By the numbers: Both Zelle and PayPal’s Venmo finished out 2021 strong, with impressive growth in peer-to-peer (P2P) transaction volume.
What’s next: Zelle and Venmo are both trying to push this momentum into 2022.
The bigger picture: US P2P mobile payment transaction value is projected to reach $983.85 billion in 2022, a 25.3% YoY increase, according to our forecasts.
Despite Venmo’s popularity, especially with younger generations, Zelle’s bank-based integration could help it become even more dominant in the P2P space. Its relationship with banks improves customers’ trust in the platform and can attract users who may otherwise be wary of P2P services.
Leaning into this demand for bank-backed P2P systems, community and mid-sized banking association Alloy Labs Alliance launched Chuck, an open network for instant payments that plans to compete with Zelle. Chuck is a network for community banks that offers a lower fee structure than Zelle—although with those lower fees comes a lower transaction ceiling. If Chuck successfully builds out its network and the service takes off, it would increase competition in the space and could cut into Zelle’s growth potential.
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