Zelle, traditional banks’ answer to Venmo and Paypal, continues to grow in usage, not only with customers but with banking institutions as well, according to reports.
Zelle’s operator, Early Warning Services, reported a Q4 payment volume of $35 billion, which is up 12 percent from Q3 and 61 percent from a year before. Also, 135 million transactions were processed during that same time.
PayPal, which owns Venmo, hasn’t reported Q4 numbers yet, so it’s hard to compare with Zelle. Zelle has outperformed Venmo with volume, but not with PayPal’s branded money transfers. The Cash app, owned by Square, doesn’t release a lot of details about its business, so it’s hard to tell how well the app is doing.
Zelle’s growth has been boosted by a reliable influx of new banking institutions that have begun to use the service. A number of small community banks and credit unions have been adding Zelle, mostly because they want to up their technological services to customers.
One main thing that stands out the most about Zelle is its average transaction amount, which hovers around $258. Venmo is thought to be more for younger people paying each other for services like gas or groceries, but Zelle seems to be used for more high-ticket transactions.
“Certainly those rent and utility payments are keeping it at higher dollar volumes,” said Lou Anne Alexander, the group president of payments at Early Warning. However, Zelle’s average transaction amount has actually dropped, from around $400 about a year ago. Alexander said this probably means customers are using the money transfer service more for everyday payments, as opposed to just larger payments at the beginning of the month.