NEW YORK—Banks are debating a plan to bring Zelle to the checkout at big retailers.
The money-transfer and payments service boomed during the pandemic, when people avoided ATMs and replaced cash and checks with digital money transfers. Zelle recorded some 1.8 billion transactions in 2021 totaling $490 billion, both more than double their pre-pandemic levels, the Wall Street Journal reported.
According to the Journal, that growth has opened up new possibilities for Zelle and sparked a disagreement among the banks that own Early Warning Services, LLC, the financial services company that is owned by Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank, and Wells Fargo.
At the center of the debate is whether it is in the banks’ best interest to promote a payment option that competes with card networks Visa Inc. and Mastercard Inc., according to people familiar with the matter, the Wall Street Journal reported.
Chipping Away
Noting that banks “collectively earn billions of dollars each year from fees merchants pay when shoppers use credit and debit cards,” the Journal said “a payment option that moves funds directly between shoppers’ and merchants’ bank accounts could chip away at that. But Visa and Mastercard set the fees and take some for themselves, and sidestepping the card networks would allow banks to set rules and fees on their own. Zelle’s newfound popularity has some bank executives asking if the service could be the way to do that.”
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