Zelle Reportedly Steering Users to Banking Apps

Zelle reportedly wants users to use its platform via banking apps instead of its own.

An executive for the peer-to-peer payments provider told Reuters on Thursday (Oct. 31) that while more than 2,200 banks and credit unions are part of its network, just 2% of Zelle transactions happen on its mobile app.

With that in mind, Zelle is focusing on enhancing its functionality on banking apps, where most users send and receive payments, said Denise Leonhard, general manager of Zelle.

“Given that that is really the strategy and the majority of the use that we’re seeing, we are really pivoting in order to strengthen that going forward,” she said.

The Reuters report noted that the move illustrates the wide adoption of Zelle by American banks, despite competition from the likes of Apple Pay and Google Pay.

According to the report, Zelle’s app will remain available, but with a focus on educating consumers about scams and fraud, while also listing participating firms on its network.

Earlier this month, Early Warning Services (EWS) — the network operator of Zelle — said the number of transactions sent via the network rose 27% year over year to reach 1.7 billion.

The value of those transactions climbed 28% to $481 billion, EWS said, while the number of enrolled users of Zelle rose by 17 million to bring the total number of consumer and small business user accounts to 143 million.

EWS CEO Cameron Fowler attributed this increase to the ease and security of the digital payments made possible by Zelle’s network of financial institutions.

“Simply put, Zelle fills a vital need for millions of Americans,” Fowler said in a news release. “Consumers and small businesses alike benefit from the reliability, speed and security that Zelle offers when paying people they know and trust.”

Research by PYMNTS Intelligence and The Clearing House has shown that 51% of American consumers regularly use peer-to-peer payment apps such as Zelle and Venmo.

“While these services have become ubiquitous due to their ability to deliver quick and easy money transfers, concerns about fraud are casting a shadow over their growth,” PYMNTS wrote recently.

JPMorgan Chase revealed in August that the Consumer Financial Protection Bureau (CFPB) has asked it about fund transfers via Zelle. And Bank of America said this week that it could pursue litigation in the CFPB’s investigation of Zelle transactions.