How Big Banks Are Fighting Back Against Venmo

How Big Banks Are Fighting Back Against Venmo
Financial Services

Several big corporations are now ready to launch Zelle, aimed to win back the hearts (and pockets) of bill splitters and debit card owners

Ido Lechner, Home Editor
  • 20 march 2017

From PayPal, Square Cash and Venmo, to Google Wallet, Dwolla and ChimpChange, peer-to-peer payment apps are overseeing currency that was once the exclusive domain of the banking sector. Most popular among millennials who’ve yet to secure a decent living of their own, these brands have helped democratize digital currency exchanges, and have even provided a channel for savvy teens and young adults to earn some money using the most potent weapon in their arsenal: smartphones. Of course, banks aren’t thrilled to see their money drift away, so nineteen banks including Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo have recently announced a joint-force collaboration branded Zelle aimed to win back the hearts (and pockets) of bill splitters and debit card owners, even if they don’t bank.

Come mid-2017, the platform will launch to take on the current players—a task which will prove difficult even for a universal bank p2p app given Venmo’s cumulative processing of $17.6 billion USD last year alone. Still, Zelle’s execs remain optimistic given their current technological breakthroughs to integrate 19 large banks (many of operate with their own legacy systems), four payment processors, and two card networks.

The platform will be launched in waves to enable the participating banks to sync with Zelle incrementally, without forgoing their current operations in a single hasty move. With a third of Americans now using person-to-person payment apps, and a projected near-half of the country adopting one of the platforms by 2021, the window of opportunity for implementing the app couldn’t be riper.

Built by Early Warning, a bank-owned company that also runs the clearXchange payments systems, the company’s president of payments recently told Bloomberg, “This is a great time for us to move [person-to-person payments] from millennials to mainstream. Any place we see checks and cash, that’s our target.”

While Zelle and Venmo share a striking resemblance, perhaps the critical difference outside of Zelle’s affiliation with banks is the app’s strict focus on paying or requesting payments. Whereas Venmo is a platform riddled with emojis, that further lets users make their transactions public, Zelle’s target audience sees no need for social interaction within this context, and the company will do without that element altogether.

Whether Zelle will prove successful remains to be seen, even among beta testers, but it is likely to help win the hearts of an older generation that could use the utilities of a peer-to-peer payment network devoid of the extraneous features that arguably make them popular among the younger cohort.


+Bank of America
+digital currency exchange
+google wallet
+JPMorgan Chase
+peer-to-peer payment system
+square cash
+wells fargo

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Joyce is the co-founder and executive director of, a nonprofit that supports the open Stellar financial network, designed to catalyze low-cost development of financial services such as savings, lending, and remittances. aims to expand financial services to unbanked people by connecting isolated financial systems, spreading financial literacy, and enabling product solutions at the local level. Joyce graduated from Cornell University, followed by graduate school at Harvard and Columbia Law School. She started her career as an attorney at WilmerHale and Shearman & Sterling. She also worked pro bono at Sanctuary for Families and the Innocence Project and later became a VC at Freestyle Capital. In addition to her current roles, she is also a director’s fellow at the MIT Media Lab and sits on the board of non-profit organization Literacy Bridge.


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