Zelle

Depending on the data, Zelle can be seen either as a leading target for fraudsters and scammers, or better than average at stopping these criminals.

The new bank-led digital wallet is signing up financial institutions, but payment experts say broadening its merchant base and reaching consumers will be an uphill climb.

The bank doubled down on promises to use legal action if the Consumer Financial Protection Bureau brings an enforcement action against it related to fraud on the Zelle platform, saying in a statement that it would "not hesitate to seek assistance from courts."

The tech giant is enabling users to pay by holding smartphones together, potentially cutting into the market for Zelle, PayPal and Venmo.

Executives from JPMorgan Chase, Bank of America and Wells Fargo are expected to get grilled in Congress this summer over victims of Zelle scams who don't get reimbursed. A Senate panel has spent much of the last year examining fraud on the bank-owned payments network.

Sens. Sherrod Brown of Ohio, Jack Reed of Rhode Island and Elizabeth Warren of Massachusetts asked Early Warning Services, which operates the payment platform Zelle, to clarify its reimbursement policy around impostor scams.

Corporations and trial lawyers have long fought over whether consumers should be forced into arbitration to resolve their complaints. Now there's a new wrinkle: It's becoming harder for aggrieved customers to even get to arbitration.

The bank hasn't explained why person-to-person payments, bill processing and account-transfer services went down for parts of two days this week. But observers suspect glitches in its legacy systems could occur at other financial institutions and increasingly affect real-time payment networks.

Financial institutions continue to push back against efforts to be held liable when a consumer is tricked into sending a payment that later turns out to be a scam.

The banks that own the peer-to-peer payment network are reportedly considering a retail launch that could fend off rival payment methods — or simply cannibalize the sizable revenue issuers get from credit and debit cards.

Transaction volume soared at the peer-to-peer service in the second quarter. That rising popularity among consumers, coupled with Zelle's relationships with a growing number of transaction rails, could make the network a vital hub in the U.S. push for speedier payments.

Blending its existing technology with new authentication measures, the company aims to cut costs for credit unions that don't want to join the bank-run peer-to-peer network.

Many financial institutions have made initial moves into real-time payments via P2P services, and the use cases will jump over time, says Fiserv's Matt Wilcox.

The person-to-person network is being used more often for purchasing, with consumer payments to small businesses up sharply.

Bank of America has seen a 33% increase in cash gifts flowing through the Zelle P2P app since the start of the pandemic, with total gifting volume reaching $1 billion.

Processing transactions quickly enough to serve digital commerce comes with arduous upgrades and complicated choices, but that's only the stick. The carrot is people like faster payments, so there's plenty of opportunities to boost payment revenue.

CO-OP, a credit union payments firm, has teamed with the fintech to expand usage of digital payments offerings. But it's unclear to what extent members want those services.

The deal is said to be well-suited to the coronavirus era, when in-person transactions have been limited by social distancing and other factors.

The pandemic’s physical distancing requirements appear to have accelerated transaction volume and overall use of Zelle, the P2P app operated by the bank-owned Early Warning Services LLC.

Stephen Ranzini, CEO of University Bank, says The Clearing House's RTP and Early Warning's Zelle handle enrollment, encryption and authentication insecurely.