(Bloomberg) -- Zelle, the peer-to-peer money transfer app, said network transactions jumped 27% during the first half of the year, with payments totaling almost $500 billion.
Consumers and businesses conducted 1.7 billion transactions across 143 million accounts during the first six months of 2024, according to a statement Thursday. Zelle is operated by Early Warning Services LLC, a consortium of major banks including Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. The average value of a transaction in the second quarter was $281.
Founded in 2017, Zelle was launched several years later than other payment services such as PayPal Holding Inc.’s Venmo or Block Inc.’s CashApp. Despite not having a first-mover advantage, Zelle has caught up to Venmo and CashApp, in large part because of its integration with banking apps, which offered immediate and widespread distribution.
Early Warning, based in Scottsdale, Arizona, has embarked on several initiatives to reduce scams on Zelle after it became the subject of a 2022 review on fraud from Massachusetts Senator Elizabeth Warren. Early Warning says 99.95% of payments are sent without a report of fraud or scams. Still, the high transaction volume on the platform means that potentially fraudulent transactions could result in millions of dollars being lost.
Early Warning’s Paze digital wallet, designed to eliminate guest checkout for online transactions, went live this year. Like Zelle, Paze was launched into a market with established incumbents. Paze’s advantage could be the integration with banking apps, where individuals can activate their Paze wallets. Once enrolled, all of a consumer’s credit and debit cards across banks will be available for use through the wallet. Currently, Paze is available for 125 million credit and debit cards across the US.
“On the Paze side there is a strong group of incumbents and we are not first,” Cameron Fowler, chief executive officer of Early Warning, said in an interview. “We believe strongly that, similarly to Zelle, the clarity of focus on trust in your bank, convenience and security is the combination to fill the gap that still exists in online checkout.”
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