Research: Zelle Responds to Member and Credit Union Needs

woman park smartphone Zelle
By Sean Loosli

3 minutes

P2P convenience, speed and security are valued by members, while credit unions benefit from revenue and deepening member relationships.

After watching their customers split the cost of happy hour tabs, share utility bills, pay rent and gift money using third-party P2P payment apps, several banks worked with Early Warning Services, LLC, to find a solution. While most had their own branded payment services, each agreed that creating a payments network with EWS would allow them to compete in the marketplace at a broader scale. In 2017, EWS launched a peer-to-peer payment solution available to be embedded in their banking apps.

Known today as Zelle, the new payments platform intended to unite a fragmented industry around a new standard for fast payments. Different from the fintech apps of the day and possible only through collaboration between financial institutions, money could now flow directly from one bank account to another within minutes for enrolled users. 

Fast-forward to today and the impact of the Zelle Network has been enormous. No longer just a handful of banks, the network has grown to include more than 1,800 other banks and credit unions—and 90% of FIs that have signed have assets under $10 billion. Five billion payments totaling nearly $1.5 trillion have flowed through the network, with more than 99.9% of transactions having been sent without any report of fraud or scams.

New research from CUESolutions provider Cornerstone Advisors and Curinos indicates the lasting impact of Zelle on consumers and their banks and credit unions.

Consumers Demand Convenience, Speed and Security

Cornerstone asked why consumers started using P2P since 2020, and convenience (61%), speed (51%) and security (44%) were the top three reasons. Transacting without the other party having to create an account with the digital payments tool is the top feature consumers would find most useful.

Earlier research found seven in 10 consumers request to have Zelle in their mobile banking app, and Cornerstone Advisors found “nearly 30% of community-based FIs have replaced or selected a new P2P payments application—often choosing Zelle—in the past three years.” The study also noted that three-quarters of consumers say they will take action if their primary checking account provider stops offering P2P payment capabilities, going so far as to open a checking account with a different financial institution.

More Value for Financial Institutions With P2P

It’s not just consumers who see the value of Zelle. A separate study by Curinos found that FI revenue from new Zelle customers increased year-over-year by an average of $25 more than non-Zelle customers.

Curinos also found Zelle deepened customer relationships and significantly higher engagement levels among Zelle users than customers who didn’t use Zelle. On average, new Zelle users had five additional monthly debit transactions (debit card and ATM)—a year-over-year difference three times greater than those that didn’t use Zelle. The impact of Zelle on previously disengaged FI customers (defined as zero ACH activity and fewer than two monthly checks) was also substantial—driving an average increase in year-over-year revenue of $43.

Zelle and its positive impact on members and credit unions could not have been possible without collaboration across banks and credit unions of all sizes.

Sean Loosli is head of consumer and small business payments for Zelle.

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