Big Banks Have Declared War On Venmo
Venmo has become one of the biggest mobile payment platforms among millennials – and it’s been a constant thorn in big banks’ sides. The mobile app has been used for years as one of the easiest ways to send money to friends, split bills, and even just give a gift of online cash without having to deal with too much red tape. In 2016 alone, Venmo had processed a jaw-dropping $17.6 billion in transactions. That number, according to experts, is expected to grow.
Big banks realized that Venmo is very likely to take over a huge portion of their money transfer businesses, and as a result, they have teamed together to create an app called Zelle. Like Venmo, Zelle is about making rapid payments, splitting bills, and just doing things involving money via an easy-to-use mobile app. The only difference is that big banks are now saying that Zelle will have another major advantage:
With Venmo, users are able to instantly send and receive cash. However, it can take several days to have the cash clear if you want to actually deposit it in a bank. With Zelle, the app exploits the connections it has to big banks. As a result, Zelle will be able to process things on a near-instant basis, and deposit goods directly into your bank account if that’s what needs to be done.
Zelle’s technology is built by the same group that made clearXchange. It’s going to be networking with 19 major banks, using 4 different payments processors, and even links up with two major card networks. Much like Chase QuickPay, the app will also have specialized tools that make it easy to snap up money.
PayPal, the owning company of Venmo, is very aware of the lag issue and has been working to fix it. Currently, they are in talks with Visa and MasterCard to use their debiting networks as a faster pathway to bank accounts. Even so, the process has been a slow one – often with mixed results. Fintech experts are hoping that, by mid-2017, people will be able to cash out Venmo and PayPal cash to a bank account instantly. However, that’s not been set in stone.
It’s hard to say who will win the mobile payment app war between Venmo and Zelle. Venmo is already a major player in the mobile payments world, and even is being used as a verb in many groups. Can this much-loved app hold its own against the newly evolved Zelle? Only time will tell.
In the meanwhile, it’s a good idea to learn about what your company can use for mobile payments platforms. If you want to start snapping up mobile money, you may need to call NMS. We’re always here to help keep you connected.