Use cases for Early Warning’s Zelle network are expanding, with rent, bill payments and corporate disbursements among the key drivers of growth.
Zelle processed $127 billion of payments in the third quarter, up 51% from $84 billion a year earlier, while total transactions rose 44%, to 466 million, during the quarter, Zelle announced Wednesday.
Rent payments increased about 68% over Zelle in the past year, Early Warning CEO Albert Ko said in an interview.
“The majority of rentals are owned by single owners, not megabusinesses, and we’re seeing tremendous traffic from people paying rent to roommates and landlords through Zelle,” he said.
Early Warning can often deduce the purpose for many peer-to-peer payments by analyzing the amount, frequency and details users include in Zelle’s memo field, Ko said. The average consumer-initiated Zelle transaction is $273, a slight increase from $261 a year ago.
Zelle payments from consumers to small businesses — including bills —soared 144% during the third quarter, to $11 billion, from $4.5 billion for the same period a year earlier, according to the company.
Total corporate disbursements paid during the period rose 65%, to 573,000 transactions, with insurance payouts the leading type of disbursement. The average size of a disbursement payment over Zelle is $1,138.
The largest Zelle payment to date was $3.3 million sent by an insurance company to cover losses for a home destroyed in last year’s wildfires, Ko said.
Allstate has been using Zelle for instant payouts of insurance claims since 2017, and Early Warning is in discussions with several other major insurance carriers that are considering adding Zelle for this purpose, Ko said.
Colleges and universities are also big drivers of Zelle disbursement payments.
“We have many top colleges, including Yale, using Zelle as the primary method to deliver student reimbursements and per-diem payments for employees and student-athletes,” Ko said.
Zelle is preloaded on 74% of all mobile banking apps, according to Ko. More than 1,200 U.S. financial institutions offer Zelle, with 600 more planning to install it, Early Warning said.
It’s not clear whether Zelle — which touts the near-instant arrival of funds in the recipient’s account — is displacing other popular P2P methods like Venmo and Square’s Cash App, which can take up to three days to deliver funds.
“What’s clear is that Zelle is directly replacing other types of transactions, like checks and cash,” Ko said.
