Banks are fighting back against P2P money transfer apps as competition in the mobile transfer market heats up.
The battle between banks and non-bank P2P payment providers has been heating up over the last few years as consumers, especially millennial aged consumers increasingly turn to non-traditional providers like Venmo for a variety of everyday tasks. However, a number of America’s biggest banks are fighting back against P2P money transfer apps, which have gained in popularity in recent years.
Nineteen banks, including Bank of America Corp, Capital One Financial Corp, JPMorgan Chase & Co, US Bancorp and Wells Fargo have teamed up to make Zelle, a P2P payment feature that integrates into banking apps. Zelle lets users instantly send and receive P2P money transfers using the existing contacts on their mobile device regardless of where they bank.
Last week Bank of America became the first of the 19 banks to offer Zelle’s P2P payments functionality to its customers. Zelle is in the process of being progressively rolled out by members of the consortium in an effort to take on archrival Venmo, which processed a record $17.6 billion in transactions last year.
Michelle Moore, Head of Digital Banking at Bank of America stated, “As one of the first banks to offer mobile banking a decade ago, we’re excited to usher in a new era of high-tech, high-touch banking”.
“In 2017, you’ll see a strong focus on payments and intelligent solutions that will deliver personalized experiences clients never imagined were possible,” she continued.
Although members of the Zelle network reserve the right to charge customers for money transfers, Bank of America will refrain from doing at this stage. It’s thought that other banks will follow suit, as the Venmo app is currently free to use.
Zelle was developed by Early Warning, a leader in financial technology systems and collaboration in the financial sector to help banks attract users to their flagship banking applications. The company also operates clearXchange digital payments network that allows people and businesses to send and receive money from anyone with a US bank account.