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"By offering QR-based digital payments, smaller retailers Early Waning reported that Zelle was used to move $75
[can drive sales and improve customer stickiness] with billion in P2P payments last year. That's more than twice
little to no investment beyond the phone they already the yearly total sent via Venmo in 2017, which was $35
have," Jorn Lambert, Mastercard executive vice president billion according to PayPal. And data from the first quarter
of digital solutions, said in a statement. of 2018 suggests Zelle payments continue to outstrip those
processed through Venmo.
P2P mobile payments chart triple-digit growth
In the United States, P2P payments are charting significant Venmo continues to count more users, but Cindy Liu,
growth, but cash and checks dominate the payments mix. forecasting analyst at eMarketer.com, said Zelle is on
Among Americans who made P2P payments in 2017, 50 track to soon surpass Venmo in total users as well. Liu is
percent said they used cash, followed closely by PayPal (48 forecasting that Zelle will have 27.4 million users by year-
percent) and check (41 percent), according to a survey by end 2018, up from 15.8 million at year-end 2017, and that
Aite Group LLC. Venmo will grow its user base from 17.3 million in 2017
to 22.9 million this year. Square Cash runs a distant third
In all, Aite estimated U.S. households initiated 8 billion with an expected 9.5 million U.S. users by year-end 2018.
P2P payments in 2017 totaling more than $1 trillion. The
most common reasons: various types of gifts and paying "One of the main hurdles new apps face is building trust
individuals for goods and/or services. and a sizable audience," Liu said. "But Zelle has leapfrogged
the early stages of adoption by having the benefit of being
Mobile-initiated payments account for fewer than one in embedded into the already existing apps of participating
10 of total P2P payment dollars today, but Aite's senior banks."
analyst Talie Baker said mobile channel adoption is
gaining. "People are starting to understand the technology, Liu expects the number of Americans making mobile P2P
and they're starting to use it," she said. "When we did the payments to grow 30 percent this year to total 82.5 million
survey in 2015, 22 percent [of consumers making P2P people, or about 40.5 percent of U.S. smartphone users.
payments] said they had made mobile P2P payments [the The total value of domestic mobile P2P payments in the
year before]. Three years later, it was almost half," Baker United States will grow 37 percent and total $167.08 billion
said. this year, Liu predicted.
Multiple options could skew uptake
Sarah Grotta, director of the debit and alternative
products advisory service at Mercator Advisory Group The existence of multiple options for mobile P2P payments
Inc., suggested online and mobile P2P payments may soon has a downside: lack of interoperability and the need for
rival debit card usage. "We are finding that consumers are consumers to manage multiple mobile payment apps.
just as likely to say they use a debit card as they are a P2P
product," she said. "Especially for older generations, we think multiple
apps hinders adoption," Baker said. Older Americans are
Baker added, "I would expect over the next five years to generally less inclined to use their mobiles to initiate P2P
see a huge move to mobile payments, particularly with payments, but they don't reject it out of hand. Nearly 70
Zelle and Venmo." percent of millennials and nearly 50 percent of Gen Xers
who made domestic P2P payments in 2017 used a mobile
Zelle leapfrogs toward dominance payment app, Aite found; just 24 percent of baby boomers

Zelle is a mobile P2P payment network launched by a and 14 percent of preceding generations (the silent and
consortium of banks to compete with PayPal's mobile app, greatest generations) who made domestic P2P payments
Venmo, and Cash, Square's P2P app. As of late April 2018, did so via their mobiles.
over 100 banks (including many of the nation's largest)
were either on Zelle or committed to joining the network, In a report on the survey findings, Person-to-Person
according to Early Warning Services LLC, which operates Payments: How Americans Pass the Buck, Baker said ubiquity
Zelle. must be a key driver of mobile P2P payments. "Ubiquity in
mobile P2P payments will not exist without interoperability
Zelle lets consumers send money directly from their bank between services," she wrote. "Forward-thinking mobile
accounts (accessed using existing mobile banking apps) P2P providers that solve the interoperability problem will
to the accounts of other consumers using only recipients' surely be the ones that win the race to dominate the P2P
email addresses or mobile phone numbers; good funds are payments market."
typically available within minutes. Customers of banks
not on the network can download an app from Apple or Patti Murphy is Senior Editor of The Green Sheet and President of
Google Play and direct Zelle payments to their debit cards. ProScribes Inc. Follow her on Twitter at @GS_PayMaven or email her at
patti@greensheet.com.

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