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Spurred by rising demand from consumers and businesses alike for real-time digital payments, the peer-to-peer payments service Zelle continued to post strong double-digit growth in transactions and dollar volume in 2021. The bank-owned network, operated by Early Warning Services LLC, reported its latest results early Wednesday.
Consumers and businesses sent 1.8 billion payments through Zelle during 2021, up 49% from a year earlier. Those payments totaled $490 billion, up 59%, from the previous year. In the fourth quarter alone, consumers and businesses initiated 502 million transactions totaling $137 billion.
“We are living in a digital age and real-time payments are crucial,” says Laura Menken, vice president, product line, for Zelle. “P2P payments are replacing cash and check for everyday payments, such as rent and disbursements.”
A key factor in Zelle’s growth is that consumers and businesses know and trust the brand, according to Menken. As a result, “our volumes are regularly [twice] that of our competitors,” she adds. Zelle’s closest brand-name competitor, Venmo, recorded $230 billion in volume for 2021, with $61 billion for the fourth quarter, according to numbers released Tuesday by its parent company, PayPal Holdings Inc.
Small and large businesses are another driving force behind the network’s growth. Businesses, such as property managers, contractors, and health and beauty providers, are using Zelle to send and receive money. In 2021, payments received by small businesses increased 162% over the previous year.
Merchants are helping to build consumer awareness for using Zelle beyond P2P payments by promoting its acceptance at the point of sale. Last year, Zelle began introducing to member banks QR codes that can then be made available to merchants for display at the point-of-sale. Four member institutions so far are using the Zelle QR codes, and Zelle plans to roll them out to all members this year.
On the disbursement side, Fortune 500 companies, universities, and national non-profits are using Zelle as a fast, safe alternative to sending checks, Early Warning says. For example, insurance companies used Zelle to disburse claims to consumers in California whose homes were damaged by wildfires in the past year, Menken says.
Zelle continues to grow the number of member financial institutions in the network, adding 3,000 new member institutions in 2021. The network now has nearly 10,000 member financial institutions.
