem I have been unable to use any of these services up until now.
 
There's too many options which cause fragmentation? Better introduce another option for people to use!
 
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lunarworks said:
The difference is this option actually, and finally, makes sense. It's not going through some third party, it's going bank-to-bank direct.
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Consumers dont care about that, they'll use the app everyone else has. Aka cash or venmo.
 
JoEw said:
Consumers dont care about that, they'll use the app everyone else has. Aka cash or venmo.
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I'm willing to best more people have their banking app that already is using Zelle than those with venmo on it.
 
JoEw said:
Consumers dont care about that, they'll use the app everyone else has. Aka cash or venmo.
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There are far more people that have Zelle than Venmo, they just don't know it yet. ;) Most people with an account at a major bank, and soon everyone who has a debit card will be able to use it. It's just a matter of marketing and education. Venmo is of course popular among young people, but the banks are hoping to bring app-based p2p payments to the larger mainstream.

As a side benefit, it will potentially reduce check and cash processing, which is more expensive for banks than electronic transfers.
 
I foresee a business opportunity for someone to write a cross-platform app (and do some viral marketing to get it into nearly everyone's hands), that you pre-configure with the list of which of these myriad payment services you have, and then when 2 or 3 or 20 friends come together, have the app on each person's phone compare notes, and you put in how much you want to pay each person, and it tells you which services to use to get to them... "click this button to write an iMessage to Charlie offering to send the $27 you owe him (causing Apple Pay to kick in with a payment button), and click this other button to open your bank's app so you can use Zelle to pay $15 to Mary." The app could follow a decision tree to choose the methods that get the money there the fastest and with the smallest fees (including any other criteria that make given methods more pleasant), taking into account that it needs to find methods that each pair of people support.

Okay, it started as a joke because of the proliferation of services, but it doesn't sound like that bad of an idea.
 
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