Mobile Payments

The Big Banks’ Coming Venmo Killer

Can the biggest banks in the United States catch up to the millennial-beloved Venmo with their own P2P payments app? They’re sure hoping so and are putting their product, reportedly called Zelle, out for public consumption in October. The hope? That soon the young and hip who are Venmoing each other will be Zelling each other like crazy come the fall.

The service comes care of bank-owned Early Warning, which confirmed the official name to The Wall Street Journal yesterday (Aug. 24). The service is designed for basic simplicity of use: Customers log in via mobile device and zip money from connected bank account to connected bank account across the system. If it sounds a bit familiar, it is probably that the service has been operating for several years under the name clearXchange.

But while well-known within payments and commerce, clearXchange was never marketed as a corporate brand, and only became part of Early Warning earlier this year as part of a change in its ownership structure.

Early Warning specializes in fraud prevention and risk management with a focus on providing instant money transfers among big banks.

Reports indicate that the banks plan to unleash Zelle on Earth during a payments industry conference in October. The banks are hoping to cash in on increased consumer comfort with using mobile phones as a primary part of a financial transaction.

Why choose Zelle for a name — other than the obvious Zelle-on-Earth puns?

One person familiar with the iterative process behind the name suggested that it is supposed to subliminally suggest the service is speedy — like a gazelle.

Early Warning would not confirm or deny the gazelle implications. Nor, apparently, did it have any comment as to whether it was a reference to the Urban Dictionary definition of Zelle as a girl who is both attractive and intelligent.

Other than the precise origin of its name, it also isn’t clear how Zelle will interact with the banks’ current branded P2P offerings, like Chase QuickPay.

So, will people excel at Zelle? It has some big backers, who are strongly motivated to break through to the P2P-loving millennial crowd, especially because those mobile millennials tend to be the higher-spending types that transact more frequently. They are a desirable customer base and not one they are especially eager to surrender to a relative newcomer like Venmo or its slightly scarier parent company, PayPal.

An interesting race and one hard to pick a favorite in early.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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