U.S. banks add pieces to new instant payments network
- Energy weighs on S&P, Dow; techs boost Nasdaq
- Equinix (EQIX) Announces $3.6B Acquisition of Data Center Portfolio from Verzion (VZ)
- Trump Wants to Cancel New Air Force One Order with Boeing (BA)
- Roper Industries (ROP) to acquire Deltek in $2.8B Deal
- GoDaddy (GDDY) to Acquire Host Europe Group in ~$1.8B Deal
Find out which companies are about to raise their dividend well before the news hits the Street with StreetInsider.com's Dividend Insider Elite. Sign-up for a FREE trial here.
By David Henry
(Reuters) - By the end of December some U.S. bank customers may begin to notice features of the new Zelle instant payments network appearing on their mobile phone and online banking apps as the financial industry tries to catch up with technology company rivals, such as Venmo.
Paul Finch, chief executive of the bank network operator, Early Warning Services, said during the weekend that buttons on user screens for digital payments at some banks will gradually start to use a uniform procedure for individuals to send and receive money.
Then early next year about 20 banks will put the Zelle name on their mobile apps and web pages. A Zelle app also will be offered to the public for connections through other institutions.
The consortium is taking a series of steps in its attempt to bring more than 100 million customers of banks and credit unions into Zelle without disrupting people who already use other ways to send money with phones and computers.
"This is about creating a wide, and inclusive, alternative to cash and checks for everyone," said Finch, who was at the Money 20/20 payments industry conference in Las Vegas to promote Zelle for its bank owners.
Michelle Moore, digital banking chief at Bank of America, said that in December her bank will add to its mobile app Zelle's tool for dividing a bill, such as a dinner tab, and email and text requests for reimbursement from several people.
The moves come five years after three of the biggest banks -JPMorgan Chase & Co, Bank of America Corp and Wells Fargo & Co - formed a joint-venture, initially called clearXchange, to make it easier to send money to accounts at different banks.
The banks were slow to bring other financial institutions into the fold and market the network and lost momentum to technology company upstarts. Citigroup Inc did not agree to join until September. The banks only recently decided to use the name Zelle.
In the meantime, Venmo appeared. In the three months through September, Venmo processed $4.9 billion of person-to-person payments, up 131 percent from a year earlier.
Venmo, now part of PayPal Holdings Inc, built its following by social networking young adults ready to share dinner tabs and apartment rents with their phones.
But the banks have larger bases of customers to connect as they try to make Zelle ubiquitous. JPMorgan's Chase "Quick Pay," for example, processed $7.4 billion in the three months ended September, up 36 percent from a year earlier, according to bank spokeswoman Rebecca Acevedo.
The initial set of 19 banks to offer Zelle early next year has about 76 million customers using mobile banking apps and about 65 percent of U.S. checking and savings accounts, Finch said. Agreements in place with additional financial institutions, debit card networks and other payment companies, such as Fiserv Inc, will bring the portion of accounts to 90 percent to 95 percent, Finch said.
The bank consortium owners decided that for Zelle to succeed it needs to look and work the same for everyone. But some banks already have made digital payment brand names, such as JPMorgan's Quick Pay, familiar to many of their customers. Those banks will use the Zelle name prominently alongside their established names as Zelle catches on, Finch said.
(Reporting by David Henry in New York; Editing by Bill Trott and Andrew Hay)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Starwood Property Trust (STWD) Prices 17.8M Share Stock Offering for Proceeds of ~$394.3M
- Ukraine feels let down by EU with visa deal elusive
- Glencore raises money for Kurdish oil deal, likely short of target: sources
Create E-mail Alert Related CategoriesReuters
Related EntitiesJPMorgan, Citi, Bank of America, Wells Fargo
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!