Big Bank-Backed Zelle Expected to Lead P2P Pack This Year

It looks like Venmo’s reign in the peer to peer payments space is coming to an end. That’s because Zelle — the result of a partnership between 30 U.S. banks — is poised to overtake Venmo this year and dominate in the years ahead. This prediction comes from eMarketer who also offered expected growth numbers for rival Square Cash.

According to eMarketer, Zelle will swell its user base from 15.8 million last year to a whopping 27.4 by the end of 2018. As a result it will likely leapfrog over the popular Venmo, which they anticipate will add 5.6 million users from 2017 to end this year with 22.9 users. At the same time, Square Cash will remain a distant third, ending 2018 with an estimated 9.5 million users. Notably eMarketer did not offer predictions for other P2P services such as Apple Pay Cash or Google Pay.

As surprising as Zelle’s expected overtaking of Venmo may be, what’s even more impressive is the platform’s growth trajectory from there. By the end of 2022, eMarketer estimates that Zelle will maintain 56.1 users. That would put it far ahead of Venmo’s anticipated 38.7 million and Square Cash’s 16.2 million users.

Speaking to the company’s findings, eMarketer forecasting analyst Cindy Liu said that Zelle, “has catapulted itself to the top of mobile P2P payments, rivaling more established apps such as Venmo.” She went on to note the role the various banking partners have played in the platform’s launch, saying, “One of the main hurdles new apps face is building trust and a sizable audience. But Zelle has leapfrogged the early stages of adoption by having the benefit of being embedded into the already existing apps of participating banks.”

This isn’t the first sign of Zelle’s success that we’ve seen. Back in April, Bank of America CEO Brian Moynihan noted that P2P payments were “getting more meaningful” when it comes to changing banking operations and making them more efficient. Meanwhile, some analysts have suggested that Zelle’s “bare bones” experience makes it less intimidating for older users when compared to traditionally Millennial-focused apps like Venmo and Square Cash.

Of course, the growth of Zelle also means growth for P2P overall. To that point eMarketer estimates that the total number of mobile P2P users will grow to 82.5 million this year — up 30% year over year. That figure means that more than 40% of all U.S. smartphone users are utilizing some kind of P2P platform. In terms of dollars, P2P payments are expected to hit $167 billion this year (up 37%) and are on pace to top $300 billion within the next three years.

These latest figures show that as successful as many FinTech firms have been, they’re still no match for the scale that big banks hold. That said it’s worth remembering that Zelle isn’t just the effort of one large bank but 30 working in cooperation. Furthermore, even if Zelle does end up taking the lead in the P2P space, there still seems to be room for Venmo, Square, et al as mobile payments and other FinTech features gain popularity. Overall this revelation is just another example of how technology is changing the face of banking in the future.


Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded in 2015 to focus on personal finance and the emerging FinTech markets.

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