Zelle Posts Strong Increases in Volume And Financial Institution Membership

Zelle, the peer-to-peer payment network operated by Early Warning Services LLC, reported Thursday that consumers and businesses sent 2.3 billion in payments totaling $629 billion through the network in 2022. On a year-over-year basis, transaction volumes through Zelle increased 26%, and total transaction value increased 28%.

Small businesses continue to be a substantial driver of growth. In 2022, small businesses such as landlords, house cleaners, landscapers, and consultants received more than 150 million payments totaling more than $72 billion, up 77% and 84%, respectively, from 2021.

In addition, the number of unique small business senders increased 66% from a year earlier. Those users sent 133 million payments totaling more than $87 billion in 2022.

Early Warning argues one of the benefits of Zelle’s growth for financial institutions that offer the service is that Zelle users tend be more engaged and in turn generate more revenue for their financial institution. A recent study by Curinos, a New York-based management consulting firm, found that new Zelle users in the test group made 5.1 additional debit transactions per month, on average, compared to 1.7 for users in the control group during the first 12 months. The biggest jump in additional debit transactions for new users occurred during the first three months, when the test group made 2.7 additional debit transactions, compared to 0.2 for the control group. 

From a revenue standpoint, each new user generated $16 in interchange revenue during their first 12 months of using the network, and $3 in ATM revenue.

“Our study found that Zelle drives more primacy to users’ checking accounts,” Hank Israel, director at Curinos, says in a prepared statement. “The more people use Zelle, the more they tap those same checking accounts to pay for goods and services they might otherwise have paid for with check, cash, or other P2P.”

Currently Zelle has more than 1,800 financial institutions live on the network, a 40% increase from a year earlier. Of the financial institutions that joined the network the past year, 97% have less than $10 billion in assets.

Zelle also touted its ability to protect consumers from fraud and scams, noting that more than 99.9% of payments on the network were sent without any report of fraud or scams. That percentage continues to improve, the network says. In late 2022, fraud and scams on the network caught the attention of U.S. Senators, which after investigating the network, pressured it to reimburse scam victims.

“Banks and credit unions of all sizes are joining the Zelle Network at a rapid pace,” Early Warning Chief Executive Al Ko says in a prepared statement. “The sheer volume sent through our network— more than a trillion dollars in the past two years — shows that consumers and businesses trust Zelle for the financial moments that matter.”