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Though Zelle has shown promising early growth, it fell short of its goal to have 33 banks on the network and still runs on plumbing that is more than 40 years old.
The stakes are high for the banks, which are trying to find their place in a world that’s moving rapidly toward digital payments. Zelle represents one of banking’s biggest attempts to build its own systems to compete against financial-technology startups and to prevent customers from roaming to other firms for their financial needs. The market is growing rapidly: The U.S. volume of person-to-person payments sent online or via mobile phone increased 21% to $348 billion in 2017 from the previous year, according to advisory firm Javelin Strategy & Research. In the second quarter of 2018, Zelle handled $28 billion in payments, up 12% over the previous quarter. PayPal recorded about $33 billion of person-to-person payments in that same period, up 10%. That included $14 billion from Venmo and $19 billion from PayPal’s namesake app and Xoom, its international remittance service.
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