Among millennials, Venmo is hot. In the third quarter, PayPal's mobile person-to-person payments app processed $4.9 billion in transactions, up 131% from a year earlier. The app is used for splitting bills — checks, rent, grocery bills, travel expenses — and allows for sending messages with the payments.

In perhaps the ultimate sign of its staying power, Venmo, like Google, has become a verb. On college campuses, the phrase "Venmo me" is synonymous with "send me cash."

Should banks bother trying to catch up? Should they even want to? And if so, can they?

The answer to the first two questions is yes, and look for a major effort on that front in the coming year.

Big banks aren't newcomers to the mobile P-to-P space. JPMorgan Chase and Bank of America each processed about $21 billion of P-to-P payments in 2015 through their own mobile apps, according to estimates from S&P Global Market Intelligence. But the P-to-P functionality in the apps can be cumbersome for users. And the apps don't always play nice with other banks.

In contrast, Venmo makes paying acquaintances easy: Simply enter the recipient's phone number or email address. Or, if you prefer, allow Venmo to pull in your phone and Facebook contacts and just search by name.

Millennials also appreciate the social component: Optional feeds make it easy for users to tell friends who also use Venmo, or even the entire Venmo universe, about who's spending on what, and with whom.

Money moves instantaneously between PayPal accounts, but takes several days to make it to linked bank accounts.

The big banks, which have been working on their answer to Venmo through their clearXchange joint venture since 2011, get criticized for moving too slowly while a deluge of other fintech and social-media competitors piled in with offerings of their own.

In 2016, the banks merged clearXchange with the bank-owned Early Warning Services and then rebranded it as Zelle, short for gazelle. The Zelle app goes live in 2017, with 19 mostly large banks signed on. It will be available to many others through their vendors, as the industry's unified P-to-P play.

"We've made far more progress than we're given credit for," said Gareth Gaston, executive vice president for omnichannel at U.S. Bancorp, one of Zelle's owners. "The goal is to make this a ubiquitous product in the industry."

Mobile P-to-P payments might generate more expense than revenue for banks. PayPal has struggled to make money off Venmo despite its growth. While some have tried, no one has found a palatable way to charge for the service. Those who control the space could eventually win other e-commerce and other payments business, but that remains a work in progress.

Even so, as keepers of the accounts, banks have some inherent advantages when it comes to payments — and some clear reasons for wanting to control that business. "As a bank, you don't want to give your customers a reason to go somewhere else," said Zil Bareisis, a senior analyst with Celent.

As the moniker suggests, speed is Zelle's biggest selling point. With Early Warning, banks' fraud- and risk-management effort, playing the role of traffic cop, the app can create the appearance that payments are being processed in real-time (even though they're actually run on banks' Automated Clearing House system). "If you have two banks with a relationship as part of Zelle, an account can be credited immediately," even if it takes a day to officially clear, Bareisis said.

Bank-grade security and reliability are other potential pluses. Banks are viewed as more trustworthy than tech companies, and some social media-based P-to-P apps, such as one offered by Snapchat, have been prone to slowdowns and delays.

PayPal has responded to Zelle's arrival by strengthening its ties with Visa, which also has designs on expanding into mobile payments and the network to pull it off, but Gaston said the business is ultimately banks' to lose. "The incumbent competitors are a little bit of a sideshow," he said. "We can provide customers with something nobody else can — a very integrated experience with a genuine real-time transaction."

It will be difficult for Zelle to overcome Venmo's head start among millennials, Bareisis said, but there's room for more than one winner in P-to-P. Javelin Strategy & Research predicts that 126 million Americans will use mobile P-to-P payment apps by 2020, up 50% from today.

"Zelle won't kill off Venmo, but there will be customer segments that appreciate Zelle's affiliation with banks," Bareisis said. "The market is big enough that they can coexist."