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Bank of America Corp. reported Friday that it handled $4 billion in Zelle person-to-person payments in the third quarter, up 67% from $2.4 billion a year ago before the Zelle brand went live this past June.
Meanwhile, JPMorgan Chase and Co., the nation’s largest bank, on Thursday reported a 13% increase in merchant payment volume.
Charlotte, N.C.-based BofA is one of the big-bank founders of the Zelle P2P payments service, which is part of Early Warning Services LLC, a bank-owned security company that acquired Zelle’s predecessor, clearXchange, in January 2016. The banks see Zelle, which has online and mobile versions, as their answer to non-bank rivals, especially PayPal Holdings Inc.’s popular Venmo service.
Chief executive Brian Moynihan told analysts Friday morning on BofA’s third-quarter earnings call that the bank handled $500 million in Zelle volume in just one week during the third quarter, according to the Seeking Alpha financial news service. BofA’s Zelle transactions totaled 13.6 million, up 68% from 8.1 million in 2016’s third quarter, for an average payment of $294.12, slightly below the year-ago average of $296.30.
BofA and other clearXchange cofounders developed their individual P2P services and placed them under the Zelle brand last June. Zelle, which posted $33.6 billion in volume in 2017’s first half, enables customers of participating banks to easily send a payment to a customer of another participant. Early Warning also is making Zelle available to regional and community banks through third-party processors.
For mid-sized and small financial institutions, however, P2P payments so far are “lots of hype and no results,” according to new report from Malauzai Software Inc., an Austin, Texas-based developer of mobile-banking applications used by 435 community banks and credit unions. Malauzai says only 1.2% of active digital-banking users are making P2P payments, regardless of device.
BofA also reported that purchase volume in its big debit card portfolio totaled $74.8 billion in the third quarter, up 5% from $71 billion a year earlier.
Meanwhile, JPMorgan Chase, operator of the nation’s largest bank-owned merchant acquiring entity, reported merchant processing volume of $301.6 billion in the third quarter, a 13% increase from $267.2 billion in the year-earlier quarter. For 2017’s first nine months, Chase’s merchant volume is up 12% to $870.3 billion.
