Early Warning And Its Zelle Network Celebrate Five Years of Rising P2P Volume

Underscoring the rapid growth of digital payments between individuals, the Zelle Network early Thursday celebrated five years in business with numbers showing it has processed more than 5 billion transactions worth almost $1.5 trillion. In that time, almost 1,700 banks and credit unions have added Zelle to their mobile apps, according to Early Warning Services LLC, the bank-owned company that launched Zelle in June 2017.

The news comes as Zelle and the seven big banks behind Early Warning have become the focus of inquiries launched by a group of eight U.S. Senators regarding how the network handles fraud resulting from transactions by users who are hoodwinked into making transfers.

The network, which competes with peer-to-peer payment services such as PayPal Holdings Inc.’s Venmo, also stressed other functions that have been attracted to Zelle’s real-time payment capability, including rebates, insurance payouts, and legal settlements. The number of disbursements, indeed, rose fully 87% in the second quarter of the year compared to the first three months, according to Thursday’s announcement. Almost 8 million workers, contractors, and customers received payments via Zelle from small businesses during the quarter.

“Zelle has transformed the way more than a hundred million people move money and conduct digital transactions,” Al Ko, chief executive at Scottsdale, Ariz.-based Early Warning, said as part of the company’s Thursday release. Ko took over the company in 2019 after spending 13 years at the software firm Intuit.

In the second quarter of the year, the network handled $155 billion in payments, up 29% year-over-year, while transactions grew 27% to 554 million.

Early Warning has long stressed safety for users, noting in its Thursday release that 99.9% of payments are now sent without reports of fraud or scams. The network also said it cautions users to use Zelle only when sending money to people with whom they are well-acquainted. The Senate inquiry concerns transactions authorized by users who have been tricked by fraudsters.

In addition to the action in the Senate, a draft bill emerged this summer in the House of Representatives to amend the 44-year-old Electronic Funds Transfer Act to explicitly cover instances where consumers authorize transactions as a result of fraudulent inducement.