In Mobile Payments P2P Services, Is Zelle or Venmo Out in Front?

February 13, 2019         By: Steven Anderson

We’ve all seen how mobile payments has grown over the years, and for peer-to-peer (P2P) mobile payments, the growth has been just as pronounced. When P2P first emerged, it was mostly just Venmo, which allowed it to rocket into a major position and even draw PayPal’s attention, if by proxy. Since then, other firms have entered the market, and one of the biggest up-and-comers in this market was Zelle, a creature born of a several-bank coalition. Recently, Forbes took a look at this market and began to puzzle out which was greater: Venmo or Zelle?

The Forbes results spell out a noteworthy conclusion: Zelle has the numbers. There’s no getting around it; in the fourth quarter of 2018 alone, Zelle processed about $1.50 for every $1 Venmo did, with Zelle processing $35 billion and Venmo processing $19 billion. The full year was even more pronounced in Zelle’s favor at $122 billion to Venmo’s $62 billion, nearly $2 to $1.

So Zelle took the crown, right? Nope. That’s where Forbes’ results really kicked in; consumers transferred about $142 billion through PayPal, which blows Zelle out of the water. PayPal itself, meanwhile, gets its comeuppance from direct bank transfers, which cleared $172 billion that year, not counting the $8 billion or so that went through PopMoney. Here’s the thing, though; since Zelle is a bank creation, Zelle will likely start eating some of the direct bank transfer market, and that puts it on the fast track to overtake PayPal. Though if you count PayPal and Venmo together—which you could—that changes the picture once again.

Several other issues contributed to the lack of clarity in a real winner in the P2P mobile payments stakes, but one thing was quite clear: there’s a lot going on in this market. We forget, sometimes, that this market hasn’t been around all that long, and we’re still seeing new competitors enter, fundraise, and even ultimately fail. This is still a dynamic market, and the fact that Zelle could be dethroned by Google at some point only bears that out.

Only time will tell who the ultimate winner here is, and it likely won’t be able to tell it for long. It just goes to prove that in mobile payments, you can take nothing for granted.