TL;DR: Consumers and small businesses alike want fast, easy digital payments options. If your financial institution isn't in the Zelle Network®, you might see business opportunities—and customers—slip away.
Zelle® gives financial institutions a home court advantage.
Digital payments aren't just gaining in popularity these days; they've become a fundamental feature of modern banking. As digital payments solutions continue to emerge and competition intensifies, financial institutions (FIs) need to offer customers a fast, easy and secure way to send and receive money.
Why is that so important, you ask? Because nearly 80 percent of consumers say instant payments are the most important feature their bank could offer.1
Let's say that again . . .
The. Most. Important. Feature.
The good news? When it comes to speedy payments, banks and credit unions have a home court advantage. FIs can implement solutions that let their customers send and receive money quickly, directly from their bank accounts – with no stops in between.
With Zelle®, FIs can give customers a payments solution that cuts receipt times from days to typically within minutes.2
On the flip side, FIs that haven't joined the Zelle Network® risk losing out to competing institutions. Indeed, about 75 percent of consumers who send money using a payment service like Zelle® or from their FI's website said that if their primary checking account provider stopped offering that capability, they'd take action—such as closing their account, using an account from a different bank more frequently, or opening an account with a different institution.3
Zelle® usage is rising and small businesses are joining the party.
Consumers and small businesses sent 2.9 billion payments through Zelle® totaling $806 billion in 2023. That's a 28 percent increase from the previous year. And while consumers may account for the biggest portion of Zelle® usage overall, small businesses experienced higher rates of year-over-year (YoY) growth—for both the number of payments sent and total amounts.4
Most small business owners and gig workers—roughly 80 percent— accept digital payments using tools like Zelle®. In addition to accepting payments, small businesses are increasingly using digital payment tools to send payments to vendors, employees, landlords and more.5
The growing use of Zelle® through banking apps demonstrates the confidence people have in making digital payments through their FIs. Julie Conroy, chief insights officer at Datos Insights (formerly Aite-Novarica Group), notes that Early Warning—the owner and operator of the Zelle Network®—has been developing fraud detection and prevention solutions for decades, and its “pursuit of protecting consumers and the industry adds much-needed layers of security to the payments ecosystem."4
Smaller FIs are flocking to Zelle®.
Community banks and credit unions are already fighting an uphill battle to compete with the big, national banks. Now, they need to keep up on the digital payments front too.
The good news? With Zelle®, smaller FIs can offer their customers the same fast and easy payment solution as the nation's biggest banks.
More than 2,100 FIs are part of the Zelle Network® and dozens more are joining every month. And while many of the nation’s largest banks are already in the network, it's the smaller ones that are moving quickly to shore up their digital payments strategies with Zelle®:
Ninety-seven percent of FIs that joined the Zelle Network® in 2023 had assets of under $10 billion and 72 percent had assets of under $1 billion.
Zelle® or miss out . . . on what, exactly?
With Zelle® implemented, FIs in the network own the transactions that previously occurred outside their banking app.
That translates to a big missed opportunity for FIs that haven’t joined the network. Because in 2023 alone, 120 million consumer and small business user accounts used Zelle® through their FI.4
And the ZOMO (Zelle® or miss out) doesn’t stop there.
Customers who started using Zelle® through their FI became more engaged with their banking app, conducted a higher number of digital transactions—and in turn, generated more revenue for the FI:6
- After a year of using Zelle®, previously disengaged consumers averaged four times more debit card transactions than the control group.
- New Zelle® customers increased YoY revenue by an average of $25 more than non-Zelle® customers, including:
- Interchange revenue (from higher debit card transactions)
- Net interest margin (from higher average balances)
- ATM revenue
- For FIs, the additional revenue began accruing almost immediately after the customer started using Zelle®.
Want the cure for ZOMO? Visit P2P Payments with Zelle® | Early Warning to learn more.
Source: EPAM, Consumer Banking Report 2024, February 2024
U.S. checking or savings account required to use Zelle®. Transactions between enrolled users typically occur in minutes.
Source: Cornerstone Advisors, The Impact of Digital P2P Payments on Community-Based Financial Institutions, December 2022
Source: Zelle®, Zelle® soars with $806 billion transaction volume, up 28% from prior year, March 2024
Source: Cornerstone Advisors, The Impact of Digital P2P Payments on Community-Based Financial Institutions, December 2022
Source: Curinos Report, Zelle® Usage Drives Customer Engagement