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The whole "their own competitor" (Zelle) thing seems sort of weird. It hit the market well after people were seeing FedNow on the horizon. Why bother building
by hakfoo 3y ago
The whole "their own competitor" (Zelle) thing seems sort of weird.
It hit the market well after people were seeing FedNow on the horizon. Why bother building something expensive that's obviously going to be obsolete in a few years?
If it was meant to compete with PayPal/Cashapp/Venmo, it was 10-15 years too late for that. Anyone who wanted it had it already.
I wonder if the value of Zelle is that it's still a private club. The customer safety and confidence stories have been terrible-- rejecting accountability, ignoring fraud and misuse. The banks are incentivized to say "our network, our rules."
FedNow, as a government entity, will eventually respond to controversial political forces like "people expect to be made whole in the event of fraud" or "payment platforms should provide a means of leverage in customer disputes".
- Animats 3y ago"Their own competitor" is a commercial service called RTP.[1] This does bank to bank push transfers (unlike ACH, you cannot debit others) in near real time. Costs banks $0.045 per transfer. There's also a system which allows sending documents along with a Request for Payment (usually a bill), and that process adds an extra $0.11. [1] https://www.theclearinghouse.org/payment-systems/rtp https://www.theclearinghouse.org/payment-systems/rtp
- Izkata 3y agoZelle must have brought something to the table the others didn't: My bank provides an interface for Zelle on their website, letting you send payments without having to go through creating or linking an account. It never had any of the others.
- maxerickson 3y agoIt's owned by several quite large banks, it brings lots of market power to the table.
- wan23 3y agoVenmo and Cash App basically commoditize bank accounts. Banks don't like that. And since Zelle is run by the banks, they get to put their own branding all over it, make it available as the official supported way to send money from their mobile apps, and create a third network thereby reducing the network effects of the first two. Also, Zelle is more popular than Cash App and about on par with Venmo so it clearly wasn't too late to catch up.