- Payments network Zelle has surpassed its competition to become the most used person-to-person (P2P) mobile payment platform in the U.S., eMarketer found.
- Zelle, which is made up of a network of 30 U.S. banks, will jump 73% this year, reaching 27.4 million adult users who have used their phones to make at least one P2P transaction in the past month. That figure is slightly ahead of PayPal's Venmo (22.9 million users) and Square Cash (9.5 million users), which serve as the top three P2P mobile payment platforms.
- This year, the total number of P2P mobile payment users in the U.S. will grow 30% to reach 82.5 million people, or 40.5% of smartphone users in the country, per the study. The total transaction value of those P2P payments will grow 37% this year to reach $167.08 billion, and is expected to surpass $300 billion by 2021.
PayPal and Square helped to pioneer P2P payments through mobile devices, but "Venmo killer" Zelle has an advantage in being supported by major U.S. banks that include the service pre-installed on their apps. That means mobile users really have to be motivated to seek out and use an additional payment method from an app store. Banks also have the advantage of being considered more trustworthy than startups handling people's money, such as Venmo.
P2P payments have become a major focus for banks, with about 43% of payments executives saying they are focused on the service, according to a survey this year by Pymnts.com. That means P2P payments are more significant than contactless payments (18%), price comparison tools (12%) or contextual payments (6.5%).
While Zelle is forecast to dominate the space, that hasn't stopped other companies from developing new payment services. Apple, Google and Samsung also have moved into the space as part of making mobile devices and platforms more useful to their customers, while Amazon is said to be considering a similar feature for its Alexa digital assistant, The Wall Street Journal reports. Social media giant Facebook has also steadily expanded P2P payments on Messenger.
Meanwhile, lesser known companies are also trying to get into the P2P payments game. Mezu is a startup that aims to make mobile payments more secure by letting users exchange money while avoiding the transfer of personal information. The idea here is to make P2P payments more like cash in providing greater anonymity and security online.