Zelle reports $32 billion in P2P volume in third quarter

The Zelle network processed 116 million transactions during the July-September 2018 timeframe with a total value of $32 billion in payments.

The number of transactions grew by 16 percent from the prior quarter and the payment volume was up by 14 percent over the same time period.

The financial institutions that use the Zelle network also reported a 10 percent increase in enrollments from their customers, resulting in more than 75 million tokens (mobile phone numbers and email addresses) being issued across its network since inception.

“In the last 12 months, Zelle has processed more than 375 million transactions valued at $106 billion,” said Lou Anne Alexander, group president of payments at Early Warning, in a press release. Early Warning is the bank-run entity that operates Zelle.

PayPal, which offers also offers person-to-person payments under its own brand and the Venmo brand, has also been experiencing significant growth. PayPal reported that Venmo had increased payment volume to $17 billion in the third quarter, up from $14 billion in the second quarter and $12 billion in the first quarter.

Since P2P payments have become so important to PayPal, it began reporting total company P2P payment volume in 2017, in addition to releasing results for Venmo. For the same quarter, ending September 30, PayPal overall (including Venmo) reported its P2P volume growing to over $36 billion, representing approximately 25% of the company’s total payment volume for the quarter.

While P2P payments are increasingly popular among consumers, the bigger picture is not necessarily good for either company.

Despite Early Warning’s success with signing up a large number of major banks and payment processors there has been backlash against Zelle by credit unions due to the infrastructure and IT costs associated with being part of the network. Zelle has had to contend with a headline-grabbing fraud issue such as phishing attacks that exploit Zelle users, according to reporting by TechCrunch.

PayPal been working to drive Venmo an option for retail purchases, in an effort to generate interchange revenue. While it has successfully added Abercrombie and Uber as part of its wave of adding two million merchants to accept the brand as a payment, Venmo also announced it was eliminating support for its browser-based payments this year.

In addition to paring expenses, Venmo also raised its fee for instant transfers from a flat 25 cents to a range of 25 cents up to a maximum of one percent of the transaction value.