Digital wallets and P2P payments are fast becoming table stakes for banking providers that want to remain relevant with today’s digital consumers. But which one should your financial institution offer?
Multiple studies conclude younger generations know about mobile payments, but don’t care much about them — a service such as Venmo being the rare exception. After watching Venmo dominate the mobile peer-to-peer (P2P) payment transfer market for the past few years, banks decided to do something about it, and Zelle was born. Banks have invested heavily in perfecting the technology and promoting the service, but consumer awareness and adoption continue to lag.
Members of the bank consortium that runs Zelle — including JPMorgan Chase, Wells Fargo, and Bank of America — are spending millions of dollars on ads to attract their existing customers to the mobile payment app. Zelle, which is already installed on bank customers’ phones (part of their mobile apps), is available to 95 million current bank customers versus Venmo’s user base that totals around 3.5 million. However, the Zelle brand” — aka its “cool factor” — remains practically non-existent.
A quick review on the basics: a payment app is simply a service that allows consumers to send money to another person (often by email or mobile phone number) via an app, or sometimes a website. This process is commonly referred to as “peer-to-peer” or “person-to-person” money transfer apps, or simply “P2P apps” or “payment apps.”