Zelle might be seeing more action from banks in the future, with some of them wanting to add the money-transfer service to the checkout at retailers, The Wall Street Journal reported Wednesday (April 6).
Zelle saw a boom during the pandemic as people avoided ATMs and cut out the use of cash in general, favoring digital transfers.
Zelle saw around 1.8 billion transactions in 2021, which came to $490 billion, over double the level from before the pandemic.
The growth has added more possibilities for Zelle and has also sparked a disagreement among various banks that own it like JPMorgan Chase, Bank of America and Wells Fargo. The disagreement came from whether it’s good for the banks to push a payment option competing with Visa and Mastercard, sources told WSJ.
The report noted that banks collectively earn billions of dollars a year from the fees merchants pay when shoppers use credit and debit cards, so a payment option moving funds between shoppers and merchants’ bank accounts could cut into that.
But Visa and Mastercard set the fees and also take some for themselves. By cutting into the card networks, it would let banks set rules and fees of their own.
The report says Wells Fargo and Bank of America have been in favor of expanding the service to retail payments, while JPMorgan says it’s not the right time to expand Zelle — rather, JPMorgan says it’s time to focus on protection from fraud.
PYMNTS wrote that Bank of America has revealed new data showing how strong the move to online has been, with clients logging on 10.5 billion times in 2021, a 15% climb since the prior year.
In a press release, BoA said it added over 2 million active digital clients last year, a record for it. The bank said it also had 16 million active Zelle users, which also encompassed small businesses.