HOBOKEN, N.J.–Upstart peer-to-peer payments solution Zelle has started to gain some ground on P2P market leader Venmo, which has been popular enough to become a verb among users.
Both Zelle and Venmo allows for users to transfer money to one another even if they use different financial institutions.
Zelle is owned by Early Warning Services, a private company owned by a number of big banks, including JPMorgan Chase, Bank of America, Capital One and Wells Fargo. Zelle was launched in 2017 specifically to capture some of the P2P market dominated by Venmo, which is owned by PayPal.
New research conducted by LendEDU (www.lendedu.com) suggests “competition for top-dog in the P2P industry is heating up more quickly than most expected.”
According to the LendEDU survey, Zelle's main selling points include security and the instantaneous depositing of funds into bank accounts. A mid-2017 survey conducted by LendEDU found 94% of respondents had never heard of Zelle, and only 36% would ever give it a try in place of Venmo.
But nine months later the research finds Zelle, which has received significant marketing support, has started to change perceptions. It needs to be noted that when LendEDU first ran a Venmo-Zelle comparison survey back in July of 2017, the methodology was a bit different; instead of surveying 1,000 Americans from the general population, only 500 Venmo users were surveyed.
Other Findings
The new LendEDU survey has found:
- 42.6% of respondents have heard of Venmo while 29.1% have heard of Zelle; 23.45% of those respondents have used Zelle and 29.64% have used Venmo.
- 29.69% of respondents that have either never heard of Zelle, only use Venmo, or use both Venmo and Zelle, would consider using Zelle as their primary P2P payment app after being told what it is. 35.05% were unsure.
- 22.41% of respondents that have used both Venmo and Zelle have been more satisfied with Zelle, while 20.69% have liked Venmo better. 50% had an equal level of satisfaction.
‘Noticeable Difference’
Even with the methodology change, LendEDU said “there is a noticeable difference in the notoriety and usage of Zelle from that poll to this one. In this poll, 29.1% of respondents had heard of Zelle, while 42.6% had heard of Venmo, and 46.7% had not heard of either (respondents were allowed to answer Zelle and Venmo if applicable).
“In our original Zelle-Venmo survey, only 6.1% of respondents had ever heard of Zelle, indicating that the peer-to-peer payment application backed by the major banks has made significant strides,” the company said.
LendEDU added that since the beginning, Zelle has been playing catchup with Venmo.
“So, how does an app like Zelle make up ground and convert users over from Venmo, a quality app that has kept consumers from needing to look elsewhere?” LendEDU asked, before answering, “One of Zelle's main selling points is the idea that it is more secure than Venmo because it is backed and was launched by the major banking institutions, whereas Venmo is a third-party app. Our survey data shows that pitch may very well be working. Respondents that were more satisfied with Zelle cited the application making them ‘feel more secure’ as the main reason for that happiness. Immediate bank account transfers and the lack of a social feed were also prominent reasons as to why some consumers prefer Zelle. It is worth noting that poll participants could select all answer choices that applied to them.”
The survey data also revealed that the average payment size on Zelle was $89.58, while Venmo's average payment size was $74.37.