SCOTTSDALE, Ariz.–A new analysis shows that during Q4 2018 Zelle processed $35 billion in P2P payments versus $19 billion for Venmo, and that for the full year Zelle's volume was $122 billion, almost double Venmo's $62 billion.
But a consumer study from Q2 and Cornerstone Advisors reveals additional nuances in understanding who's winning--and who will win--the P2P payments battle
The analysis, by Cornerstone's director of research, Ron Shevlin, identified “five facts” about mobile P2P payments that the report said makes “calling a winner at this point a bit premature.” Those five facts include:
- Banks are the real (current) leaders in the P2P payments race. “Consumers moved more than $172 billion in funds to other people through their banks in 2018--and that doesn't count the $8 billion and change that was transacted through PopMoney,” stated Shevlin. “In addition, consumers transferred nearly $142 billion through PayPal.” The report noted that with nearly 230 institutions signed up, but only 60 currently offering the service, “Zelle is poised to cannibalize the bank volume and overtake PayPal for the top spot (based on dollar volume).”
- Venmo adoption beats Zelle adoption. “Only about a quarter of young Millennials (those in their 20s) use Venmo--roughly the same percentage that smartphone-owning Gen Xers do. Overall, just 12% of respondents are Zelle users,” stated Shevlin.
- Most mobile P2P payers use more than one service. “Of Millennials and Gen Xers who make mobile P2P payments (most do), half use three or more services,” according to the report. “And among smartphone-toting Baby Boomers, two-thirds use more than one service (typically PayPal and their bank's).”
- Transaction size varies by service and age. “Judging by the data, Young Millennials must dine at really expensive restaurants. Either that, or they're using Venmo to pay their roommates for their share of the rent, or using the app to pay the landlord directly,” the report stated. “Conversely, Boomers are making huge payments through Zelle,” likely reflecting numerous account-to-account transfers.
- Google Wallet beats out Venmo and Zelle for potential use as a debit card. “In a previous study, Cornerstone asked consumers how likely they would be to use the P2P providers if they offered a general use debit card. While PayPal was the clear winner there, a slightly higher percentage of respondents across each generation expressed interest in Google Wallet than in Venmo or Zelle,” Shevlin said in the analysis..
The analysis also asked, “With the threat of PayPal/Venmo, Apple Pay, and Square Cash moving into retail payments, those services may cannibalize banks' existing debit activity. Will offering Zelle help them stem that tide?”